X 


THE   LAW 


of 


VOLUNTARY    SOCIETIES, 


MUTUAL   BENEFIT  INSURANCE 


AND 


ACCIDENT  INSURANCE. 


BY 

WILLIAM    C.    NLBLACK, 

OF   THE   CHICAGO    BAH. 


CBICAGO  : 
Callagiian  &  Company, 

L894. 


r 

M57I8 

IB?4 


V 


Entered  according  to  act  of  Congress,  in  the  year  1S88, 

By  Callaghan  <fc  Company, 

In  the  office  of  the  Librarian  of  Congress,  at  Washington,  D.  C. 


Entered  according -to  act  of  Congress,  in  the  year  1894, 

By  Callaghan  &  Company. 

In  the  office  of  the  Librarian  of  Congress,  at  Washington,  D.  C. 


Stereotyped   and    Printed 

by 

The  Chicago  Legal  News  Co. 


* 

^ 


h> 


PREFACE. 


The  growth  of  the  law  of  mutual  benefit  insurance  during 
the  six  years  which  have  elapsed  since  the  publication  of  the 
first  edition  of  this  work  has  been  very  great.  A  glance  at  a 
monthly  or  an  annual  digest  will  show  that  quite  as  many  cases 
relating  to  mutual  benefit  insurance  as  to  ordinary  life  insur- 
ance are  now  decided  by  the  courts.  The  law  of  voluntary 
societies  does  not  develop  so  rapidly,  but  the  civil  and  property 
rights  of  the  members  of  such  societies  are  of  great  impor- 
tance. 

The  first  edition  was  hurriedly  prepared,  and  much  of  it 
was  written  after  the  work  of  printing  had  begun.  While 
it  was  necessarily  imperfect  in  many  respects,  its  general  out- 
lines have  been  followed.  The  arrangement  of  the  parts  of 
the  work,  the  subjects  of  the  chapters,  and  the  headings  of  the 
sections  are  such  as  to  indicate  where  any  point  discussed  may 
be  found. 

In  treating  of  incorporated  voluntar}''  societies,  it  is  difficult 
to  determine  how  much  of  the  general  law  of  corporations 
should  be  included,  and,  in  considering  the  contract  of  mutual 
benefit  insurance,  the  temptation  is  great  to  discuss  many 
interesting  subjects  which  are  applicable  to  life  insurance  gen- 
erally. But  it  is  of  prime  importance  that  the  elements  of 
the  contract  of  mutual  benefit  insurance  should  be  considered 
separately,  and  that,  in  treating  of  it,  the  contract  of  ordinary 
life  insurance  should  be  mentioned  only  to  show  the  distinc- 
tions and  differences  between  the  two  systems  of  insurance. 
It  has,  therefore,  seemed  to  be  the  wisest  course  to  exclude 
any  general  treatment  of   the  law  of  corporations  or  of  insur- 

(iii) 


^Qete; 


IV  PREFACE. 

ance,  and  to  confine  this  work  strictly  to  the  scope  indicated 
b}^  its  title.  Such  subjects  as  are  fully  considered  in  standard 
text  books  on  corporations  or  life  insurance  are  omitted  from 
this  work,  or  are  merely  mentioned  incidentally. 

The  law  of  accident  insurance  has  been  added  to  the  work, 
and  it  is  earnestly  hoped  that  the  chapters  relating  to  this 
subject  may  not  be  found  to  be  without  value. 

The  writer  has,  for  the  most  part,  avoided  theories  and  dis- 
cussions, and  has  endeavored  to  present  a  complete  and  con- 
cise statement  of  the  present  state  of  the  law.  He  is  under 
obligations  to  E.  Allen  Frost,  Esq.,  of  the  Chicago  Bar,  for  his 
kind  assistance  in  the  publication  of  this  work. 

William  C.  Niblack. 

Chicago,  December  1,  1894. 


TABLE  OF  CONTENTS. 


PART  I. 

CHAPTER  I. 

MUTUAL  BENEFIT  SOCIETIES. 

Generally §  1,  2 

The  object  is  insurance 3 

Plans  of  organization 4 

Mutual  assessment  companies 5 

Rights  of  members  of  mutual  benefit  societies 6 

CHAPTER  II. 

CHARTER    AND  CONSTITUTION. 

Of  charters  in  general ( §  7 

The  object  of  a  society  must  be  authorized  by  its  organic  law 8 

The  plan  of  doing  business  must  be  authorized  by  the  organic  law  9 

Manner  of  doing  business  set  forth  in  certificate  of  incorporation. .  10 

The  object  of  a  society  must  be  legal 11 

When  corporate  existence  may  not  be  attacked 12 

Ultra  vires 13 

Constitution  of  a  society 14 

Incorporation  of  unincorporated  societies 15 

CHAPTER  III. 

BY-LAWS. 

Inherent  power  of  societies  to  pass  by-laws §  16 

Generally 17 

"When  by-laws  are  binding  on  members 18 

By-laws  must  be  legal 19 

By-laws  must  be  consistent  with  the  charter • 20 

By-laws  of  unincorporated  society  must  be  consistent  with  its  consti- 
tution   21 

By-laws  of  unincorporated  society  must  not  be  illegal 22 

By-laws  of  an  incorporated  society  must  be  reasonable  and  neces- 
sary    23 

Alteration,  amendment  and  suspension 24,  25,  26,  27 

Repeal  of  by-laws 28 

CHAPTER  IV. 

MEMBERSHIP. — PART  I. 

Admission  into  incorporated  societies §  29 

Admission  into  unincorporated  societies 30 

Election  to  membership 31 


yi  TABLE     OF    CONTENTS. 

Who  are  members  of  a  mutual  benefit  society §  32 

Membership  in  religious  corporations 33 

Expulsion,  amotion,  suspension 34 

Power  of  amotion   in  incorporated  societies 35 

Power  of  incorporated  societies  to  expel  members 36 

Modern  doctrine  of  expulsion 37 

Power  of  expulsion  conferred  by  the  charter 38 

Breaches  of  corporate  duty ■ 39 

Expulsion  from  religious  corporations 40 

Surrender  of  right  to  expel  members 41 

Double  sentence  of  society _  42 

Statute  of  limitations 43 

Eight  to  trial  by  jury 44 

Eegularity  of  proceedings 45 

Record  of  proceedings 46 

MEMBERSHIP.—  PART  II. 

Reinstatement  of  member;  remedies  hi  society  must  be  exhausted.  §  47 

Jurisdiction  of  appellate  tribunal  when  appeal  is  irregular 48 

Subordinate  society  refusing  to  obey  order  <  >f  superior  body 48a 

"When  decision  of  appellate  tribunal  is  final 49 

Death  pending  appeal  to  courts  of  the  society 50 

Injunction  to  restrain  illegal  expulsion 51 

Action  for  benefits  where  expulsion  of  the  member  is  inquired  into  52 

Action  for  damages  for  unlawful  expulsion 53 

Injunction  to  reinstate  expelled  member 54 

Reinstatement  by  courts  of  justice 55 

Mandamus  the  proper  remedy 56 

Mandamus  a  discretionary  writ r>^ 

Delay  in  applying  for  restoration 58 

MEMBERSHIP. — PART   III. 

Return  to  writ  of  mandamus §59 

Charges  preferred  against  a  member 60 

Notice  of  charges,  notice  of  meeting 61 

When  notice  need  not  be  given 62 

Sufficiency  of  notice 63 

Service  and  proof  of  notice 64 

Waiver  of  notice 65 

Answering  charges  immediately  when  presented 66 

Tribunal  of  society  expelling  a  member 67 

Good  faith  hi  proceedings  in  expulsion 68 

Decree  of  court  reinstating  member  must  be  presented  to   the  so- 
ciety    69 

MEMBERSHIP. — PART   IV. 

Inherent  power  of  unincorporated  society  to  expel  members §  70 

Right  of  such  society  to  pass  by-laws  providing  for  expelling   its 

members 71 

Power  of  expulsion  from  usage 72 

Expulsion  agreed  upon  in  articles  of  association 73 

Charges  against  a  member  of  such  a  society 74 


TABLK     OF    CONTEXTS.  Vll 

Reinstatement  in  unincorporated  society §  75 

Proper  remedy  of  expelled  member 76 

CHAPTER  V. 

LIABILITY  OF  MEMBERS. 

For  debts  of  incorporated  society §77 

Where  attempted  incorporation  is  valid 78 

For  debts  of  an  unincorporated  society 79,  80 

Liability  of  person  incurring  the  debt 81 

Where  debt  is  incurred,  payable  out  of  special  fund 82 

Notice  of  creditors  of  withdrawal  from  society 83 

Actions  for  libel  and  slander 84 

Actions  between  members 85 

Liability  of  members  in  Pennsylvania 86 

Liability  of  members  hi  New  York 87 

CHAPTER  VI. 

SUITS  BY   OR  AGAINST  AN    UNINCORPORATED   SOCIETY. 

Proper  parties  to  an  action §  88 

Actions  by  society  or  a  member  to  recover  property 89 

Right  of  society  'to  exclusive  use  of  its  name 90 

Injunction  restraining  libel  on  society 91 

Judgment  against  an  unincorporated  society 92 

CHAPTER  Vn. 

OFFICERS. 

Election  of  officers §  93,  94 

Powers  and  duties 95,  96,  97,  98 

Salaries,  fees,  commissions 99 

Liabilities  of  officers 100 

Official  bonds,  rights  and  liabilities  of  sureties 101 

Liability  of  new  sureties 102 

Liability  on  a  bond  to  a  state 103 

CHAPTER  VIII. 

MEETINGS. 

Notice  of  meetings §  104 

Rules  governing  future  meetings 105 

Duty  of  members  present  to  vote 106 

Presumption  that  a  quorum  was  present 107 

When  corporate  acts  are  binding 108 

Meetings  on  Sunday 109 

CHAPTER  IX. 

JURISDICTION  OF  COURTS  OVER  SOCIETIES.— PART  I. 

Visitorial  power  of  courts §  110 

Courts  of  society  must  first  be  resorted  to Ill 

Courts  may  not  be  ousted  of  jurisdiction 112 

When  courts  will  not  take  jurisdiction 113,  114 


Vlll  TABLE    OF    CONTENTS. 

Injunction  to  restrain  illegal  act §  115 

Injunction  to  restrain  society  from  doing  business  on  erroneous 

plan 116 

Status  of  incorporated  societies 117 

Dissolution  of  an  unincorporated  society 118 

Dissolution  of  an  incorporated  society 119 

When  a  society  is  dissolved  by  its  own  act  or  neglect 120 

JURISDICTION  OF  COURTS  OVER    SOCIETIES.— PART  II. 

Dissolution,  trust  funds,  distribution  of  property §  121-125 

Trust  funds  of  a  society 126 

Eights  of  contributors  to  funds 127 

Rights  of  members  in  property  and  funds 128 

Revocation  of  social  and  fraternal  character 129 

Mutual  benefit  society  is  not  a  public  charity;  taxation 130 

JURISDICTION  OF  COURTS  OVER  SOCIETIES. — PART  III. 

Religious  societies §  131 

Ecclesiastical  jurisdiction — Civil  rights -. 132 

Secession  in  religious  society — Division  of  property 133 

.Property  and  trusts  of  religious  societies 134 

Trustees  and  officers  of  religious  societies 135 

PART  II. 

CHAPTER  X. 

CERTIFICATE  OF  MEMBERSHIP. 

Generally §  136,  137 

When  the  contract  is  complete;  delivery  of  certificate 138,  139,  140 

Where  executed 141 

Delay  of  society  in  accepting  application 142 

Construction  of  the  contract 143,  144 

Construction  given  to  the  contract  by  the  society 145 

Construction  of  application  and  certificate 146 

Where  terms  of  a  certificate  are  inconsistent  with  a  by-law 147 

By  whom  certificate  must  be  signed 148 

Delivery  of  certificate  to  beneficiary  not  necessary 149 

Contract  must  be  accepted  in  its  entirety 150 

Certificates  are  valued  policies  of  insurance 151 

Reformation  of  certificate 152 

Reformation;  inserting  name  of  beneficiary 153 

Novation  of  the  contract 154 

In  good  standing 155 

Suicide 156 

Known  violation  of  law 157 

■   CHAPTER  XI. 

WHO  MAY  BE  A  BENEFICIARY — INSURABLE     INTEREST. — PART  I. 

Classes  of  beneficiaries  specified  in  the  charter §  158, 159 


TABLE    OF   CONTEXTS.  IX 

i 

The  terms  of  the  charter  are  io  be  liberally  construed §  160 

Any  person  belonging  to  a  specified  class  may  be  the  beneficiary..-  161 

Effect  of  amendment  of  the  organic  law  of  a  society 162 

When  an  unincorporated  lodge  may  be  the  beneficiary 163 

When  a  divorced  wife  may  be  the  beneficiary 164 

WHO  MAY  BE  BENEFICIARY— ASSIGNEE  OF  CONTRACT. — PART  II. 

When  the  contract  of  mutual  benefit   insurance  is  assignable. ...  §  165,  166 

Equitable  assignment 167 

Limitation  on  the  right  to  assign 168 

The  consent  and  approval  of  the  society  may  be  required 169 

Eights  of  the  assignee  of  a  certificate 170 

Assignment  after  death  of  the  member 171 

Assignment  by  the  beneficiary ,. 172 

Designation  of  new  beneficiary  is  not  an  assignment  of  the  certifi- 
cate   173 

Law  governing  the  validity  of  an  assignment 174 

CHAPTER  XII. 

CONSTRUCTION  OF  THE   DESIGNATION  OF  THE  BENEFICIARY. 

Rules  of  construction §  175 

Provisions  of  the  charter  designating  beneficiaries 176 

Beneficiaries  designated  by  the  by-laws  or  certificate 177 

Devisees;  as  designated  in  last  will 178 

Wife,  widow 179-183 

Fund  payable  to  wife  for  the  benefit  of  herself  and  children 184 

Wife  and  children 185 

Child 186 

Children  born  after  issue  of  certificate 187 

Child,  grandchild 188 

Heirs,  heirs  at  law,  legal  hens 189-192 

Orphans 193 

Family 194 

Dependents 195 

Relations,  relatives 196 

Legal  representatives 197 

The  assured 198 

"Guardian"  of  member 199 

CHAPTER  XIII. 

CONCERNING  BENEFICIARIES  IN  MUTUAL    BENEFIT  INSURANCE. 

Estate  of  the  member  as  a  beneficiary §  200 

When  the  member  becomes  a  beneficiary  by  inheritance 201 

Death  of  beneficiary  during  life  of  member 202 

Death  of  one  of  two  named  beneficiaries;  survivorship 203 

Interest  of  beneficiary  vests  on  death  of  member 204.  SOS 

Death  in  common  disaster;  survivorship;  presumption 206 

Death  of  member  and  beneficiary  at  same  instant 207 

Agreement  between  member  and  beneficiary  as  to  disposition  of 

fund » 208 


X  TABLE    OF    CONTENTS. 

When  beneficiaries  take  equally §  209 

In  what  proportions  heirs  take  the  fund 210 

CHAPTER  XIV. 
CHANGE  OF  BENEFICIARY. 

Rights  of  beneficiary  in  ordinary  contract  of  insurance' §  211 

Beneficiary  has  no  vested  rights  in  contract  of  mutual  benefit  in- 
surance    212,  213 

Where  no  manner  of  changing  beneficiaries  has  been  agreed  upon.  214 

Provisions  of  the  charter  concerning  changes  of  beneficiaries 2ir> 

A  change  may  not  be  made  when  the  charter  forbids  it 216 

Where  terms  of  by-laws  or  certificate  pi'ohibit  a  change 217 

When  mode  of  changing  is  prescribed,  it  must  be  substantially  fol- 
lowed   218,  219 

Authorities  holding  prescribed  modes  of  changing  beneficiaries  to 

be  mandatory  and  exclusive 220 

Authorities  holding  such  provisions  to  be  directory  merely 221 

Change  of  beneficiary;  general  observations 222 

When  the  change  is  perfected 223 

CHAPTER  XV. 

CHANGE  OF  BENEFICIARY. 

Consent  of  society  to  the  change §  224 

When  society  is  estopped  to  question  the  change 22') 

A  beneficiary  may  be  estopped  to  assert  that  a  change  was  not 

properly  made 226 

Delivery  or  gift  of  certificate  to  the  beneficiary;  effect  on  the  right 

to  change  beneficiaries 227 

Effect  of  an  agreement  between  two  members  that  each  shall  pro- 
cure a  certificate  for  the  benefit  of  the  survivor 228 

A  delivery  of  the  certificate  to  the  beneficiary  is  not  necessary 229 

Who  may  be  designated  as  a  new  beneficiary 230 

Does  an  inoperative  change  of  beneficiaries  revoke  the  original 

designation  ? v .  231 

Incomplete  designation;  failure  to  exercise  the  power  of  appoint- 
ment   232 

Change  of  beneficiary  by  suspended  member  in  application  for 

reinstatement 233 

Right  of  a  member  to  change  his  beneficiary  when  the  certificate 

is  payable  to  his  legal  representatives 234 

Fraudulent  change  of  beneficiary 234a 

CHAPTER  XVI. 

DESIGNATION  AND   CHANGE  OF   BENEFICIARY. 

Designation  by  last  will;  where  the  right  to  devise  the  fund  is  con- 
veyed by  charter §  235 

Designation  of  a  new  beneficiary  or  disposition  of  the  fund  by  last 

will 236 

When  a  designation  or  disposition  by  will  is  invalid 237 


TABLE    OF    CONTENTS.  XI 

When  a  disposition  by  will    is  invalid;  power  of    appointment 

reserved  to  the  member §  238,  239 

Where  the  designation  of  a  beneficiary  is  tbe  execution  of  a  power 
of  appointment,  it  must  be  made  according  to  the  laws  of  the 

society 240 

Designation  by  special  appointment 241 

A  designation  is  not  necessarily  revoked  by  the  subsequent  mar- 
riage of  the  member 242 

When  the  power  to  designate  or  change  the  beneficiary  is  ex- 
hausted    243 

Time   within   which  the    power  of  appointment   or  the  right   to 

designate  a  new  beneficiary  may  be  exercised 244 

CHAPTER  XVII. 

MEMBERSHIP  FEE. 

Note  given  for  membership  fee §  245 

Gash  payment  of  fee 246 

Recovery  of  membership  fee  from  society 247 

CHAPTER  XVIII. 

ASSESSMENTS. 

Generally §  24*.  249 

Assessments  must  be  properly  levied  and  for  proper  purposes 251).  251 

The  act  of  levying  an  assessment  is  ministerial 252 

Custom  in  levying  assessments 253 

Assessment  for  reserve  fund 254 

Assessment  in  anticipation  of  losses 255 

Effect  of  the  levy  of  an  assessment 256 

Notice  of  assessment 257-259 

Notice  by  mail 260,  261 

Date  of  notice  given  by  mail 262 

Date  of  assessment,  date  of  notice 263 

Notice  by  publication 264 

Notice  of  date  of  payment 265 

Service  of  notice 266 

Agreement  of  society  to  give  notice  to  the  beneficiary 267 

Insufficient  notice  of  assessment 268.  209 

CHAPTER  XIX. 

ASSESSMENTS. 

Payment  of  assessment §  270 

Payment  out  of  funds  in  the  hands  of  the  society 271 

By  whom  payment  of  an  assessment  may  be  made 272 

When  payment  must  be  made  during  the  lifetime  of  the  member. .  273 

Death  within  thirty  days  after  notice 274 

Payment  of  an  assessment  after  the  death  of  the  member;  days  of 

grace 275 

Payment  to  subordinate  lodge:  agency  of  lodges 276 

Authority  of  agents  to  collect  assessments 277 

A  receipt  for  an  assessment  may  be  contradicted 278 


XII  TABLE    OF   CONTENTS. 

Tender  of  an  assessment §  279 

Refusal  to  accept  assessments;  remedy  of  member 280 

Effect  of  the  return  of  assessments  once  paid 281 

Recovery  of  assessments  paid  by  a  member 282 

Promise  of  the  society  to  receive  a  past  due  assessment  283 

Reimbursement  of  one  who  has  paid  assessments  for  another 284 

CHAPTER  XX. 

ASSESSMENTS. 

Forfeiture  for  non-payment  of  an  assessment §  285, 286 

When  an  affirmative  act  of  the  society  declaring  the  forfeiture  is 

necessary 287, 288 

When  an  affirmative  act  of  the  society  declaring  the  forfeiture  is 

not  necessary 289,  290 

Restoration  after  suspension  or  forfeiture  for  non-payment 291-294 

Excuse  for  non-payment,  insanity,  act  of  God 295 

Excuse  for  non-payment,  Sunday,  holiday 296 

CHAPTER  XXI. 

ASSESSMENTS. 

Waiver  of  forfeiture,  agreement  of  officers,  printed  prospectus §  297 

Waiver  of  forfeiture,  custom  of  society 298,  299 

Waiver  of  forfeiture,  receipt  of  assessments,  estoppel  in  pais 300,  301 

Waiver  of  forfeiture,  assessments  retained  by  the  society 302 

Waiver  of  forfeiture,  conditional  acceptance  of  past  due  assess- 
ments    303,  304 

Waiver  of  forfeiture,  the  levy  of  an  assessment  on  a  delinquent 

member 305,  306 

Waiver  of  forfeiture,  attempt  to  collect  assessments 307 

CHAPTER  XXII. 

ASSESSMENTS. 

Property  of  society  in  assessments  levied,  or  to  be  levied — Are  un- 
paid assessments  assets  of  the  society  ? — Can  payment  of  them 
be  enforced? §  308 

Interest  of  the  society  in  the  fund  collected  by  assessments 309 

CHAPTER  XXIII. 

ACTION  ON  THE  CONTRACT  OF    THE  SOCIETY. 

An  action  may  be  maintained  on  the  contract  of  a  society  to  pay 

benefits §  310 

The  right  of  a  society  to  provide  methods  for  the  settlement  of 

claims  against  it 311,  312 

When  the  courts  of  a  society  must  be  resorted  to 313,  314 

A  strict  construction  must  be  given  to  provisions  abridging  a  com- 
mon right 315 

Authorities  holding  that  the  society  may  make  the  decision  of  its 

tribunal  final 316 


TABLE     OF    CONTENTS.  Xlll 

Authorities  holding  that  a  society  may  not  make  the  decision  of 

its  tribunal  final ' §  317 

Arbitration  clauses 317a 

Actions  on  by-laws  for  benefits 318 

Effect  of  expulsion  on  the  claim  of  the  expelled  member  for  bene- 
fits   319 

CHAPTER  XXIV. 

ACTION  ON  THE  CONTRACT  OP    THE  SOCIETY. 

Limitation  as  to  the  time  when  an  action  may  be  brought §  320 

Limitation  as  to  the  place  where  an  action  may  be  brought 321 

Pleading  and  evidence 322,  323 

Competency  of  witnesses 324 

Admissibility  of  the  declarations  of  a  member 325 

Proofs  of  death 326 

Attachment  of  benefit  fund,  garnishment 327 

When  fund  may  or  may  not  be  attached 328 

CHAPTER  XXV. 

ACTION    ON    THE    CONTRACT  OF   THE   SOCIETY. 

Plans  and  schemes  of  mutual  benefit  insurance §  329 

Mandamus  as  a  remedy 330 

Remedy  in  equity 331 

Contract  to  resort  to  equity 332 

An  action  at  law  is  a  proper  remedy 333 

Pleading,  breach  of  promise  to  pay 334 

Pleading,  evidence,  breach  of  promise  to  pay 335 

Averment  of  a  demand  for  an  assessment 336 

Plea  or  answer  setting  up  that  no  fund  has  been  raised  by  assess- 
ment   337 

Evidence,  effect  of  the  collection  of  an  assessment  by  the  society  338 
Evidence  of  the  amount  which  might  have  been  realized  by  an  as- 
sessment   339 

Burden  of  proof 340 

Nominal  damages  in  an  action  at  law 341 

Substantial  damages  in  an  action  at  law 342 

Burden  of  proof  and  measure  of  damages  discussed 343 

Measure  of  damages  in  certain  cases 344 

Measure  of  damages  for  change  of  the  plan  of  insurance 345 

CHAPTER  XXVI. 

PAYMENT  OF  THE  BENEFIT  FUND. 

Payment  is  not  a  gift §  346 

Payment  of  the  benefit  fund,  rights  of  parties 347,  348 

To  whom  the  money  is  payable  when  the  contract  is  for  the  benefit 

of  a  creditor  of  the  member 349  -351 

Payment  from  reserve  fund 352 


XIV  TABLE    OF    CONTENTS. 

Contract  to  surrender  the  certificate  when  the  fund  is  paid  by  the 

society §  353 

Payment  of  the  fund  into  court,  interpleader  by  the  society 354 

Payment  of  a  less  amount  than  is  due,  receipt  in  full 355 

Settlement  procured  by  the  fraud  of  the  society 35G 

A  member  may  not  enjoin  payment 357 

Payment  procured   by  fraud 358 

Right  to  double  payment 359 

Interest  on  the  amount  of  the  benefit  fund 360 

Proceedings  to  obtain  payment  of  judgment 361 

Restricting  the  operation  of  the  judgment  against  a  society 362 

PAET  III. 

CHAPTER  XXVII. 

ACCIDENT   INSURANCE. 

Generally §  363 

What  is  an  accident  ? 364 

Negligence  on  the  part  of  the  insured  contributing  to  the  injury. . .  365 

Due  diligence  for  personal  safety  and  protection 368 

Voluntary  exposure  to  unnecessary  danger;  obvious  risk 367-372 

External,  violent  and  accidental   means 373-378 

External  and  visible  sign 379 

The  nature,  cause  or  manner  of  death  unknown,  or  incapable  of 

direct  and  positive  proof;  burden  of  proof 380, 381 

CHAPTER  XXVIII. 

ACCIDENT   INSURANCE. 

Accidents  while  traveling  by  public  or  private  conveyance §  382,  385 

While  traveling  in  compliance  with  all  rules  and  regulations  of 

common  carriers;  violation  of  rules  of  employment 386 

Walking  on  railway  track 387 

Intentional  injuries  inflicted  by  the  insured  or  any  other  person. . .  388 

Intoxication;  under  the  influence  of  liquor 389,  390 

Fits,  vertigo,  fainting 391 

Drowning 392 

CHAPTER  XXIX. 

ACCIDENT  INSURANCE. 

Poison : §  393 

Inhaling  gas 394 

Death  or  disability  caused  by  any  surgical  operation  or  medical  or 

mechanical  treatment  for  disease 395 

Hernia,  erysipelas 396 

Proximate  cause  of  the  death  of  the  insured 397,  398 

Bodily  infirmity 399 

Loss  of  foot,  eye  or  hand 400 


TABLE   OF   CONTENTS.  XV 

Permanent  or  total  disability §  401-405 

A  company  may  be  liable  for  sick  benefits,  thougb  not  liable  for  the 

death  of  the  insured 406 

CHAPTER  XXX. 

ACCIDENT   INSURANCE. 

Occupation  of  the  insured §  407.  408 

Change  of  occupation 409.  4H» 

Change  of  occupation;  classified  risks 411   414 

N<  itice  of  injury  or  death 415-41* 

Waiver  of  notice 419 

Payment  of  claim  from  a  special  fund  or  in  a  special  manner 420 


TABLE    OF    CASES. 


[the  references  are  to  sections.] 


Abbott  v.  Cobb,  85. 

Abe  Lincoln  Society    v.  Miller,  285, 

333. 
Abels  v.  McKeen,  106,  127. 
Accident  Ins.    Co.    v.   Bennett,  156, 

157,  377,  380,  388. 
Adams  v.  Otterback,  298. 
Addison  v.  Association,  146,  191. 
Adkins  v.  Ins.  Co.,  156. 
Adm'rs  of    Stone    v.  Casualty  Co., 

144,  366,  409,  413. 
Adriance  v.  Roome,  18. 
^Etna  Life  v.  Brodie,  152. 

Ins.  Co.  v .  Brown,  35G. 

v.  France,  300,  322. 
Life  v.  Hanna,  3(10. 
Ins.  Co.  v.  Maguire,  300. 
Agnew  v.  A.  O.  U.  W.,  250,  257. 
Ahlborn  v.  Wolff,  152. 
Aid  Society  v.  Lewis,  212. 
Aiken  v.  Association,  165,  169,  171, 

205. 
Alabama  Ins.  Co.  v.   Garmany,  298. 
v.  Herron,  139. 
v.  Ins.  Co.,  300. 
v.  Mayes,  140,  142. 
Albert  v.  Order  Chosen  Friends,  315, 

318,  402. 
Aldrich  v.  Accident  Association,  411. 
Alexander  v.  Association,  189,  190. 
v.  Bailey,  364. 
v.  Parker,  158,  195. 
Allcmania  Ins.  Co.  v.  Little,  320. 
Allen  v.  Hovt,  209,  210. 
Allis  v.  Ware.  211. 
Allnut  v.  High  Court,  19,  39,  67. 
Alsatian  Ben.  Society.  29. 
Altaian  v.  Benz,  128. 
American  Ace.  Co.  v.  Norment,  401, 

406,  415.  416,  419. 
American  Accident  Co.  v.   Reigart, 

373. 
American  Ins.  Co.  v.  Crawford,  358. 

v.  Day.  326. 
American   Life  v.  Robertshaw,  348, 

350. 
American  Mutual  v.  Helburn,  252, 
v.  Quire,  257,  290. 

(XV 


American  Order  v.  Merrill,  15. 
Amesbury  v.  Bowditch  Mutual,  17. 
Amick  v.  Butler,  348,  349,  350,  351. 
Anacosta  Tribe  v.  Murbach,  49,  316 

319. 
Ancient  Order  v.  Moore,  259,  271. 
Anders  v.  Supreme  Lodge,  183. 
Anderson's  Appeal,  201. 
Anderson  i\  Fitzgerald,  183, 
v.  Ins.  Co.,  397. 
v.  Supreme  Council,   276, 
313,326. 
Andes  Ins.  Co.  v.  Fish,  320. 
Andrews  and  Alexander's  Case,  80. 

v.  Portland,  99. 
Anthony  v.  Association,  196. 
Appeal  of  Beatty,  227. 
Appeal  of  Brown,  186. 
Appleton  Bank  v.  McGiloray,  346. 
Armstrong  v.  Ins.  Co.,  142. 

v.  Mutual  Life,  322. 
Arnet  v.  Milwaukee  Mutual,  321. 
Artharsv.  Baird,  176,  231. 
Arthur  v.  Association,  177,  218,  237, 
238. 
v.  Ins.  Co.,  320. 
Ash  v.  Guie,  79,  92,  117. 
Ashley  v.  Ashley,  165. 
Aspinwall  V.  Sacchi,  78. 
Assurance  Society  v.  Clements,  141. 

Co.  v.  Connor,  136. 
Atkinson  v.  Ins.  Co.,  142. 
Atlantic  Mutual  v.  Moody,  250. 

V.  Saunders,  17,  250, 
269. 
Attorney  General  v.  Bank,  119. 
v.  Moore,  134. 
Aurora  Ins.  Co.  v.  Johnson,  365. 
Austin  v.  Holland,  261. 

v.  Searing,    23,  49,  112,  129, 
317. 
Avery  v.  Baker,  134. 
Avcson  v.  Lord  Kinnard,  325. 
Ayer  v.  New  Eng.  Mutual,  408. 


1'. 


Bachman  r.   Arbeiter  Bund,  52,  58 

319. 
Bachman  v.  Supreme  Lodge,  7. 


XV111 


TABLE    OF    CASES. 


[the  references  are  to  sections.] 


Bachmeyer  v.  Association,  322,  326. 
Backdahl  v.  Grand  Lodge,  262,  260, 

287,  289. 
Bacon  v.  Accident  Ass'n,  393. 

v.  Brotherhood,  163. 
Badenfeld  v.  Association,  380,  361. 
Badger  v.  Ins.  Co.,  140,  148. 
Bagg's  Case.  29,  37. 
Bagley  v.  Grand  Lodge,  252. 
Bailey  v.  Association,  302,  331,  334. 
v.  Cummings.  194. 
v.  Lewis,  100,  115,  126,  134. 
v.  New  England  Ins.  Co.,  347. 
Bain  v.  Case,  360, 

Baker  V.  Benefit  Association,  272,  307. 
v.  Benefit  Society,  275.  308. 
v.  Citizens  Mutual,  268,  288. 
V.  Ducker.  134. 
v.  Fales,  133. 

v.  Ins.  Co.,  139,  270,  278,  416. 
v.  Johnson  Co..  176. 
v.  N.  Y.  St.  Mutual.  274,  286. 
Baldwin  V.  Fraternity,  136. 
Baley  v.  Ins.  Co.,  393. 
Ball  v.  Association,  300.  340. 
Ballou    v.   Gile,    143,    176,   195,   212, 

222.  354. 
B.  &  O.  Ass'n  v.  Post,  277,  318,  323, 

402. 
B.  &  O.  R.  R.  Co.  v.  Association.  122. 

V.  Reamy.  397. 
Bancroft  v.  H.  B.  Association.  399. 

v.  Russell.  200. 
Bane  r.  Ins.  Co..  270. 
Bangor  v.  Masonic  Lodge,  130. 
Bangs  v.  Mcintosh,  258. 
Bank  v.  Bank,  123. 
V.  Hoeber,  356. 
v.  Ins.  Co.,  156,  232. 
v.  Mathews,  15. 
Banks  v.  Phelan,  134. 
Banker's    Association   v.    Stapp,   32, 

246.  272,  274.  275.  305. 
Barbaro  v.  Occidental  Grove,  3,  92, 

276. 
Barber  v.  Ins.  Co.,  320. 
Barron  v.  Burnside,  49,  317. 
Barrows  r.  Society,  39. 
Barry  v.  Accident  Association,    364. 

379,  397. 
Barry  v.  Nuckolls,  80. 
Barteau  v.  Ins.  Co. ,  300. 
Bartholomew  v.  Ins.  Co,  152. 
Bartlett  v.  Union  Mutual,  321. 
Barton  v.  Provident  Mutual,  159,  219, 

243. 
Baskin*s  Appeal,  210. 
Bassell  v.  Ins.  ^o.,  144. 
Bassett  v.  Parsons,  327. 
Basye    r.  Adams.  158,   159,    161,    165, 

200,  215. 
Bates  v.  Association,257,  285,  330,  333. 


Bates  v.  Detroit  Mutual,  268. 

v.  Forcht,  324. 
Bauer  v.  Samson  Lodge,  18,  130,  136, 

150,  313,  317,  323. 
Baxter  v .  Board  of  Trade,  54. 

V.  Ins.  Co.,  97,  270. 
Bay  less  v.  Ins.  Co.,  374,  393,  395. 
Bean  v.  Assurance  Co.,  366,  367,  368. 

v.  Ins.  Co.,  401,414. 
Bear  v.  Bromley,  117. 
Beasley  v.  Allyn,  128. 
Beatty    v.    Supreme    Commandery, 

243. 
Beaumont  v.  Meredith.  88,  117. 
Becker  v.  Farmers*  Mutual,  19,  136. 

V.  Societv.  24. 
Belleville  Mutual  v.  Van  Winkle,  96. 
Belton  v.  Hatch,  19. 
Benedict  v.  Grand  Lodge,  257,  259, 

260.  261. 
Beneficial  Ass'n  of  Unity,  38. 

Society  v.  White.  318,  322. 
Benefit  Association  v.  Conway.  246. 
v.  Grauman,  398. 
Society  v.  Flietsam,  329,  339. 
Benevolent  Societv  v.  Baldwin,  39. 
Benj.  Franklin  Ins.  Co.  v.  Gillett,  152. 
Bennett  v.  Ins.  Co.,  416. 

r.  Van  Riper,  160,  196. 
Bentley  v.  Ins.  Co.,  142. 
Benton  y.  Brotherhood,  27,  212. 
Bentz  v.  N.  W.  Association,  326,  333, 

340.  344. 
Bergman  v.  St.  Paul  Mutual,  7. 
Bergson  v.  Ins.  Co.,  278, 
Berlin  Beneficial  Society  v.  March, 

177. 
Bernays  v.  Association,  379,  393,  396. 
Berry  v.  Indemnity  Co.,  3. 
Bersch  v.  Ins.  Co.,  251. 
Berwick  r.  Johnson,  19. 
Bessinger  i\  Dickerson,  102. 
Bevin  v.  Ins.  Co.,  195. 
Bewley  v.  Equitable  Society,  331. 
Bickerton  v.  Jaccpies.  202,  211. 
Bigelow  v.  Assqciation,  270. 
Bi^elow  v.  Libby,  308. 
Bigelow  v.  Ins.  Co.,  156,  378. 
Billings  v.  Ins.  Co.,  156. 
Bird  v.  St.  Marks  Church,  132. 
Birmingham  v.  Gallagher,  100. 
Birnbaum  v.  Passenger  Conductor's, 

337 
Bish  v.  Ins.  Co..  320. 
Bisbee  v.  Ham.  356. 
Bishop.  Admx  v.  Grand  Lodge,  176, 

189,  190.  197. 

v.  Young,  327. 
Black  &  White  Societv  V.  Vandyke, 

55,  310,  316.  319. 
Rabbit  Associations.  Munday, 

15,  90. 


TABLE    OF    CASES. 


XIX 


[the  references  are  to  sections.] 


Blackstone  v.  Ins.  Co.,  378,  388,  397. 
Blackwell  v.  Broughton,  19l4. 
Blaeser  v.  Ins.  Co.,  157. 
Bloggs  v.  Miles,  238. 
Blakely  v.  Bennecke,  81. 
Block  v.  Valley  Mutual,  213. 
Bloom  v.  Franklin  Life,  157. 
Bloomington  Mutual  v.  Blue,  13,  159, 

160,  166,  178. 
Blumenfeldt  v.  Korschuck,  53. 
Blumenthal    v.    Chamber    of    Com- 
merce. 39,  53,  55,  64. 
Boasburg  v.  Cronan,  208. 
Bock  v.  United  Workmen,   256,    301, 

338,  353,  359. 
Boehen  v.  Ins.  Co. ,  270. 
Boiler  Co.  v .  Garden,  381. 
Bolt  v.  Keyhoe,  328. 
Bolton  v.  Bolton,  3,  179,  204,  348. 
Bomberger  v.  Society,  348. 
Bon   v.  Assurance  Co.,  366,  367,  383, 

386. 
Borden  v.  Borden,  353. 
Borgards  v.  Ins.  Co.,  137. 
Borgraefe  v.  Supreme  Lodge,  32,  276, 

290,  301,  307. 
Borradaile  v.  Hunter,  156. 
Bostwick  v.  Fire  Dept.,  58. 
Bosworth  v.    Western   Mutual,   289, 

298. 
Bouten    v.  American    Mutual,    301, 

307. 
Bonton  v.  Ins.  Co.,  270,  298,  299,  304. 
Bowden  v.  McLeod,  133,  135. 
Bowen  v.  Matheson,  19. 
Bowie  v.  Grand  Lodge,  25,  27. 
Bowman  v.  Moore,  219. 
Bown  v.  Catholic  Mutual,  237,  241. 
Boy  den  v.  Ins.  Co.,  200. 
Boyles  v.  McCoy,  77. 
Boynton  v.  Ins.  Co.,  317,  321. 
Bradfield  v.  Union  Mutual,  6,  136. 
Bradley  v.  Mutual,  157. 
Brad  well  v.  Ins.  Co.,  299. 
Brady  v .  Coachmans1  Association,  23 

271. 
Braunstein  v.  Ins.  Co.,  295,  326. 
Bray  v.  Farwell,  14. 
Breasted  v.  Ins.  Co.,  143,  156. 
Breckel  r.  Imperial  Council,  328. 
Breneman  v.  Association,  23,  313. 
Brew  v.  Clement,  202. 
Brewer  V.  Dver,  15. 

v.  Ins.  Co.,  97. 
Bridge  v.  Ins.  Co.,  360. 
Briggs  v.  Earle,  20,  158,  165,  171. 

v.  Hervey,  261. 
Brigham  v.  Ins.  Co. ,  327. 
Brink  v.  Accident  Association,  399, 

408,  419. 
British  Equitable  v.  Ins.  Co.,  138. 
Britt  v.  Ins.  Co.,  322. 


Britton  v.  Supreme  Council,  158,  162, 
177,  183,  189,   194,  231,  331, 
353, 360. 
Brockhaus  v.  Kemna,  211. 
Brockway  v.  Ins.  Co.,  198. 
Bromley  v.  Williams,  88. 
Brooke  v.  Shacklett,  133. 
Brooklyn  Association  v.  Hanson,  194, 

204. 
Brooklyn   Life  v.  Bledsoe,  186,  204, 

321. 
Brown  v.  Association,  178. 

v.  Assurance  Co.,  360,  384. 

v.  Balfour,  328. 

v.  Dale,  117,  128. 

v.  Freeman,  350. 

v.  Grand    Lodge,     212,    227, 

234a. 
v.  GrifFen,  100. 
v.  Ins.  Co.,  270,  356,  365. 
v.  Mansur,  167,   169,  197,  214, 

219,231. 
v.  N.  W.  Legion,  301. 
v.  Stoerkel,  89,  117. 
Bruce  v.  Garden,  348,  350. 
Brunnenmeyer  v.  Buhne,  135. 
Bruton  v.  Ins.  Co.,  144. 
Bucklee  v.  Ins.  Co.,  304. 
Buckley  u.  Ins.  Co.,  266. 
Buckofzer  v.  Grand  Lodge,  315. 
Buffalo  &  A.  R.  Co.  v.  Cary.  78. 
Buffalo  Trust  Co«  v.  Aid  Association, 

326. 
Buffum  v.  Ins.  Co.,  270. 
Bulger  v.  Ins.  Co.,  270. 
Bur  bank  v.  Association,    32,  55,  97, 

300. 
Burd  Orphan  Asylum  v.  School  Dis- 
trict, 130. 
Burdine  v.  Grand  Lodge,  130. 
Burdon  v.  Association,  123,  248,  308, 

309,  331. 
Burkhart  v.   Ins.  Co.,  143,  369,  382, 

387. 
Burland  v.  Association,  330,  333,  342. 
Burleigh  v.  Clough,  238. 
Burlington    Relief    v.    White,     138, 

279 
Burls  v.  Smith,  79. 
Burmer  v.  Storm,  209. 
Burns  v.  Grand  Lodge,  15,  154,  158, 

176,  231. 
Burns  v.  Union,  313. 
Burroughs  v.  Assurance  Co.,  347. 
Burroughs  v.  Statt  Mutual,  197. 
Burt  v.  Grand  Lodge,  29,  76. 
Burt  v.  Lathrop,  79,  bO,  117. 
Burt  v.  Oneida  Community,  128. 
Burton  v.  Eyden,  144. 
v.  Society,  60. 
Bush  v.  Sherman,  100. 
Bushaw  v.  Accident  Co.,  414, 


XX 


TABLE    OF    CASES. 


[the  references  are  to  sections.] 


Butchers'  Association,  38. 
Butler  v.  Ins.  Co.,  270. 
Butterfield  v.  Beardsley,  117. 
Byrne  v.  Casey,  136,  213,  219,  227. 


C 


Cables  v.  Prescott,  347. 

Caldicottv.  Griffiths,  85,  117. 

Calkins  V.  Cheney.  40,  134. 

Calvin  v.  Association,  270,  293. 

Cammack  v.  Le%vis,  165,  348.  350. 

Canimeyer  v.  Church,  33,  135. 

Campbell  v.  Ins.    Co.,  300,   303,  326, 
347. 

Campbell  v.  International  Life,  296. 

Campbell  v.  Rawdon,  204. 
v.  Society.  279. 

Canfield  v.  Great  Camp,  49,  316. 

Canning  v.  Farquar.  138. 

Carew  v.  Rutherford,  19. 

Carlen  v.  Drury,  47,  314. 

Carlock  v.  Ins.  Co. ,  270. 

Cariuichael  v.  Association,  160,  194, 
195. 

Carmon  v.  Exchange,  63. 

Carpenter  v.  Association,  295. 

Carr  v.  Thompson,  320. 

Carraher  v.  Insurance  Co.,  199. 

Carrigan  v.  Ins.  Co.,  301. 

Carroll  v.  Ins.  Co.,  317a,  419. 

Cartan  v.  Fr.  Mattfew  Society,  310. 
v.  Society,  23. 

Carter  v.  Ins.  Co. ,  270. 

Cartwright  v.  Vaudry,  179. 

Gary  Library  v.  Bliss,  100,  126. 

Case  v.  Avers,  101. 

Castner  v.  Farmers'  Ins.  Co.,  257. 

v.  Farmers'  Mutual,  64,  260. 

Catholic  Association  v.  Priest,  212. 

Catholic  Knights  v.  Franke,  136. 

v.   Kuhn,    213,  236. 

Catholic  Order  of  Foresters  v.  Calla- 
han, 230. 

Catland  v.  Hovt.  208. 

Catoir  v.  American  Life.  301 ,  307. 

Cawley  v.  Association,  397. 

Central  Bank  v.  Hume,  211. 

Central  City  v.  Walker,  79. 

Chalfant  v.  Pay  ton,  11. 

Chamberlain  v.  Lincoln,  14,  111,  313. 

Chambers  v.  Calhoun,  85,  88. 

Champlain    v.    Assurance  Co.,   365, 
383.  384 

Chandler  v.  Ins.  Co.,  320,  365. 

Chapin  v.  Fellows,  211. 

Chapman  v.  Mclnwrath.  167. 

Charter  Oak  v.  Brant,  211. 

Cbartrandr.  Brace.  3,  201,  205. 

Chase  v.    Ch  -nev,  43,   55,  63,  67,  74, 
132.  133^  291. 

Chasmar  v.  Bucken,  204. 


Chicago  Life  v.  Warner,  307. 
Chicago  Mutual  v.  Hunt,  9,  32,  93,  98, 

119,  144,  248. 
Chickering  v.  Ins.  Co.,  270. 
Child  v.  Society,  79. 
Chisholm  v.  Ins.  Co..  151. 
Chowne  r.  Baylis.  173. 
Chrisholm  v.  National  Ins.  Co.,  195. 
Chubb  v.  Upton,  78. 
Church  v.  Seibert,  133. 

v.  Witherell,  133. 
Churchill  v.  Churchill,  188. 
Cincinnati  Lodge   v.  Littlebury,    49, 

316. 
Citizens  Ins.  Co.  v.  Marsh,  365. 

v.  Sortwell,  252. 
City  v.  Ins.  Co.,  365. 
City  of  Indianapolis  v.  The  Grand 

Master,  etc.,  130. 
Clancev  v.  Salt  Co.,  11,  19. 
Clark  v.  Aid  Union,  302. 
v.  Allen,  165.  351. 
v.  Durand,  211. 
v.  Roots,  152. 
Clevenger  v.  Mutual  Life,  17. 
('lift  v.  Schwabe,  156. 
Clinton  v.  Ins.  Co.,  200. 
Cluff  v.  Ins.  Co.,  157,  368. 
Coates  v.  Mayor,  23. 
Cobb  v.  Ins.  Co..  3 17a. 
Coburn  v.  Ins.  Co.,  322,  381. 
Cockburn  v.  Thompson,  88,  117. 
Cockerel]  v.  Ancompte,  79. 
Codman  v.  Krell,  189. 
Cohen  r.  N.  Y.  Mutual,  331. 
Cohn  H.  Borst,  80. 

Colby  v.  Life  Indemnity  Co.,  251,  297. 
Cole  v.  Ins.  Co.,  393. 
Coleman  v.  Coleman,  78. 

V.   Knights   of    Honor,   23, 
.  158,  168,  215,    218,  219. 
Coles  v.  Iowa  Mutual,  18. 
Collier  v.  Association,  123. 
Collins  v.  Hoxie,  179,  209. 
Coltr.  Ins.  Co.,  393. 
Columbia  Ins.  Co.  v.  Kingon,  342. 
Columbian    Ins.  Co.    v.    Lawrence, 

365. 
Combs  v.  Ins.  Co.,  169,  171,  270. 
Commercial  Insurance  Co.  v.  Huck- 

berger,  326. 
Commercial  Ins.  Co.  V.  Spankneble, 

300. 
Commercial  League  v.  People,  9. 
Commonwealth  v.  Association,  39. 

v.  Beneficial  Institu- 
tion, 287. 
v.  Binghurst,  93. 
v.  Cain,  20. 
v.  German  Society, 

55,  67. 
v.  Green,  106. 


TABLE    OF    CASES. 


XXI 


[the  rkferexces  are  to  sections.] 


Commonwealth  v.  Guardians   of  the 
Poor,  45,  55,  60, 
104. 
v.  Hunt,  19. 
V.  Institution,  64,  65. 
v.  Ins.  Co.,  122. 
v.  Mayor  of  Lancas- 
ter. 28,  105. 
v.  Pa.  Ben.  Societv, 

55. 
v.  St.    Patrick's  So- 
cietv. 39,  55. 
v.  Societv,  23,  59,  60. 
v.  Volz.  86. 
v.  Wetherbee,  8, 161. 
v.  Woelper,  94,  107. 
v.  Worchester,17,  23. 
Comstock  v .  Grand  Rapids,  99. 
Connaughton  v.  Sands,  194. 
Connecticut  Mutual  v.  Baldwin,  186, 
187,  209,  211. 
V.  Burroughs, 

167,  188. 
V.  Groom,  156. 
v.  Luchs,  198. 
v.  Pyle.  143. 
v.  Schaefer,  164, 

322,  351. 
v.  Schwenk,  300. 
v.  Westervelt, 
174. 
Connelly  v.    Association,  29,    32,  50, 

55,  132,  291. 
Continental  Life  v.  Hamilton,  297. 
v.  Lippold,  416. 
v.  Palmer,  186,  188, 

201,  202,  209. 
V.  Rogers,  322. 
v.  Webb,  140,    141, 

148,  188.  205. 
v.  Willetts,  270. 
Conway  v.  Ins.  Co.,  304. 
Cookr.  Ins.  Co.,  390. 
Coolidger.  Ins.  Co.,  300. 
( loopei  v.  Association,  320. 

v.  Ins.  Co..  138,  139,  140,  152, 

156.  223. 
v.  Shaeffer,  349. 
Co-operative   Association  v.    McCon- 

nieo,  297. 
Cornish  v.  Ins.  Co.,  366,  367,  368,  387. 
( iorrigaoD  r.  Society.  63. 
Corson's  Appeal,  351 . 
Coster  v.  Butler.  11*7. 
Cotten  v.  Fidelity  Co.,  270,  300,  302, 

370.  399.  408. 
Conadeau  v.  Accident  Co.,  389. 
County  of  St.  Clair  r.  The  People.  880. 
Courtney  r.  Association.  136,  357,  860. 
Covenant  Mutual  v.  Hoffman,  185, 
190,  197,  201. 
204,  333,  340. 


Covenant  Mutual   v.  Sears,  143,  178. 
331. 
v.  Spies,  257,  279, 
326. 
Coventry  Mutual  v.  Evans,  415. 
Cowman  v.  Rogers,  206. 
Cox  v.  Curwen,  197. 
v.  Stafford.  194. 
Coyle  v.  Societv.  24.  357,  268. 
Cragin  v.  Cragin,  209,  210,  347. 
Craig  v.  Church.  93. 
Cram  v.  Association.  340. 
Cramer  v.  Masonic  Life,  32,  323. 
Crandall  v.  Ins.  Co.,  378. 
Crawford's  Appeal,  167. 
Crawford  County  Mutual  v.  Cochran. 

306. 
Crittenden  v.    Ins.  Co.,  138,  211,  223. 
Crockett  v.  Crockett,  209,  210. 
Crokatt  v.  Ford,  353. 
Cromer  v.  Pinknev.  179. 
Cronkhite  v.   Ins.  Co.,  156,  377,  380, 

381. 
Crosby  v.  Stephan,  328. 
Crossman  v.   Mass.    Mutual.  25,  113, 

254,  298,  299.  352. 
Cullen  v.  Duke  of  Queensbury ,  81,  88. 
Cumberland  Mutual  v.  Douglas,  365. 
Cummings  v.  Webster,  17. 
Cummins  v.  Monteith,  152. 
Card  v.  Wallace,  133. 
Currier  v.  Ins.  Co.,  270. 
Curtis  v.  Ins.  Co.,  170,  329.  333,  334. 

335, 340. 
Cushman  v.  Societv,  339,  340. 
Cutter  v.  Doughty^  188. 


J) 


Dailey  r.  Preferred  Masonic,  138,  408. 

Dails  v.  Lloyd,  346. 

Dall.y  v.  Ins.  Co.,  164   351. 

Damont  v.  R.  R.  Co.,  383. 

Dane  v.  Young,  220. 

Daniels  v.  Pratt,  158,  200,  224,  237. 

Daniher  v.   Grand   Lodge,  300,  315. 

317. 
Harrow  v.  Society,  156,  157,  333. 
Davidson  v.   Old    People's    Society. 
136,  147.293. 
v.  Supreme    Lodge,    143. 

333,  270.  323. 
v.  Young,  300. 
Davies  r.  Bailey,  ]!)<;. 
v.  Davies,  197. 
Davis  r.  Davis.  415. 
Dawkins  r.  Antrobus,  70,  71,  73,  75. 
Dawson  r.  Ins.  (  o..  401. 
Day,  Guardian,  v.  Case,  182,  190,  354. 
Day  v.  Ins.  Co.,  138,  275,  280,  300. 

327. 
Dayton  Ins.  Co.  v.  Kelley,  270. 


xxu 


TABLE    OF    CASES. 


[the  references  are  to  sections  ] 


De  Frece  v.  Ins.  Co.,  301. 
De  Graw  v.  Accident  Society,  388. 
De  Jonge  v.  Goldsmith,  167. 
Deaderick  v.  Sampson,  133. 
Deady  v.  Association,  213,  243. 
Dean  v.  Bennett,  63. 

v.  Ins.  Co.,  156. 
Deardortf  v.  Association,  334,  340. 
Deginther's  Appeal,  201. 
Delacy  v.  Company,  61. 
Delanney  v.  Strickland,  79. 
Delaware  Institute  v.  Delaware  Co., 

130. 
Dennings  v.  Supreme  Lodge,  250. 
Den  v.  Bolton,  133. 
Dennett  v.  Kirk,  218,  237. 
Dennis  v.   Association  292,  295,  381. 

v.  Ins.  Co.,  322. 

v.  Kennedy,  88. 
De  Senaucour  v.  Societe  La  Prevoy- 

ance,  84. 
Detroit  Schuetzen  v.  Verein,  11. 
Derricks  Ins.  Co.,  320. 
Devoss  v.  Gray,  79. 
Dexter  Savings  Bank  v.  Copeland, 

173. 
Dial  v.  Valley  Mutual,  258,  285. 
Diboll  v.  Ins.  Co.,  138. 
Dickinson  v.  Chamber  of  Commerce, 
39. 
v.  Grand  Lodge,  298. 
V.  Purvis,  196. 
Diehlv.  Ins.  Co.,  300,  306. 
Dietrich  V.  Madison  Relief  Ass'n,  13, 

79,   165,  212. 
Diffenbach  v.  Vogeler,  169. 
Diligent  Fire  Co.  v.  Commonwealth, 

20,  29. 
Dilleber  v.  Ins.  Co.,  325,  393. 
Diocese  of  East  Carolina  v.  Diocese 

of  North  Carolina,  133. 
District  Grand  Lodge  v.  Colin,    14, 
17,  41,  70, 
73,    268, 
285,    302. 
v.     Jedidjah 
Lodge,  139. 
Ditch  v.  Sennott,  237. 
Dixon  v.  Sadler,  365. 

v.  The  People,  344. 
Dodds  v.  Aid  Association,  404. 
Dodge  v.  Freedman's  Co.,  294,  325. 
Doggev.  Ins.  Co.,  169,  171. 
Dolan   v.    Court  of  Good  Samaritan, 

49,  136,  310,  318. 
Dolan  v.  Mayor,  99. 
Doniol  v.  Ins.  Co.,  152. 
Doremus  v.  Church,  94a,  119. 
Dorin  v.  Dorin,  179. 
Dorsey  v.  Smyth,  99. 
Doty  v.  Association,  333,  334. 
Doubleday  v.  Muskett,  81. 


Dougherty  v.  Ins.  Co.,  326,  387. 

Douglas  v.  Ins.  Co. ,  282. 

Downing  v.  Mann,  81. 

Downing  v.  Pugar,  79. 

Downing  v.   St.  Columba's   Society, 

64,  65. 
Dows  v.  Naper,  32. 
Dowses  Case,  15. 
Doyle  v.  Benevolent  Society,  19. 
Doyle  v.  Petroleum  Co.,  119. 
Dozier  v.  Casualty  Co.,  375. 
Drabek  v.  Grand  Lodge,  101. 
Drake  v.  Pell,  197. 
Drew  v.  Wakefield,  196. 
Dublin  Case,  133. 
Duke  v.  Fuller,  121. 
Duncan  v.  Jones,  84. 

v.  Preferred  Association,  364, 
366.  368,  369,  386,  387. 
Dunham  v.  Griswold.  356. 

v.  Morse.  270. 
Dunkley  V.  Harrison,  402. 
Duran  v.  Ins.  Co.,  157. 
Durham  V.  Ins.  Co..  152. 
Durhans  r.  Corey,  64,  260. 
Durian  v.  Central  Verein,  3,  147,  183, 

212.  213.  230. 
Duringer  v.  Moschino,  261. 
Dutton  v.  Willner,  167,  348. 
Duvall  v.  Goodson,  188,  201,  212,  238. 
Dwelling  House  Ins.  Co.  v.  Brodie, 

320. 
Dwight  v.  Ins.  Co.,  407. 

E 

Eames  v.  Ins.  Co.,  140,  414. 
Earnshaw  v.  Society,  320,  333,  334, 

335,  340. 
Eastabrook  v.  Ins.  Co.,  156. 
Eastman  v.  Provident  Mutual,  136, 

170,  212,  232,  325. 
Eaton  v.  Supreme  Lodge,  18,  251,  255, 

271,  301. 
Eccleston  v.  Clipsham,  322. 
Eckerly  v.  Alcorn,  261. 
Eckert  v.  Society,  159. 
Eckler  v.  Terry,  146. 
Eddington  v.  Mutual  Life,  325. 
Edwards  v.  Ins.  Co.,  156,  317,  416. 
Eggenberger  v.  Association,  379,  380, 

411. 
Eggleston  v.  Association,  332. 

v.  Ins.  Co.,  399. 
Eichbaum  v.  Irons,  79,  81. 
Eiseman  v.  Juclah,  238,  244. 
Eisman  ?>.  Poindexter,  189. 
Elkhart  Mutual  v.  Houghton,  3,  49, 

143,   159,   317,  322,  333,  334, 

340,  344. 
Ellerbe  v.  Association,  122. 

v.  Barney,  348. 


TABLE    OF    CASES. 


XX111 


[the  references  are  to  SECTIONS.] 


Ellerbe  v.  Faust,  32,  300. 
Elliott  v.  Kennedy,  262. 
v.  Whedbee,  232. 
Ellis  v.  Ins.  Co..  320. 
Ellison  v.  Bignold,  113,  117,  313. 
Elmer  v.  Association,  274,  275,  305, 

323. 
Elsey  v.  Odd  Fellows  Ass'n,  143,  220a, 

190,  194,  195,  197,  231,  357. 
Ely's  Appeal.  189. 
Emmeluth  v.  Association,  322. 
Employer's  Liability  Co.  v.  Merrill, 

364. 
Endie  r.  Slemmons,  201. 
Endowment  Association  r.  State,  3. 

v.  Wood,  201. 
English  v.  Arbuckle,  356. 
Eppingeru.  Russell.  214. 
Epstein  u.  Mutual  Aid,  23,  262.  263. 
Equitable  v.  McLennon,  20,  39,   288, 

289. 
v.  Osborn,  367,  368,  387. 
Equitable  Life  v.  Hazlewood,  350. 

v.  Paterson.  156,  378, 
393. 
Equitable  Mutual  v.  McCluskey.  375. 
Equitable  Society  v.  Petersen.  183. 
Estate  of  Breitung,  Adler  v.  Stoffel, 

141. 
Erd  v.  Association.  39. 
Erdmann  v.  Ins.  Co.,  3,  143,  276,  285, 

302,  304.  323. 
Essery  v.  Court  Pride,  111. 
Fsty  v.  Clark,  196. 
Eury  v.  Ins.  Co..  '-'TO. 
Evangelical  Ass'n  Appeal,  134. 
Evans  v.  Club,  39. 

v.  Ins.  Co..  97. 
v.  Opperman,  1s."j. 
Evarts  v.  Association,  251,271,   326. 
Ewinu;  v.  Medlock,  88. 
Excelsior  .Mutual  \.   Kiddle,  330,  333. 
Ex  parte  Paine,  •-".». 
Expressman's  Aid  Society  v.  Lewis. 

202. 


F 


Fairchild  v.    Association,    333,    339, 
340. 

r.   Assurance  (  !o.,   165. 
Fairlie  r.  Hastings,  277. 
Farman  v.  Farman,  1!)7. 
Farmer  v.  State,  :'>. 
Farmers'  .Mutual  r.  Brown,  302. 

r.  Chase.    250.    342. 

r.  Koont/..  305. 

v.  Mylin,  346. 

r.   Snyder,  144. 
Fanners'  Union  v.  Wilder,  305. 
Farnswoi'th  v.  Storrs,  it.  84, 
Farr  v.  Grand  Lodge,  203. 


Farrell  v.  Cook,  73. 

v.  Dalzell,  73. 
Farrer  v.  Close,  19. 
Farrie  r.  Supreme  Council,  257,  270. 
Faughner  v.  Ins.  Co..  138. 
Fawcetl  V.  Charles.  84. 
Fayette  Mutual  v.  Fuller,  250. 
Fehlberg  v.  Cosine,  152. 
Feits,  Executor,  v   Vanatta.  188. 
Felix  v.  Grand  Lodge,  186,  209. 
Fells  v.  Read,  128. 
Fenn  v.  Lewis,  176. 
Ferguson  v.  Mass.  Mutual.  351. 
v.  Stuart's  Ex'rs,  189. 
Ferraria    v.   Yasconcellos,    132,    133, 

135. 
Ferrer  v.  Ins.  Co.,  144. 
Ferris  v.  Thaw,  79. 
Firemen's  Ins.  Co.  r.  Powell,  365. 
Fischer  v.  Raab,  104,  118. 

v.  Ins.  Co.,  388. 
Fidelity  Co.  v.  Teter,  385. 
Fishbeck  v.  Ins.  Co.,  399. 
Fisher  v.  Andrews.  ::u(J. 

v.  Bishop,  356. 

V.  Board  of  Trade,  54. 

v.  Keane,  75.  76. 

v.  Schiller  Lodge,  276. 
Fisk  v.  Aid  Union.  14s.  223,  227. 
Fitch  v.  Ins.  Co.,  156,  183,  325. 

V.  Reiner,   111. 
Fitton  r.  Ins.  Co.,  380,  396,  398. 
Fitzgerald  v.  Equitable  Reserve,  13, 

147,  333. 
Fitzpatrick  v.  Ins.  Co.,  183,  269,  299, 

300. 
Flagg  v.  Swift.  87. 
Flemyng  v.  Hector,  79. 
Flint  r.  Pierce.  17. 

Flocton  v.  Edwin  Forrest Lodge,  115. 
Flynn  V.  Association.  347. 

V.  Ins.  Co..  407. 
Fogg  v.  Supreme  Lodge,  10:1.  124. 
Folic!  te  v.  Association.  399. 
Fohner's  Appeal,  160,  194. 
Ford  v.  U.  s.  Ace.  Co.,  L52,  402. 
Forse  v.  Supreme  Lodge,  23,  260,  262, 

323. 
Fort  Des  Moines  Lodge  V.  County  of 

Folk.  Dill. 
Foster  r.  (rile.  202,  211. 

v.  Moulton,  8,  78. 
Fowler  r.  Butterlj  .  211. 

V.  Ins.  Lo.,  L52,  297. 
Fox  r.  Ins.  Co.,  252,  349. 
Frain  v.  Ins.  Co..  282. 
Fran.klin   r.  Commonwealth,  23,  38. 
Franklin  Bank  V.  (  looper,  101. 
Franklin  Ins.  Co.  17.  Colt,  138. 

v.  Hazzard,  165. 
v.  Humphrey,  323. 
v.  Marian,  152. 


XXIV 


TABLE    OF    CASES. 


[the  reffrences  are  to  sections.] 


Franklin  Ins.  Co.  v.  Sefton,  165,  301, 

307,  322. 
Franklin  Life  v.  Wallace,  143,  285. 
Fraternal  Guardian's    Estate— Shee- 

ler*s  Appeal,  124. 
Fraternal   Mutual  v.  Applegate,  325. 
Fredenthal  v.  Taylor,  81. 
Frederick  v.  Henderson,  152. 
Freeman  v.  Association.  398. 

v.  Society,  333,  336,  337,  339. 
v.  Ins.  Co.,  380,  381. 
Freme  v.  Brode,  350. 
French  v.  Association,  303. 
Frey  v.  Fidelity  Lodge,  144. 

v.  Ins.  Co.,  156,  258. 

v.  Wellington  Mutual,  269. 
Fried  v.  Ins.  Co..  138.  223. 
Friezen  i'.  Ins.  Co.,  320. 
Fritz  v.  Muck.  49,  61,  76,  285,  316. 
Fritzler  v.  Robinson,  152. 
Frost  v.  Saratoga  Ins.  Co.,  300. 
Fugure  v.  Society,  24. 
Fuller  v.  Association,  23. 
v.  Trustees.  55,  60. 
Fulnier  v.  Association,  333. 


G 


Gable  v.  Miller,  135. 
Gaige  v.  Grand  Lodge,  291. 
Gaff  V.  Greer,  133. 
Galbraith's  Admr.  v.  Ins.  Co.,  300. 
Gale  v.  Association,  379. 
Gamb-y.  Ins.  Co.,  211. 
Gamble  v.  Assurance  Co.,  418. 
Gans  v.  St.  Paul  Ins.  Co.,  300. 
Garbutt  v.  Association,  260,  303. 
Gardner  v.  Freemantle,  63,  68. 

v.  Heyer,  179. 
Garham  v.  Society,  124. 
Gamer  v.  Ins.  Co.,  211. 
Garretson  v.  Equitable  Mutual,  260, 

341. 
Garrick  v.  Lord  Camden,  196. 
Gary  v.  Association,  354. 
Gaterman  v.  Ins.  Co. ,  298. 
Gauch  v.  Ins.  Co.,  190. 
Gay  v .  Farmers'  Mutual,  29,  36. 

v.  Ins.  Co.,  138. 
Geiger  v.  McLinn.  328. 
Gellatly  v.  Mutual  Benefit,  257. 
Genest  v.  L'Union,  318. 
Gentry  v.  Supreme   Lodge,  159,  212. 
Georgia  Masonic  v.  Gibson,  136,  302, 

324. 
German     Congregation    v.  Presler, 

135. 
German  Ins.  Co.  v.  Ward,  246. 
Germanialns.  Co.  v.  Boykin,  415,  417. 

v.  Curran,  326,  415. 

v.  Deckard,  416. 

v.   Sherlock,  365. 


Gibson  v.  Armstrong,  133. 

v.  Ky.  Grangers,  176,  282. 
v.  Society,  158,  284,  348. 
Giddings  v.  Ins.    Co.,  138,    139,  141, 

273. 
Gilbert  v.  Crystal  Lodge,  84. 

v.  Moose,  346,  348,  3.50. 
Girard  Ins.  Co.  v.  Field,  327. 
Girard  Life  t>.  Mutual  Life,  271,  279, 

299. 
Gittings  v.  McDermott,  189. 
Given  v.  Odd  Fellows.  177,  202. 
Gladding  v.  Gladding,  219,  354. 
Glanz  v.  Gloeckler,  201,  211. 
Glardon  v.  Supreme  Lodge,  47,  58, 

294. 
Globe  Ins.  Co.  v.  Boyle,  153,  200,  232. 
Globe  Ins.  Co.  v.  Duffy,  139. 
Goddard  v.  Merchant's  Exchange,  23. 
Godsal  v.  Webb,  350. 
Goedeckev.  Ins.  Co.,  298. 
Goetzmann  v.  Ins.  Co.,  157. 
Golden  Rule  v.  People.  3.  9,  19. 
Goldsmitb  v.  Ins.  Co.,  152,  156,  326. 
Goodman  v.  Jedidjah  Lodge,  100, 112, 

115,  121,  126,  129. 
Goodwin  v.  Mass.  Mutual,  351. 
Gorman  v.  O'Connor,  128. 

v.  Russell,  117,  118. 
Gosling  v.  Caldwell,  189,  210. 
Gottlieb  v.  Cranch,  350. 
Gould  v.  Bank,  356. 

v.  Emerson,  209,  347. 
Gough  v.  St.  John,  101. 
Governors  v.  Union,  3,  19. 
Grace  v.  N.  W.  Association,  223. 
Grand  Central  Lodge  v.  Grogan,  315. 
Grand  Lodge  V.  Brand.  95,  144,  286, 
300. 
v.  Child,  219,  223. 
v.  (  ressey,  294. 
v.  Eisner,  136, 179, 195. 
v.  Jesse,  97,   292,  295, 

299. 
v.  Noll,'  223. 
v.  Safer,  136,  146,  185, 
209,  354. 
Grand  Rapids  v.  Bulkley,  93. 
Granite  Mutual  v.  Porter,  3. 
Grant  v.  Kline,  349. 

v.  Ins.  Co.,  170. 
Grattan  v.  Ins.  Co.,  326,  407. 
Gray  v.  Bank,  53. 

Gray  v.  National  Association,   282, 
300,  302. 
v.  Pearson,  80. 
v.  Society,  31,  55,  64,  287. 
v.  Supreme  Lodge,  152,  286. 
Gregg  v.  Society,  39. 
Greely  v.  Ins.  Co.,  23,  262,  263. 
Green  v.  Cody,  89. 

v.  Society,  60,  67. 


TABLE    OF    CASES. 


XXV 


[the  references  are  to  sections.] 


Green  v.  Watkins,  50. 
Greene  v.  Ins.  Co..   171,  277. 

v.  Walton.  200. 
Greenfield  V.  Ins.  Co..  185. 
Greeno  v.  Greeno,  212,  238. 
Greenwood  v.  Holbrook,  197. 
r.  Maddox,  194. 
Greg?  v.  So(  siety ,  51. 
Greshamv.  Ins.' Co..  157,  388. 
Griesa  v.  Association,  303,  304. 
Grittin  ?\  Association,   157. 
Griswold  ?•.  Hazard.  152. 
v.  Sawyer,  197. 
Grit  v.  Ins.  Co.,  278. 
Grossman    v.    Supreme   Lodge,  323, 

825. 
Grosvenor  v.  Society,  22.  55,  74,  128. 
Guardian  Mutual  V.  Bogan,  156,  322. 
Guernsey  >'.  Ins.  Co..  152. 
Guldenkirch  v.  Association.  388. 
Gundlach   r.   Association,   13,  19,  24, 

136,  213. 
Gunmakers  v.  Fell,  19. 
Gunther  v.  Association.  260,  269,  290, 

299. 
Gutterson  v.  Gutterson,  202. 
Gyllenhammer  v.  Society,  344. 


II 


Habicht  v.  Pemberton.  88. 

v.  Society.  89. 
Hadden  v.  Chorn,  133. 

Haden    0.   Association.    142. 

Bagerman  v.  Association.  12. 
Hainer    v.    Legion    of    Honor,    226, 

237. 
Hale  v.  Everett,  132.  133,  134. 

v.  Ins.  Co..  17,  18. 

v.  Mechanics  Mutual,  97. 
Hall  V.  Am.  .Masonic.  380,   4(>S. 

/•.  Association,  218,  221.  223. 

v.  Merrill,  97. 

v.  People's  Mutual,  317,  321. 

V.  Raw  Is.   311. 

v.  Supreme  Lodge,  47,  2.17,  276, 
379,  288. 
Hallan  r.  Gardner's  Adm'r,  209. 
Hallock  v.  In>.  Co..  138,  139,  142. 
Hallowell  v.  Phipps.  188. 
Halsey  V.   Patterson.  197. 
Haniill  v.  Supreme  <  !ouncil,  108,  324. 
Hamilton  v.  Ins.  <  to..  L39,  317a. 
v.  McQuillan,  236. 
v.  Pitcher,  209. 
Hamilton  Mutual  r,  Bobart,  15. 
Bammerstein  v.  Parsons,  L98. 
Hammond  v.  American  .Mutual,  296. 
Hani'  V.  Association.  17.  300. 
Hankison  v.   Pago,  328,  383,337,  842. 
Hattley  v.  Association,  298,  299. 
Hannigan  v.  Ingraham,  214,  232,  236. 


Hanover  Ins.  Co.  v.  Connor.  327. 
V.  Lewis,  360. 
Bansen  v.  Supreme  Lodge,  268,  271. 

289,  294.  325. 
Bappy  v.  Morton.   132.  134. 
Bardie  v.  Ins.  Co.,  140.  141,  148. 
Hardin  v.  Baptist  Church,  40. 
Harding  o.  Littlehale,   146,   162,  234, 

236. 
Bari  v.Lloyd,  179. 
Hurl  V.  Ins".  Co..  330,  340. 
Barley  v.  Heist,  201. 
Harmon  v.  Dreher,  i:!3. 

v.  Lewis,  169. 
Barp  v.  Ins.  Co.,  142. 
Harper  v.  Ins.  Co.,  368. 

v.  Straus,  133. 
Harpers  Adm'r  V.  Ins.  Co.,  157. 
Barriman  v.  Baptist  Church,  13. 
Harrington  r.   Association,   47,    111, 
313 
V.  Society,  22,  23,  318. 
Harris  v.  Harris.  344. 
v.  Ins.  Co.,  398. 
v.  Society.  286. 
Harrison  v.  Boyle,  133. 

v.  Ins.  Co.,  152. 
Hartford  Ins.  Co.  v.  Bayden,  301. 

v.  Mathews,  358. 
Hartman  v.  Ins.  Co.,  156,  407. 
Hart's  Case,  15. 
Bartwell  v.  Ins.  Co.,  300. 
Harvey  v..  Grand  Lodge,  97,  292,  301. 
Hascall  v.  Cox,  189. 
Haskins  v.  Ins.  Co.,  142. 

v.  Kendall,  202. 

v.  Ky.  Grangers,  260,  269. 
Hasselman  v.  Company,  12. 
Bassler  v.  Association,  67,  76. 
Bastings  v.  Ins.  Co.,  95,  260. 
Batch  v.  Ins.  Co.,  157. 
Bathaway  v.  Ins.  Co.,  156. 
Hawkins V.  Rutt.  870. 
Hawkshaw    v.   Supreme  Lodge,   46, 

271,  295. 
Bavene  v.  Sackett,  237. 
Baj  r.  Ins.  Co.,  320. 
Bayden  r.  Noyes,  19. 
Bead  v.  Ins.  Co.,  8,  215. 
Bealej    v.  Ass  iciation,  374,  393. 
Heath  v.  Goslin,  81. 
Beaton  v.  Ins.  Co.,  270. 
I  [edger  v.  Rennaker,  27. 
Bees  v.  Nellis,  322. 

Heinian    r.   Ins.  ( 'o.,  139. 

Beisler  v.  Stose.  860. 

Befferman  v.  Supreme  Council.  258, 

2f>s.  :;:lo. 
I  letter   V.  Calm.  356. 

Bellenberg   /•.    District    Xo.  1.    136. 
2U2.  212.  218,   220,    222a.  224, 
238. 


XXVI 


TABLE    OF    CASES. 


[the  references  are  to  sections.] 


Hembeau  v.  Great  Camp,  316. 
Henderson  v.  Ins.  Co.,  865. 
Hendrickson  v.  Decow,  132. 
Henry  v.  Dietrich.  15,  90,  134. 

v.  Grand  Lodge,  322. 
Herndon  v.  The  Triple  Alliance,  333. 
Hesinger    v.    Association,    342,    344, 

420. 
Hess  v.  Werts,  82. 
Heyrnan  v.  Dubois,  327. 
v.  Meyer,  164. 
Heywood  v.  Association,  415. 

v.  Buffalo.  51. 
Hibernia  Co.  v.  Harrison,  250. 
Hickey  v.  R.  R.  Co,,  382.  383. 
Hicks  v.  Perry,  214,  231. 
Higgind  v.  Hopkins,  82. 
v.  Sargent,  360. 
High  Court  v.  Zak,  46,  155,  288. 
Highland  v.  Highland,  149,  159,  173, 

220a,  229,  211,  212. 
Hill  v.  Crook.  17','. 

v.  Hart-Davis,  91. 
v.  Ins.  Co..  374,  393. 
v.  Moore,  317. 
Hillyard  V.  Ins.  Co.,  295.  347. 
Himmelein  v.  Supreme  Council,  323. 
Hinkley  V.  Blethen,  128. 
Hirschl  v.  Clark,  214,  223. 
Hitter  v.  St.  Aloysius  Society,  155. 
Hobbs  v.  Association,  26,  27,  136,  407. 
Hochreiter's  Appeal,  26. 
Hodgdonv.  Ins.  Co.,  2S(i,  304. 
Hodge's  Appeal,  L89,  197. 
Hoeffner  v.  Grand  Lodge,  45,  55,  66, 

294. 
Hoffman  v.  Ins.   Co.,   143,   270.  276. 

291,  300. 
Hogan  v.  League,  7,  27,  252,  255. 
Hogins  v.  Supreme  Council,  155,  290. 
Hogle  v.  Ins.  Co.,  198,  347. 
Holabird  v.  Ins.  Co.,  183. 
Holland  v.  Chosen  Friends,  407. 
Uolbrook  v.  Ins.  Co.,  262,  290. 
Holland  v.  Supreme  Council,  407. 

v.  Taylor,  130.  213,  218,  220, 
222,  222a,  237.  34S.  354. 
Hollister  r.  Ins.  Co.,  268,  270,  271. 
Hollobough  v.  Association,  404. 
Holmes  v.  Higgins,  85. 
v.  AVillard,  95. 
Holterhoff  v.  Ins.  Co.,  365. 
Home  Benefit  v.  Sargent,  326. 
Home  Ins.  Co.  v.  Howard,  356. 
v.  Marple,  261. 
v.  Meyer,  320. 
v.  Morse,  49,  317. 
Homer  v.  Ins.  Co..  283. 
Hooker  v.  Vandewater,  19. 
Hooper  v.  Ins.  Co.,  403. 
Hope  Mutual  v.  Weed.  308. 
Hopkins  v.  Hopkins,  212. 


Hopkins  v.  Marquis  of  Exeter,  68. 
Horn  v.  Association,  156. 
Hotel   Men's  Mutual  v.    Brown,  218, 
220a,  222,   222a,  224,  237, 
354. 
Houghton  v.  Kendall,  189. 
Howard  Ins.  Co.  v.  Hocking,  320. 
Howe  v.  Society,  405. 
Howell  v.  Ins.  Co.,  272,275,  295,  297. 
Howiand    v.    Continental   Ins.   Co., 
296. 
v.  Cuykendall,  308. 
Hubbard  v.  Ins.  Co.,  326. 
Hughes  v.  Hughes,  188. 
Hull    v.   Accident  Association,   366, 
383. 
v.  Hull,  186,  188,  202. 
v.  Ins.  Co.,  285. 
Humphreys  v.  Association,  300,  399, 
404. 
v.  Company,  89. 
Hunt  v.  School  District,  104. 
Hunter  v.  Scott,  146. 
Huntley  v.  Whittier.  261. 
Hurd  v.  Masonic  Mutual.  323. 
Hussey  V.  Gallaher,  25,  104,  127. 
Huston  V.  Rentlinger,  19,  51. 
Hutchcraft  v.  Ins.  Co.,  377,  388. 
Hutchings  v.  Miner,  212. 
Hutchinson  v.  Ainsvvorth.  152. 

v.    Lawrent  e,   55,  56,  61. 
V.  Supreme  Tent.  27, 137, 
402.  404. 
Hutson  r.    Merrifleld,    143,  165,   201, 

202,  211. 
Hyatt  v.  Wait.  308. 
Hyde  i\  Woods,  19. 
Hysinger   v.  Supreme  Lodge,   3,   96, 
186,  144,  158,  213. 


In  re  Baldwin,  19. 

Equitable    Reserve,    100,    108, 
115,  122,  120,  308.  309. 

Globe  Association.  32,  119,  144. 

Griests'  Estate,  347. 

Harris,  184. 

Helping  Hand,  11. 

La  Solidarite  Association,  144. 

McKinnev,  327. 

Mary  E.  Morgan,  209. 
In  the  matter  of  Morian,  208. 
In  re  Mutual  Aid.  11. 

National  Indemnity,  9. 

Newell  Smith.  44. 

Protection  Life,  248,  308,  309, 
331. 

Railroad  Co.,  93. 

Russell's  Policy  Trusts.  327. 

St.  Clement's  Church,  76. 

St.  James  Club,  79,  128. 


TABLE    OF    CASES. 


XXV11 


[THE   RIFERENCES   ARE  TO  SECTIONS] 


In  re  Society.  38. 
Styan,  173. 
In  the  matter  of  Webb,  IT::. 
111.   Masons   v.   Baldwin,   3,  290,  298, 

301.  307. 
Illinois  Order  v.  Bcsterfield,  2G2.  275, 

389. 
111.  Ins.  Co.  v.  Stanton,  298,  299. 
Inderwick  v.  Snell,  73. 
Ingersoll  r.  Kni.ulits.  159,  377. 
Ingham  v.  Reform  Club,  128. 
Ingram  w.  Supreme  Council,  292,  295. 
Inhabitants,  etc..  v.  Randall,  102. 
Inman  V.  Ins.  Co..  416. 
Innes  v.  Wylie,  53,  70,  75. 
Insurance  Co.  v.  Armstrong,  388. 

v.  Beatty,  142. 

v.  Burroughs,  398. 

v.  Boykin.  417. 

r.  Brim.  4 Hi. 

v.  coit.  isa 

V.  Crandal.  397. 

V.  Day.  183. 

v.  Edwards,  419. 

v.  Fish,  399. 

v.  Higginbotham,  138. 

v.  Houghton,  342. 

V.  Johnson.  142. 
Ins.  Association  V.  Kryder,  385. 
Ins.  Co.  V.  Lindsev,  416. 
v.  McCrea,  399. 
v.  Mahone,  414. 
v.  Martin.  183. 
Insurance  C<>.  r .  Mowry,  410. 
Ins.  Co.  V.  Norton.  283. 
Insurance  Co.  v.  Perrine,  18. 
Ins.  Co.  v.  Seaver.  157,  397,  398. 
Inland  Co.  v.  Stauffer,  415. 
Ins.  Co.  v.  Terry,  156. 

v.  Tomlinson,  . 
Insurance  Co.  v.  Tweed.  397,  398. 
Ins.  Co.  v.  Wilkinson,  152,  111. 

v.  Young,  138. 
Ireland  y.  Ireland.  218,  222.  354. 
Irish  Catholic  v.  O'Shaugnessy,  318. 
Irvin's  Appeal.  189. 
Irving  v.  Ins.  Co..  326. 
[sgrigg  '•.  Schooley,  213,  22:!,  220. 
Isitt  v.  Assurance  <',,..  397. 


Jackman  v.  Nelson,  184,  193,  209,  210. 
Jackson  '■.  Association,  50,   260,  292, 
295,  305.  333,  334,  340. 

V.  Anderson.  165. 

r.  Staats,  188. 
Jacob  v.  Ins.  Co.,  156. 
James  v.  ( lutler,  152. 
v.  Jellison,  1 1. 
Jamieson  v.  Association,  189,  190. 
JeiTries  17.  Ins.  Co.,  ?00. 


Jennings  v.  Ins.  Co.,  320. 
Jewell  v.  Grand  Lodge.  176.  17*. 
Jinks  V.  Banner  Lodge,  218,  224. 
John  Hancock  Ins.  Co.  1:  Moore,  156, 

32(5. 
Johnson  v.  Alexander,  190,  350. 

v.  Association.  20,  271. 

v.  Hall.  202,   213. 

v.  Ins.  Co.,  305,  320. 

v. Johnson.  344. 

V.  Jones.  94a. 

v.  Knights,  190,354. 

V.  Southern  Mutual,  290. 

V.  Stanton.  238. 

v.  Supreme  Lodge,  177.   189. 

V.  Van   Epps,   202,  212,  234, 
351. 
Johnston  Co.  v.  Meinhardt,  19. 
Johnston  1?.  Jones,  93. 
Joliffe  V.  Madison  Mutual.  302. 
Jones  v.  Association.  95,  319. 
v.  ( lurry,  238. 
v.  Ins.  Co..  419. 
v.  Milton,  int. 
r.  Sisson.   l»4,  266. 
Jubber  v.  Jubber,  184. 
Judah  v.  Ins.  Co..  104. 
Juker  v.  Commonwealth,  94. 


K 


Kaiser?-.  Kaiser.  190.  192.  214,  236. 
Kansas  Mutual  r.  Hill,  130. 
Kansas  Union  v.  Gardner,  344. 

r.  Wliitt.  245.320.333, 
334,  336,  340,  344. 
Kanz  r.  Greal  Council,  170.  320. 
Karcher  v.  Supreme  Lodge,  47,  55, 

111,  20s. 
Kantrener  *'.  Ins.  Co.,  148. 
Kaw  Life  v.   Lemke,    103,   322,  333, 

339. 
Bleary  v.  Mutual  Reserve, 
Keeler  v.  Association,  95,  267. 

Keels  r.  Association.  150.  320. 

Kc,  nr  r.    Association.  366,   367,  368. 

Keener  v.  Grand  Lodge,  158,  179,  183, 

l'.i I.  l'.ir,.  354. 
Kehlenheck  r.  Bund,  is.  jj. 
Keller  r.  Gaylor,  188,  236. 
Kdlcv  0.  A.  o.  II..  1 II.  318,  402. 
r.  Ball,  209. 

?•.  Railroad.  15, 

Kellogg  v.  Railway  Company,  397. 
Kelly  ''.  Solari,  346. 
Kelsall  v.  Tyler,  315. 
Kelsey  v.  U.  S.  Ins.  Co..  325. 
Kennan  v.  Rundle,  25 1. 
Kenney  v.  Altvater,  261. 
Kent  v.  Mining  t  '<>..  24 
Kentucky   Grangers   <\    Eowe,    176, 
216. 


XXV111 


TABLE    OF    CASES. 


[THE  RKFERENCF.S    ARE  TO  SECTIONS.] 


Kentucky  Grangers    v.     McGregor, 

158,  176, 282, 284. 
Kentucky  Lodge  v.  White,  310,  315. 
Kentucky  Masonic  v.  Miller,   20,  96, 

158,  191,  212. 
Kentucky  Mutual  v.  Jenks,  138,  223, 
270. 
V.  Turner,  122,  344, 
320. 
Kenvon  v.  Association.   95,  267,  299, 
300,  304. 
v.  Ins.  Co.,  407. 
Kepler  v.  Supreme  Lodge,  219,  225, 

237. 
Kerman  v.  Howard,  211. 
Kern  v.  Zeigler,  353. 
Kerr  v.  Association,  157,  342,  344,  420. 
Kerr  v.  Trego,  76. 
Kershaw  v.  Bailey,  84. 
Kessler  v.  Kuhns,  165. 
Keyser  v.  Stansifer,  134. 
Kil'lips  v.  Ins.  Co.,  320,  415. 
Kimball  v.  Harman,  19. 
v.  Ins.  Co.,  416. 
v.  Story,  196. 
King  v.  Chalke,  39. 

v.  Faversham,  59. 
v.  Mayor,  39,  59,  61. 
v.  Stewart,  17. 
Kingsley  v.  Ins.  Co.,  144. 
Kington  v.  Kington,  270. 
Kinney  v.  Association,  317a,  411. 
Kinsey  v.  Louisa  County,  320. 
Kinskern  v.  Church,  134. 
Kirkpatrick  v.  Eagle  Lodge,  84. 
Klapka  i\  Order  Germania,  355. 
Klein  v.  Ins.  Co. .  295. 
Kline  v.  Association,  270,  278,  325. 
Klotz  v.  Klotz,  159. 
Knapp  v.  Association,  402,  408. 
Knickerbocker  Ins.  Co.  V.  Gould.  360. 
v.  Jordan,  156, 
377. 380,  392. 
v.    Pendleton, 

270. 
v.  Peters,   156. 
Knickerbocker    Life    v.  Weitz,  201, 

347. 
Knight  v.  Supreme  Council,  257,  271. 
Knights  of  Pythias  Case,  72. 
Knights  Templar  v.    Berry,   141. 
Knights  v.  Burke,  282. 
v.  Fortson,  322. 
v.  Nairn,  223,  354. 
v.    Supreme    Commandery, 

251. 
v.  Watson,  212,  219, 231,  243, 
354. 
Knox  v.  Turner,  350. 
Koehler  v.  Brown,  127. 

v.  Centennial  Mutual,  185. 


Koelges  v.  Ins.  Co.,  301,  307. 
Kohen  v.  Association,  139,  142. 
Korn  v.  Society,  137. 
Kuhl  v.  Meyer,   80.  89,  104,  118,  124, 

126,  127. 
Kurz  v.  Eggert,  86. 
Kynaston  v.  Mayor,  63,  104. 


Labouchere    v.  Earl  of  Wharncliff, 

63,  76. 
Ladies  Benevolent  Society  v.  Society, 

128. 
Lafond  v.  Deems,  47,    111,   117,  118, 

313. 
Laing  v.  Colder,  382. 
LaManna  v.  Accident  Company,  340, 

344. 
Lamb  t).  Cain,  133. 
Lambert  v.  Addison,  73. 
Lamphere  v.  United  Workmen,    19, 

67,  251. 
Lamont  v.  Association,  159,  166,  178, 
219,  220a. 

v.   Grand  Lodge,    159,    178, 
212,  354. 
Landis  v.  Ins.  Co.,  270. 
Landman  v.  Entwistle,  82. 
Landrum  v.  Knowles,  211. 
Lane  v.  DeMets,  186,  188. 
Langdon  v.  Union   Mutual,  165,  322. 
Lantz  v.  Ins.  Co.,  273.  283,   298,   301, 

306. 
Lapierre  v.  L'Union,  285. 
Landenschlager  v.   Association,  214, 

322. 
Lavalle  v.  Societe,  53. 
Lawler  v.  Murphy,  333,  334,  337,  340. 
Lawrence  v.  Ins.  Co.,  156,  391,  397. 
Lawwill  v.  Lawwill,  189,  190. 
Lawyer  v.   Chipperly,  133. 
Lazenski  v.  Supreme  Lodge,  72,  258, 

279,  287,  294,  323,  325,  326. 
Leaf  v.  Leaf,  227. 
Leavitt  v.  Dunn,  189,  210. 
Lee  v.  Ardy,  174. 
v.  Dill,  197. 
v.  Lee,  209. 
Leech  v.  Harris,  39,  51,  60,  70,  76. 
Leffingwell  v.  Grand  Lodge,  271,  306. 
Lehman  v.  I.  O.  B.  B.,  291. 
Leigh  v.  Ins.  Co.,  270. 
Leman  v.  Ins.  Co. ,  377. 
Lemix  v.  The  Harmony  Society,  128. 
Lemon  v.  Ins.  Co.,  2il, 
Leonard  v.    Ins.   Co.,  215,  300,  301, 

306,  307. 
Leslie  v.  Lorrilard,  95. 
v.  Ins.  Co.,  299. 
Leuder's  Executor  v.  Ins.  Co.,  333, 

334,  340. 


TABLE    OF    CASES. 


XXIX 


[the  references  are  to  sections.] 


Levi  v.  Ins.  Co.,  365. 
Levy  v.  Taylor,  350. 
Lewis  v.  Ins.  Co.,  195,  298,  299,  301, 
419. 

v.  Tilton,  79.  81. 

v.  Watson,  133. 
Liggett  v.  Ladd,  88,  130. 
Lindguist  v.  Glines.  122. 
Lindsey  v.  Society,  95,  162a,  300,  303, 

'  342. 
Linnehan  v.  Sampson*  371. 
Liosenbigler  v.  Gourley,  167. 
Linz  v.  Ins.  Co.,  300. 
Little  v.  Ins.  Co..  320. 
Livingston  v.  Lynch,  124. 
Livingston  V.  Trinity  Church,  40. 
Lloyd  V.  Louring,  88. 
Lockwood  v.  Bank.  17,  108. 

V.  Bishop,  185,  284. 
Lockyear  v.  Offley,  275. 
Longheed  v.  Church,  134. 
Loos  v.  bis.  Co.,  190,  197,  200. 
Lorcher  v.  Supreme  Lodge,  138. 
Lord  v.  Dall,  195. 

v.  Moore,  209. 
Loring  v.  Loring.  184. 
Lothrop  V.  Ins.  Co.,  23,  260.  262. 
Loubat  v.  LeRoy,  61,  67,  76. 

v.  Union  Club,  47. 
Loughridge  v.  Association,  95,    297, 

298. 
Louisiana  Mutual  v.  Tweed,  368. 
Lovejoy  V.  Ins.  Co.,  327. 
Loveland  v.  Company,  4<)2. 
Lqvell  v.  Ins.  Co.,  238,  366,  368,  387. 
Lovick  r.  Association,  293. 
Low  v.  Ins.  Co.,  300. 
Lucas  i:  Case,  H4. 

V.  Thompson,  318. 
Ludlam  v.  Higbee,  127. 
Ludowiski  v.  Society.  53. 
Luhrs  v.  Luhrs,  223. 

r.  Supreme  Lodge,  231. 
Lumbard  v.  AJdrich,  17. 
Luthe«.  Ins.  Co.,  13,  96,  300. 
Lycoming  Ins.  Co.  v.  Barringer,  300. 
V.  .Mitchell.  151. 
r.   Ward.  246. 
LyOD  V.  Assurance  Co.,  402,    I  L6. 

v.  Ins.  Co., 270. 

r.  h'olt'e.  165,  202. 
Lyon  r.  Supreme  Assembly,  !i?.  291, 

800,  304,  306. 
Lyons  o,  Yerek,  189. 
Lysaght  v.  Association,  20,  75. 
Lyttleton  V.  Black  hum.  68,  70,  73. 


M 


McAlees  r.  Supieine  Sitting,  313. 
McCabe  >\  Goodfellow,  s?. 
v.  Society,  24. 


McCartee  v.  Chambers,  81. 
Mc(  arthv's  Appeal,  99,  128. 
McCarthy  v.  Ins.  Co.,  373,  374,  397. 
v.    Supreme    Lodge,     195, 
220,  237. 
McCleave  v.  Association,  138,  139. 
McClure  v.  Johnson,  136,  177,  217,237. 
McCone  v.  Coursen,  232. 
McConnell  v.  Ins.  Co. .  358. 
McCorkle  v.  Association.  95,  260,  297. 
McCoy  v.  Ins.  Co.,  13,  17,  97,  300. 
McCue  v.  County  of  Wapello,  99. 
McCullough  v.  Association,  144. 
McCully  v.  Ins.  Co.,  140. 
McDonald    v.    Ross-Lewin,    39,   249, 

289,  308. 
McDermott  v.  Centenial  Mutual,  179, 

185,  186,  201. 
McDonald  v.  SneUing,  398. 

V.  Supreme   Council,  287, 
293,  300. 
McDonnell  v.  Carr.  275. 
Mi  1)  .well  v.  Ackley,  18: 
McElwee  v.  Ins.  Co.,  200. 
.wcFadden  v.  Leeka.  79. 

v.  Murphy,  94,  128. 
McGinnis  v.  Watson,  133. 
McGlinchev  v.  Casualty  Co.,  133,  374, 

379,  393. 
McGlynn  v.  Post,  15.  90. 
McGowan  r.   Supreme   Council,  254, 

298,  304. 
McGuirei'.  Trustees.  132. 
McGunn  v.  Hamlin.  317. 
McGurkw.  Ins.  Co.,  407. 
McKane  v.  Adams.  30. 
McKee  v.  Ins.  Co.,  164. 
McKnight  v.  Association,  362. 
McLafferty  v.  Sweeney.  <>!). 
McLaughhn  v.  Ins.  Co.,  360. 
McLean  v.  Burbank,  382. 

r.   Ins.  Co.,  356. 

v.  McLean.  241. 
McLin  r.  Calvert.  209. 
McMahon  v.  Ins.  Co.,  270. 
V.  Kauhr.  85,  117. 
v.  Supreme  Council,   155, 
3I3.4(U. 
McMichael  V.  Kilmer.  356. 
McMurray  V.  Supreme  Lodge,  290. 
McXallv  V.   Ins.  CO.,    U6,    111*. 

McQuirk  v.  Mutual  Benefit,  300. 
Macheii  v.  Mayor.  63. 
Mackinnon  v.  Ins.  Co.,  274. 
Mactier  v.  Frith.  L39. 
Mace  r.  Cushman,  189,  190. 
Madeira  o.   Merchant's   Mutual.   285, 

290. 
Magaw  v.  Field,  is^. 
Magee  v.  Clayton  Lodge,  310. 
Magie  v.  <  !hurch,  185. 
Maginnis  v.  Association,  266,  290. 


XXX 


TABLE    OF    CASES. 


[the  references  are  to  sections.] 


Maguire's  Estate,  88 
Maguire  v.  Ins.  Co. ,  356. 
Mahaney  v.  Association,  300. 
Mahert?.  Ins.  Co.,  152,  326. 
Mair  v.  Assurance.  Co.,  372. 
Mallory  v.  Ins.  Co.,  95,  156,  297,  364, 

377.  379.  380,  388,  392,  397. 
Malone  v.  Majors,  209. 
Manby  v.  Society,  73. 
Mandegov,  Lifa  Association, 299,  333. 
Maneely  v.  Knights,  160. 
Manhattan   Ins.    Co.    v,    Broughton, 

378. 
Manning  v.  Ancient   Order,  219,  221, 
222,  227,  348,  354. 
V.  Hub,  18,  55,  61. 
Mannix  v.  Purcell,  133. 
Manson   v.    Grand   Lodge,    143,  145, 

270,  293,  323. 
Manufacturers'   Co.  v.  Dorgan,   367, 

i  91,  392,  397,  399. 
Mapstrick  v.  Range,  19. 
Marble  v.  Worcester.  398. 
Marblehead   Ins.  v.  Underwood,  250. 
Marck  v.  Supreme  Lodge,  50,  270,  292. 
Marcus  v.  Ins.  Co.,  167,  169,  214,  224, 

301. 
Markey  v.  Ins.  Co.,  138,  142. 
Marsh  v.  Burroughs,  252. 

v.  Huron  College,  63. 
v.  Ins.  Co.,  270. 
v.  Lazenby,  194. 
v.  Supreme  Council,  159,  162, 
194.  105.  223.  226.  230. 
Marshall  v.  Accident  Co.,  294. 
Marstonr.  Ins.  Co.,  298. 
Martin  v.  Mtna  Ins.  Co.,  347. 
Martin  v.  Association,   334,  340,  393, 
398. 
v.  Indemnity  Co.,  398. 
V.  Ins.  Co.,  186,   320,  370,  374, 

393. 
v.  Stubbings,  13,  159,  160, 166, 
178,  214,  219. 
Martino  v.  Ins.  Co.,  17. 
Martz  v.  Ins.  Co..  327. 
Marvin  v.  Universal  Life,  283. 
Marx  v.  Ins.  Co.,  366,  383,  386. 
Mary  v.  Michael,  238. 
Maryland  Societv  v.  Clendenin,  212, 

218,  238. 
Mason  v.  Finch.  15,  134. 
Masons  v.  Winthrop,  3. 
Masonic  Association  v.  Bunch,  160, 

212,  214,  227,  236. 
Masonic  Ins.  Co.  v.  Miller,  179. 
Masonic  Mutual  v.  Beck,  300,  302. 

v.     Burkhart.    136, 

212.  213,  214. 

213,  322. 

v.    McAulev,    181, 
176,202. 


Mass.  Forresters  v.  Callaghan,  159, 

162,  242. 
Mass.  Mutual  v.   Robinson,  198,  347, 

360. 
Massey  v.  Association,  159. 

v.  Ins.  Co.,  152. 
Master  Stevedores  v.  Walsh,  19. 
Matkin  v.  Supreme  Lodge,  23,  139. 
Matoon  v.  Wentworth,  88,  315. 
Matt  v.  Society,  13,  155,  282,'  300,  302. 

v.  Association,  321. 
Matter  of  Booth.  270. 
Matthews  v.  Huntlev,  157. 

v.  Sheehan,  348,  350. 
V.  Supervisors,  99. 
Maury  v.  Talmadge,  382 . 
Mayer  v.  Attorney  General,  122,  123. 
v.  Equitable  Reserve.  215,  219, 

224.  2.10,  300,  338,  343. 
v.  Ins.  Co..  298,  299. 
Mayfield  v.  Moore,  99. 
Mayor  v.  Solomon's  Lodge,  130. 
Maynard  v.  Yanderworker,  227,  325. 
Mead  v.  Davison,  152. 
v.  Ins.  Co.,  152. 
Meagher  v.  Union,  326. 
Medical  Society    v.   Weatherby,   56, 

287. 
Meier  v.  Meier.  167,  2S4. 
Mellen  v.  Ins.  Co.,  416. 
Mellows  v.  Mellows.    218,  220,    222, 

222a,  348.  354. 
Menard  v.  Hood,  54. 

r.  Society.  301,  302. 
Menneilev  V.  Assurance  Corporation, 

394. 
Mentz  v.  Ins.  Co.,  313. 
Merrett  v.  Accident  Association,  156, 

377. 
Merrill  v.  Ins.  Co..  170. 
Merrill  Lodge  v.  Ellsworth,  129. 
Merriman    v.   Association,  257,  260, 

261. 
Merritt  v.  Earle,  109. 

v.  Ins.  Co..  156. 
Metallic  Compression  Casting  Co.  v. 

Fitchburg Railroad  Co.,  398. 
Methodist  Church  v.  Wood,  133. 
Metropolitan   Association    v.    Wind- 
over,  26,  108,    305,   326,   331, 

333,334.  340. 
Metropolitan  ( 'lub  v.  Simmons,  75,  76. 
Metropolitan  Ins.  Co.  v.  McGrath,301. 
Meurer  v.  Association.  12. 
Meyer  v.  Ins.  Co.,  279,  298. 

v.  Knickerbocker,  280,  299. 
v.  Krohn,  261. 
Mevers  v.  Ass'n,  334. 

v.  Ins.  Co.,  140. 
Michigan  Mutual  v.  Custer,  283. 

v.  Nangle,  156,  393. 
v.  Rolfe,  96,  158. 


TABLE    OF   CASES. 


XXXI 


[the  references  are  to  sections.] 


Middlesex  Co.  v.  Swan.  1 86. 
Miesell  v.  Ins.  Co.,  279,  295,  381. 
Millard  v.  Supreme  Council,  155,  293, 

302,  305,  323. 
Miller  v.  Association,  18,  97.  137,  365. 
v.  Assurance  Ass'n,  17<>. 
v.  Assurance  Co.,  136. 
v.  Georgia  Masonic,  333.  344. 
V.  Ins.  Co.,    151,  300,  369,  383, 

412,  413. 
v.  Lebanon  Lodge,  100. 
v .  Union  Central.  306. 
Mills  v.  Rebstock,  155,156,  323. 
Milner  v.  Bowman,  165,  173.214. 
Milwaukee  R.  W.  Co.  v.  Kellogg,  368, 

397. 
Miner  v.  Association.  268,  285,  361. 
v.  Michigan  Mutual,  130,  268. 
Minneapolis  v.  Libby,  32. 
Misselhorn  v.  Association,  138,  139, 

142. 
Missouri  Ins.  Co.  v.  Sturges.  165. 
Missouri  Valley  v.  Dunklee,  270. 
Mitchell  v.  Grand  Lodge,  159. 

v.  Lycoming  Mutual,  18. 
Mobile  Life  v.  Morris,  325. 
Modern  Woodman  v.   Jameson,  292, 

300,  305. 
Mogol  v.  McGregor,  19. 
Mohawk  Lodge  v.    Went  worth,   49, 

316. 
Moisev.  Mutual  Reserve,  169. 
Monmouth  Ins.  Co.  v.  Lowell,  250. 
Montgomery,  etc.,  R.  R.  Co.    v.  Bor- 
ing, 382. 
Montgomery  Ins.  Co.  v.  Milner,  27. 
Moore  v.  Bank,  19. 
More  v.  Bennett,  19. 
Morel  v.  Ins.  Co.,  365. 

v.  Society,  31,39. 
Morning   Star    Lodge   I.  O.  O.   F.  v. 

Hayslip,  Treasurer,  130. 
Morris  v.  Lone  Star  ( Chapter,  130. 

v.  Piatt,  364. 
Morris  Coal  Co.  v.  Barclay,  19. 
Morrison    v.  Odd  Fellows.  17.  19.  26. 
27,95.  97.  136,  213,  300. 
v.  Ins.  Co.,  300. 
Morton  r.  Smith,  127. 
Mouler  w.  bis.  Co.,  1 43. 
Movers  v.  Smedley,  51, 
Mowatt  v.  i  'arow,'  188. 
Mowry  v.  Ins.  Co.,  349,  407. 
Mueller  v.  Association,  261,  262,  269. 
Mullally  v.  Irish  So.iety,  318. 
Muller  r.  Germania,  326. 
Mullin  v.  Ins.  Co.,  399. 
Mulling  v.  Thompson,  178. 
Mulrov  V.  Ins.  Co.,  97. 

v.  Knights,  155,  257. 
v.  Supreme  Lodgo,39,  47,  60 
294.  323,  353. 


Munhall  V.  Daly,  202. 
Munn  v.  Burgess,  100. 
Murphy  v.  BidweU,  77. 
v.  Harvey.  209. 
Murray  V.  Association,  283,  305,  307. 
v.  Buckley.  282. 
v.  N.  Y.  Life,  157. 
r.  Walker.  79,  85. 
Mutual  Aidf.  Miller,  201,  348. 
v.  Paine,  12. 
Association  v.  Kayser,  320. 
v.  Tuggle,  334. 
Benefit  v.  Bank,  174. 
v.  Coats,  304. 
v.  Daviess,  399. 
?'.  French,  285. 
v.  Hoyt,  13,  158. 
v.  Marye,  9. 
v.  Newton,  156,  326. 
v.  Ruse,  275,  297,  299. 
Endowment  v.  Essender,  268, 

333. 
Ins.  Co.  v.  Bratt,  17. 
Ins.  Co.  v.  Houghton,  252. 
V.  Miller,  299. 
v.  Paige,  251 . 
Lifer.  Allen.  165,  351. 
v.  Ins.  Co..  298. 
v.  Terry,  378. 
Protection  v.  Laury,  306. 
Relief  v.  Billan,  269.  281. 
Reserve  v.   Hamlin,  262,  285, 
294,  325. 
Myers  v.  TJ.  S.,  102. 

v.  Ins.  Co.,  148. 
Myres  V.  Myres,  209. 


N 


Nacbtrieb  v.    The  Harmony  Settle- 
ment. 128. 
Nagelr.  Glasburger,  301. 
Nally  r.  Nally,  214,  223.  227. 
Nance  v.  Bushy.  132.  133. 
Nash  r.  Page,  19. 

National  Accident  Soc.  r.  Tavlor,  408, 
409. 
Association  r.Granman,  326, 
397. 
v.Heckman,333, 

410. 
v.  Jackson.  270. 
278-,  370, 408. 
v.  Kirgin,    219, 
223. 
Bank  r.  Ins.  Co..  113. 
Ins.  Co.  V.  Crane.  152. 
V.    Ha  lev,  211. 
V.  Minch.  346,    358. 
r.  Pin-rev.  354. 
v.  Webster,  365. 
National  Mutual  v,  Gouser,  158. 


xxxn 


TABLE    OF    CASES. 


[the  refreencfs 

National  Mutual  v.  Jones,    95,     297, 
298,  305. 
v.  Lupoid,  167,  169, 
219,    222,    224, 
284. 
V.  Millar,  258,    262. 
265,  296,  298. 
Navigation  Co.  v.  Moore,  175. 
Neafie  v.   Accident  Indemnity  Co., 

404,  409. 
Neill  v.  Ins.  Co.,  157,  270,368. 
v.  Order  of  Friends,  403. 
Nelson  v.  Davis,  152. 

v.  Ins.  Co.,  365. 
Ne,skern  v.  Association,  144,  329,  339. 
Newcomb  v.  Ins.  Co.,  174. 
Newell  v.  Borden,  79. 
N.  E.  Ins.  Co.  v.  Robinson,  139. 
New  England  Mutual  v.   Butler,  136. 
New  Era  Life  v.  Rositer,  32. 
New  Home  Life  Ass'n  v.  Hagler,  333, 

334,  335. 
Newling  v.  Francis,  94. 
Newman    v.    Association,    153,    178, 
300.    331,    334,  341,  342,  360, 
390. 
Newton  v.  Ins.  Co.,  156. 
N.  Y.  Ace.  Co.  v.  Clayton,  157,  414. 
N.  Y.  Ins.  Co.  v.  Insurance  Co.,  416. 
N.  Y.  Life  v.  Statham,  280. 
Niagara  Ins.  Co.  v.  Seammon,  143. 
Niccolls  v.  Rugg.  133. 
Niven  v.Spickerman,  85. 
Nix  v.  Donovan,  227,  325. 
Nolan  v.  Railway  Co. ,  366. 
Norristown  v.  Ins.  Co.,  153. 
N.  A.  Ins.  Co.  v.  Burroughs,  326.  364, 

374,  397,  409,  413,  417. 
N.  A.  L.  Ins.  Co.  v.  Wilson,  201,  211, 

282. 
Northampton    Ins.    Co.    v.    Stewart, 

264,  269. 
Northampton  Ins.  Co.'  v.  Tuttle,  139, 

141. 
North  Berwick  v.  Ins.  Co. ,  300. 
North  Brit.  Ins.  Co.  v.  Stewart,  358. 
Northup  v.  Assurance  Co. ,  384. 
N.  W.  American  v.  Amerman,  300. 
N.  W.  Association  v.  Bloom,  146. 

v.  Hall,  322,  333. 

v.  Hand,  146. 

v.  Schauss ,     260 , 

287, 360. 
v.  Wanner,  26,  27, 
136,  331,  333. 
N.  W.  Ins.  Co.  v.  Hazlett,  143,  156. 
Northwestern  Masonic  v.  Jones,  178, 

189. 
N.  W.  Mutual  v.  Elliott,  141,  358. 

v.  Roth,  348. 
Norton  v.  Ins.  Co.,  140,  148. 
Norwich  Union  v.  Girton,  356. 


ARE  TO   SECTIONS.] 

Noyes  v.  Ins.  Co.,  148. 

v.  Marsh,  317. 
Nurney  v.  Ins.  Co.,  317a. 
Nute  v.  Ins.  Co.,  317,  321. 

O 

Oates  v.    Supreme  Court,  276,   280, 

286. 
O'Brien  v.  Society,  331,  333,  337,  339, 

340,  344,  416. 
Och  v.  Ins.  Co.,  265,  270. 
Odd  Fellows  v.  Hook,  32,  61,  132. 

Mutual  v.  Sweetser,  298. 
Odiorne  v.  Insurance  Co.,  411. 
O'Donaghue  v.  McGovern,  84. 
O'Grady  V,  Knights,  155,  272. 
O'Uara  v.  Stack,  61. 
Ohning  v.  City  of  Evansville,  102. 
Old  Dominion  v.  McKenna,  19. 
Old  Wavne  Ass'n  v.  Nordbv,  420. 
Olery  v.  Brown,  47,  76,  111. 
Oliver  v.  Am.  Legion  of  Honor,  138, 

140. 
v.  Hopkins,  111. 
Olmstead  v.   Farmers'    Mutual,    95, 

258,  388,  289,  307. 
Olmstead  v.  Keys,  35,  165. 
Olmstead   v.    Masonic    Mutual,    218, 

220,  237. 
O'Neill  v.  Mass.  Association,  326. 
Order  i\  Koster,  164. 

of  Alliance  v.  State,  3,  119. 

Mutual  Companions  v.  Griest, 
177,  237.  347. 
Oriental  Ins.  Co.  v.  Glancey,  333,  334, 

335. 
Ormond  v.  Life  Association,  139,  246. 
Osceola  Tribe  r.  Schmidt,  49,  56.  316. 
Ottei'bein  V.  Ins.  Co.,  142. 
Otto  v.  Union,  39,  45,  49,  51,  70,  73. 
Overbeck  v.  Overbeck,  180. 
Overton  v.  Ins.  Co.,  157. 
Owen  v.  Whitaker,  93. 
Owens  v.  Company,  23. 


Pacer.  Pace.  141.  200.  211. 
Pacific  Mutual  v.  Guse,  250,  255. 

v.  Snowden,  370,  408, 
414. 
Pacific  Mutual  v.  Williams,  270. 
Paden  v.  Briscoe,  207. 
Paget'.  Burnstine,  348. 
Paine  v.  Ins.  Co.,  140. 
v.  Prentiss,  196. 
Painter  v.  Association,  18,  279,  301, 

305. 
Palmer  v.  Accident  Association,  150. 
v.  Horn,  188. 
v.  Merrill,  165,  167,  173. 


TABLE    OF   CASES. 


XXX111 


[the  references    are  to  SECTIONS  ] 


Palmer  v.  Phoenix  Mutual,  270,  416. 

v.  Welch,  158,    177,  195. 
Palmetto  Lodge  v.  Hubhell,  34. 
Park  v.  Spaukling,  83,  87. 

v.  Welch,  158,  176, 177,  231. 
Parsons  v.  Bignold,  152. 
Partridge  v .  Badger,  46,  93. 
Passenger  Conductors  v.  Birnbaum, 

250. 
Patrick  v.  Ins.  Co.,  156,  415,416,  419. 
Patten  v.  Association,  304 
Paul  v.  Keystone  Lodge,  86. 

v.  Travelers'   Ins.  Co.,  364,  374, 
379.  393,  394. 
Payn  v.  Relief  Society,  260,  268. 
Payne  v.  Snow,  80. 
Pearce  v.  Piper,  88,  116, 117. 
Pearl  v.  Harris,  317. 
Peasley  v.  McFaddon,  152. 
Peck  v.   Accident  Association,  333, 

380,  388,  397,  398. 
Peet  v.  Great  Camp,  276,  286. 
Pellazzinoi'.  Society,  24,  144. 
Pence  v.  Makepeace,  211. 
Pendleton  v.  Ins.  Co.,  245,  289. 
Penfield  v.  Skinner,  100,  115,  126. 
Penfold  v.  Ins.  Co.,  156,  393. 
Pennington  v.  Ins.  Co.,  379,  401. 
Penn.  Mutual  v.  Keach,  299,  307. 

v.  Wiler,  323. 
Pennsylvania  v.  Ins.  Co.,  264. 
Pennsylvania  R.   R.    Co.    v.   White. 

382.  . 
Pennvpacker  v.  Ins,  Co..  416. 
Pentz  v.  Ins.  Co.,  23. 
People  v.  American  Institute,  45. 
People  v.  Association,  44,  63,  65,  257, 
261,  330. 
v.  Batchelor,  104. 
v.  Benevolent  Society,  56,  61, 

155. 
v.  Chicago  Board  of  Trade,  23, 

39.  55,  110. 
v.  Club,  63. 
v.  Crossley,  93, 
v.  Dulanv.  330. 
v.  Fire  Department,  24. 
v.  Fisher,  19. 
V.  Gas  Trust.  11. 
v.  German  Church,  40,  76. 
v.  Golden  Rule,9. 
v.  Higgins,  85, 
v.  Hosmer,  93. 
v.   Masonic  Association,  113, 

361. 
v.  Medical  Society,  19,  23,  29, 

36,55,  56,  60,289. 
v.  Mutual  Life.  279. 
v.  N.  Y.  Association,  39. 
v.  N.  Y.  Cotton  Exchange,  60. 
V.  Protective   Union,  47,    63, 

64,  65,  287. 
8 


People  v.  Railroad  Co.,  93. 
v.  Richards,  19. 
v.  Runkel.  94. 
v.  Society,  8,  17,  20,  29,45,  55, 

59,  61,  109,  285. 
v.  Steele,  135. 

v.  Supreme  Council,  56,  257. 
v.  Throop,  17,  23. 
v.  Tu thill,  33. 

v.   Union,  45,  47,  63,  64,  65, 
287. 
People's  Ins.  Co.  v.   Allen,  251,252, 

342. 
People's  Mutual  v.  Babbitt,  250. 
v.  Werner,  362. 
Peoria  Ins.  Co.  v.  Lewis.  360.  416. 
Perine  v.  Grand  Lodge,  302,  360. 
Perrv  v.  Provident  Life.  275. 
Perley  v.  Railroad  Co.,  397,  398. 
Perrins  v.  Society,  407. 
Perry  v.  Provident  Life,  406. 
Peter  v.  Carter,  100,  126. 
Petty  v.  Willson,  234,  236. 
Peyre  v.  Society,  53. 
Pfeiffer  v.  Encampment,  32,  62. 
Pfeiffer  v.  Weishaupt,  55,  319. 
Pfister  v.  Gerwig,  18. 
Phadenhauer  v.  Ins.  Co.,  156. 
Phelan  v.  Ins.  Co.,  258,  261,  388. 
Phipps  v.  Jones,  88. 
Phillips  v.  Aurora  Lodge,  95. 
v.  Carpenter,  190. 
v.  Ins.  Co.,  156.  416. 
Phoenix  Ins.  Co.  v.  Baker,  280. 
Phoenix  Ins.  Co.  v.  Dunham,  164. 
v.  Slaughter.  300. 
Phoenix  Mutual  v.  Bailey,  351. 
v.  Doster,  299. 
v.  Raddin,  300. 
Pickels  v.  Ins.  Co.,  416. 
Pickett  v.  Ins.  Co.,  374,  393. 
Piedmont   Ins.    Co.    v.  Ewing,    138, 
332. 
v.  Ray,  270. 
Pierce  v.  Ins.  Co.,  156,  169. 

p.  Wood,  356. 
Piggott  v.  Thompson,  1-8. 
Pilcher  v.  Ins.  Co..  211. 
Pingrie  r.  Jones.  234a. 
ripe  r.  Bateman,  88. 
Piper  '■.  Ace.  Association,  387. 
Pitcher    r.    Board   of    Trade.   54,   55. 

67. 
Planters  Ins.  Co.  r.  Bank.  220. 

r.  Rowland,  144. 
Pollock  v.  Accident  Ass'n,  374, 393. 
Pomeroy  v.  Ins.  Co..  141. 
Porter  y.  Robinson,  104. 
Potter  v.  Ins.  Co..  :!.")(). 
Poultnev   v.  Bachman,  18,  24.  47,  49. 

"ill.  313.  317. 
Powell  i:  Abbott.  14,  45. 


XXXI V 


TABLE   OF    CASES. 


[the  references  are  to  sections.] 


Prall  v.  Society,  140,  148. 
Prentice  v.  Ins.  Co.,  419. 
Presbvterian  Fund  v.  Allen.  212,  213, 

214,  216. 
Presbyterian  Congregation  v.  John- 
ston, 134. 
Preuster  v.  Supreme  Council,  300. 
Price  V.  Ins.  Co.,  34T. 
Price  r.  Supreme  Lodge,  19,  165,  167. 
Prickett  v.  Wells.  132. 
Primeau  V.  Association.  270. 
Pfitchard  v.  Assurance  Society,  273, 

275. 
Pritchett  v.  Schafer.  86. 
Procter  v.  Procter,  184. 
Protection  Life  v.  Foote,  95,  136,  270. 
V.  Palmer,   258,   262, 
263.205.272.274. 
275,  286. 
Provident  Life  v.  Baura,  417. 

v.  Fennell,  278,  407. 

v.    Martin,    364.    365. 

367,  407,  409.  416. 

Prudential  Ins.  Co.  v.  Edmunds,  326. 

Pulford  v.  Fire   Department,  15,  19, 

58,  60,  136.  250,  285. 
Putnam  v.  Ins.  Co.,  211. 

Q 

Queen  Ins.  Co.  r.  Young,  283. 

R 

Rabb  r.  Reed,  117.  126. 
Raikes  r.  Ward.  184. 
Railroad  Co.  v.  Aspell,  382. 
r.  Quigley,  84, 
Railton  v.  Mathews,  101. 
Railwav  Association  v.  Burwell.  381, 

"416. 
Pailway   Ass'n   v.  Loomis,   176,  315, 
316,  320. 
v.  Robinson,  136,  315, 
316,  317. 
Railway  Co.  v.  Conybeare,  84. 
Rainsbarger  v.  Association,  330,  331. 
Rand  V.  Association.  20. 
Rathbun  i\  Snow,  95. 
Raub  v.  Ins.  Co..  270. 

v.  Relief  Association,  168,  235. 
Rawls  v.  Ins.  Co..  211,  325,  351. 
Rawson  v.  Jones,  197. 
v.  Lyons,  152. 
v.  Rawson,  189,  210. 
Ray  v.  Powers,  85. 
Red  Jacket  Tribe  v.  Gibson,  100. 
Redway  v.  Sweeting,  80. 
Reed  v.  Ins.  Co.,  Ill,  313. 
Reeve  v.  Parkins,  116,  117. 
Refining  Co.  r.  Ins.  Co..  320. 
Reform  Church  v.  Theological  Sem- 
inary, 133. 


Regina  v.  Shepherd,  19. 

Reichard  v.  Ins.  Co.,  317,  321. 

r  ichenbach  v.  Ellerbe,  260,  324. 

Reid  i\  Ins.  Co.,  325. 

Reimsdyk  v.  Kane,  141. 

Relief  Association  v.  McAuley.  178, 

197.  331. 
Remington  v.  Congdon.  84. 
Renk  v.  Herman    Lodge,    218,   220, 

222a,  237. 
Rensenhouse  v.  Seeley,  3. 
Rex  v.  Ashwell,  23.  28. 

V.  Faversham,  45,  66. 
V.  Liverpool,  104. 
v.  Richardson,  37. 
v.  Sutton,  59. 
v.  Twyning,  344. 
Reyndes  v.  French,  356. 
Reynolds   v.    Accident    Association. 
370,  374,  380,  419. 
v.  Ins.  Co.,   391,   392,  393, 
397. 
Rhodes  v.  Ins.  Co..  140.  402. 
Rice  v.  Society.  304,  305. 
Richards  v.  Association,  304. 

v.  Ins.  Co..  364,  381,  388. 
Richards  v.  Miller,  189,  210. 
Richardson  U.Hastings,  117. 
Richardson  u,  Ins.  Co.,  394. 

v.  Society.  28,  105,  106. 
Richard  Thompson  Co.  v.  Brook,  99. 
Richards  v.  Ins.  Co  ,  298,  380. 
Richmond   v.  Johnson,  136,  202,212. 

V.  Ju.lv,  79.  80. 
Ricker  y.  Ins.  Co.,  187,  211. 
Riddlesbarger  v.  Ins.  Co.,  320. 
Ridgely  v.  Dobson,  79. 
Rigbyr.  Connol,  19^  70,  113. 
Riley  v.  Ins.  Co.,  156,  176,  182,  202, 

p.  Rilev.  177. 
Rindge  r.  Ins.  Co.,  13,  96,  158,  176, 

347. 
Ring  v.  Association,  331. 
Riplev  v.    Assurance    Co.,  364,  375, 

384. 
Rislev's  Succession,  169. 
Rittler  v.  Smith.  349,  351. 
Rix  v.  Ins.  Co.,  415. 
Road  Co.  v.  Townsend,  32. 
Robbins  v.  Waldo  Lodge,  128. 
Roberts  v.  Roberts,  161,  184. 
Robertson  v.  Ins.  Co.,  297,  306. 
Robinson  v.  Duvall,  188,  197,  201. 
v.  Robinson,  79. 
v.  Supreme  Council,  90. 
v.  Society,  313. 
v.  Templar  Lodge,  316. 
v.  Yates  City  Lodge.  45.  247. 
Robyn  r.  Supreme  Sitting,  344. 
Rockhold  v.  Association,  176. 
v.  Society,  13,  151. 
Rockwell  v.  Ins.  Co.,  304. 


TABLE    OF    CASES. 


XXXV 


[the  references  are  to  sections.] 


Rody  v.  Ins.  Co.,  373,  374. 
Roeding  v.  Sons  of  Moses,  279. 
Roehler  v.  Society,  60. 
Roger  Williams  Ins.   Co.  v.  Carring- 

ton,  169,  171. 
Rogers  v.  Brenton,  19. 

v.  Capitol  Life,  272,  274,  275, 

286. 
v.  Ins.  Co.,  138,  385. 
v.  Jones,  17. 
Rollins  v.   McHatton,  218."  220a,  223. 
Ronald  v.  Association,  3U3. 
Rood  v.  Association,  32,   39,  49,   290, 

316. 
Roper  v.  Burke,  115,  121, 127. 

v.  Sangamon  Lodge,  101,  102. 
Rorke  v.  Russell.  76,  84. 
Rosenberger  v.  Ins.  Co.,  6,  7,  250,  255. 
Rosenthal  v.  Walker,  261. 
Roshi's  Appeal,  118,  133. 
Ross  v.  Ins.  Co. ,  262. 
Rosswell  v.  Aid  Union,  251,  302,  305, 

342. 
Roszell  v.  Roszell,  152. 
Rothchild  v.  Ins.  Co.,  157. 
Rothweiler  v.  Ryan,  202. 
Rousseau  v.  Lambert,  152. 
Royal  Templars  v.   Curd,    155,  288, 

290. 
Rudolph  v.  Southern  League,  15,  93, 

112. 
Ruse  v.  Ins.  Co.,  275,  297,  299. 
Russell  v.  Russell,  188. 
Rutland  V.  Thrall.  252. 
Ryan  v.  Ward,  355. 

v.  World  Mutual,  301,  307. 


S 


Sabin  v.  Grand  Lodge,  Phinney,  159, 
212,  227,  228. 
v.  National  Union,  156. 
St.  Mary's  Ass'n   v.   Lynch,  100,  104, 

118.  . 
Sale  v.  Baptist  Church,  40. 
Kalentine  v.  Ins.  Co.,  156. 
Salter  v.  Burt.  296. 
Saltonstall  v.  Saunders,  130. 
Sande  v.  Grove,  269. 
Sandford  v.  Association,  407. 

r.  Ins.  Co..  140. 
Sands  v.  Hill,  2:.  1.  357. 

v.  Lyon.  296. 
Sanford  v.  Association,  285. 

v.  Ins.  Co.,  365. 
Sanger  v.  Rothschild,  218,  240,  242. 

v.  Upton,  78. 
Sargeant  YVhitakn's  Case,  66. 

r.  Supreme  Lodge,  158. 
Sargent  v.  Webster,  104. 
Saunders  v.  Robinson,  398. 
Saveland  v.  Fidelity  Co.,  402. 


Sawtelle  v.  Assurance  Co.,  366,  367> 

383. 
Sawyer  v.  Baldwin,  133. 

v.   United     States   Casualty 
Co.,  403. 
Sayre  v.  Association,  19. 
Schassberger  v.  Staendel,  34. 
Schetferv.  Ins.  Co.,  156. 

v.  Railroad  Co.,  368,  397,  398. 
Scheiderer  v.  Ins.  Co.,  417. 
Schenck  v.  Ins.  Co.,  416. 
Scheu  v.  Grand  Lodge,  276,  288. 
Scheufler  v.  Grand   Lodge,    12,   286, 

287,  289. 
Schillinger  v.  Boes,  234a,  328. 
Schmidt    v.    Association,    212,    214, 
223. 
v.  German  Mutual,  257, 264, 

269. 
v.  Gunther,  87. 
v.  Lodge,  48a. 
v.  Modern  Woodmen,  298, 
306. 
Schneider  v.  Ins.    Co..   185,  364,  365, 

367,  369,  378,  382. 
Schnook  v.  Sons  of  Benjamin.  179. 
Schonfield    v.   Turner,  19,  164,    165, 

190,  194,  350. 
Schradi  v.  Dornfeld,  132,  133. 
Schweikeru  Husser,  132. 
Schreiner  v.  High  Court,  388. 
Schryver  v.  Columbia  Lodge,  313. 
Schultz  v.  Ins.  Co.,  156. 
Schunck  v.  Fond,  3,  136,  276,  285. 
Schwartz  v.  Ins.  Co.,  138. 
Schwarz  v.  Ins.  Co.,  298. 
Schwarzbach  v.    Protective  Union, 

300,  325,  353. 
Schweiger  v.  Society,  39,  59. 
Scodding  v.  Lorant,  104. 
Scott  v.  Avery,  49,  317. 

v.  Dickson,  167,  173,  229. 
v.  Provident  Mutual,  153,  232. 
v.  Scott,  237. 
Screwmen's  Association  v.   Benson, 

111. 
Scriber  y.  Rapp,  128. 
Seamans  v.  N.  W.  Mutual,  299. 
Stitzinger  v.   New  Era  Association, 

362. 
Semmes  v.  Ins.  Co.,  320. 
Senser  v.  Bower.  344. 
Servatius  v.  Pichel,  84. 
Snvoss  v.  Society,  303. 
Saving  v.  Gale,  356. 
Seyton  v.  Satterthwaite,  209. 
Shader  v.  Assurance  Co.,  389. 
Shaferv.  Ins.  Co..  399. 
Shatter  r.  Ins.  Co.,  :!?2. 

v.  Spangler,  :siit. 
Shamrock     Benevolent     Society    v. 

Drum,  183. 


XXXVI 


TABLE   OF   CASES. 


[the  referenc  es  are  to  sections.] 


Shank  v.  Society,  156. 
Sharler  v.  Assurance  Co. ,  389. 
Shattuck  v.  Ins.  Co.,  139. 
Sharpe  v.  Association,  399. 
Shaw  v.  Robberds,  365. 
Shay  v.  Society,  305,  307. 

v.  Association,    176,    251,    260, 
302,  304. 
Sheancn  v.  Insurance  Co.,  356,  398, 

400,  404. 
Sheehy  v.  Blake,  79. 
Sheldon  v.  Ins.  Co.,  139,  140,  270,  278. 
Sherman  v.  Commonwealth,  3. 

v .  Sherman,  188. 
Sherry  v.  Union,  20,  23,  286,  322. 
'Shillings.  Ins.  Co.,  370,  391. 
ShurtleflE  v.  Stevens,  84. 
Sibley  v.  Carteret,  287. 
Siebert  v.  Chosen  Friends,  266,  323. 
Silvers  v.  Association,  .190,  202,  210, 

333,  340. 
Simcoke  v.  Grand  Lodge,  196,  219. 
Simmons  v.  Society,  63. 
Simpson  v.  Ins.  Co.,  272,  273,  275. 
Sims  v.  Ins.  Co.,  415. 
Sinclair  v.  Assurance  Co.,  364. 

v.  Ins.  Co.,  375. 
Sineral  V.  Dubuque  Mutual,  136. 
Sizer  v.  Daniels,  81. 
Skilbeck  v.  Garbeck,  260. 
Skillings  v.  Association,  162,  195. 
Skilton  v.  Webster,  133,  135. 
Slaughterhouse  Cases,  19. 
Slee  v.  Bloom,  119. 
Smith  v.  Association,  155,  317a,  334, 
336.  341. 
v.  Ball,  Receiver,  308. 
v.  Bown,  249. 
v.  Campbell,  196. 
v.  Covenant  Mutual.  178. 
v.  Ins.  Co.,  198,  297,  300,358, 

398,  416,  419. 
v.  Knights  Fr.  Mathew,  290. 
v.  Law,  104. 
v.  Lewis,  353. 
v.  National  Benefit  Society, 

227. 
v.  Nelson,  28,  133. 
v.  Pedigo,  133. 
v.  People,  19. 
v.  Pinch,  13,  162,  300. 
v.  Pinney,  100,  348. 
v.  Smith,  120,  128,  353. 
v.  Society,  156,  310,  325. 
v.  Swormstedt,  133. 
Smyth  v.  Darley,  104. 
Snellr.  Ins.  Co.,  152. 
Snow  v.  Wheeler,  19,  100. 
Society  v.  Backer,  53. 

v.  Commonwealth,  55, 59, 109. 

v.  Fell,  19. 

v.  McVey,  227. 


Society  v.  Meyer,  39. 

v.  Weatherly,  104. 
Somers  v.  Protective  Union,  419. 
Sooy  ads.  The  State,  101. 
Sowise  v.  Marshall,  88. 
Southard  v.  Assurance  Co.,  373,  374, 

393,  397. 
Southern  Ins.  Co.  v.  Kempton,  139. 
Life  v.  Wilkinson,    300. 
Mutual  v.  Montague,  297. 
S.  W.  Mutual  v.  Swenson,  333,  336, 

340. 
Spare  v.  Ins.  Co.,  152,  320. 
Spaulding  v.  Conant,  152. 
Spear  v.  Robinson,  196. 
Spencer  v.  Ins.  Co. ,  326. 
Sperry's  Appeal,  55,  67. 
Spillman  v.  Supreme  Council,  45,  55. 
Spitz  v.  Association,  301,  302. 
Splawn  v.  Chew,   136,  143,  212,  219, 
220,  221,  222,  222a,  227,  333, 
354. 
Spoeri  v.  Ins.  Co.,  272,  286,  298. 
Springhead  v.  Reily,  19. 
Springmeier  v.  Association,  32,  300. 
Spry  v.  Williams,  161,  187. 
St.  Anthony  Co.  v.  Merriman,  152. 
St.  Clair  Society  v.   Flietsam,    144, 

173,  214. 
St.  John  v.  Ins.  Co.,  167,  351. 
St.  John's  Ass'n  v.  Buckly,  238. 
St.  Louis  Ins.  Co.  v.  Glasgow,  365. 
v.  Kyle,  416,  419. 
St.  Mary's  Soc.  v.  Burford,  18,  23. 
St.  Patrick's  Society  v.  McVey,  24. 
St.  Paul  Ins.  Co.  v.  McGregor,  320. 
Stacy  v.  Randall,  146. 
Stadler  v.  District  Grand  Lodge,  88, 

100,  113,  115,  126. 
Stamm  v.  Association,  121,  309. 
Standard  Life  v.  Jones,  386,  389,  411. 
v.  Martin,  183,184,399, 

411. 
V.    Thomas,    375,    397, 
398. 
Standen  v.  Standen,  238. 
Stanley  v.    N.  W.   Association,   263, 

285. 
Stanton  v.  Allen,  19. 
State  v.  Association,  Kansas,  3. 
v.  Association,  Mo.,  3,  8. 
V.  Association,  Ohio.  2,  3,  9,  10, 
19,  20,32,  99,  119,  128,  158. 
i\  Bankers'  Association,  9. 
v.  Bonnell,  93. 
v.  Brawner,  3. 
v.  Central  Mutual,  158. 
v.  Chamber  of  Commerce,   19, 

23,  39,  45,  55,  56,  67,  110. 
v.  Cole,  19. 
v.  Critcliett,  8. 
V.  Crowley,  19. 


TABLE    OF    CASES. 


XXXV 11 


[the  references  are  to  sections.] 


State  v.  Curtis,  17,  20. 

v.  Donaldson,  19. 

v.  Exchange,  23. 

v.  Graham,  3. 

v.  Ins.  Co.,  3. 

v.  Iowa  Association,  3. 

v.  Ga.  Med.  Society,  23,  56,  60, 
73. 

v.  Merchant's  Exchange,  19,  39. 

v.  Miller,  19,  67,  251. 

v.  Monitor  Association,  309. 

v.  Moore,  3,  9. 

v.  Nichols.  3. 

v.  N.  W.  Mutual,  3. 

v.  Odd  Fellows,  29. 

v.  Overton,  17. 

v.  People's  Mutual,  158. 

v.  Pike,  390. 

v.  Portugese  Society,  57,  62. 

v.  Root,  3. 

v.  Stevedore's  Association,  39. 

v.  Slavonska  L  pa,  53. 

v.    Societe  Republicaine,   119, 
120. 

v.  Society,  Ga.,  55. 

v.  Society,   Mo.,   3,   8,  57,  62, 
301. 

v.  Towle,  11. 

v.  Trustees  Salem  Church,  330. 

v.  Whitmore,  3. 

v.  Tudor.  93. 

v.  Turnpike  Co.,  330. 

v.  Verein,  55.  57,  58. 

v.  Western  Union  Society,  119. 

v.  Williams,  19. 

Council  v.  Sharp,  121. 
Stebbins  v.  Jennings,  133. 
Stedwell  V.  Anderson,  232. 
Steen  v.  Ins.  Co.,  320. 
Steinee  v.  Ins.  Co..  152. 
Steinhausen  v.  Association,  325. 
Stephenson  v.  Ins.  Co.,  49,  317. 

v.  Stephenson,  218,  220, 
222a  237   354. 
Sterling  v.  Ins.  Co.,'308.' 
Stevedore's  Ass'n  r.    Waist,  19. 
Stevens  v.  Society,  104. 
r.  Warren,  165. 
Stever  r.  Association,  100. 
Stewart  v.  Association.  100,155,  333. 
v.  Supreme  Council,  200,  323. 
355. 
Stiepel  v.  Association,  306. 
Stigler  v.  Stigler,  1S">. 
Stilwell  V.  Ins.  Co..  211. 
Stimpson  v.  Ins.  (  o..  115. 
Stockdale  v.  School  District,  24,  28. 
Stoddard    v.  Onondago    Conference, 

92. 
Stoelker  v.  Thornton,  165,  236,  348. 
Stohr  v.  Society,  24,  27. 
Stokell  v.  Kimball,  347. 


Stokes  v.  Saltonstall,  382. 

Storer  v.  Wheatley,  196, 

Story  v.  Association,  180. 

Stow  v.  Wyse,  104. 

Stowe  v.  Phinney,  347. 

Stowellr.  American  Association,  147, 

356,  360. 
Strasser  v.  Staats,  49,  285,  315,  317. 
Strawn  v.  Strawn,  194. 
Streeter  v.  Society,  156. 
Streety  v.  Wood,  84. 
Strempel  v.  Rubing,  45,  47,  111. 
Strickland  v.  Pritchard,  120. 
Strong  v.  Harvey,  80. 

v.  McCagg,  119. 
Sturges  v.  Board  of  Trade,  51. 
Stylow  v.  Odd  Fellows,  298,  304. 
Succession  of  Hearing,  165. 
Summers  v.  Ins.  Co.,  412. 
Suppiger  v.  Association,  156,  331,  333, 

334,  340. 
Supplee  v.  Knights  of  Birmingham, 

179,  348. 
Supreme  Commanderv  r.  Amsworth, 

3,  18,  27,  136,  156. 
Supreme   Conclave  v.  Cappella,  219, 

223,  226. 
Supreme  Council  v.    Anderson,    333, 
335,  340. 
v.  Bennett,  183, 196, 

354. 
v.    Boyle,   97,    144, 

326,  392a. 
v.    Connema,    291, 

292. 
v.    Fairman,    3,   9, 

318. 
v.  Firnane,  238. 
v.  Forsinger,  17,  49, 

111.  313,  317. 
v.  Franke,  213,360. 
v.    Garrigus,     157, 

313,  317,  375. 
V.    Green.    95,    183, 

194,  301. 
v.  Larmour,  :'>. 

V.  Morrison.  213, 
22T.    :!2a. 

v.  Perry,    20,  143, 

158^     162.  177, 

195.  2:57. 

V.  Priest.  ITS,  214, 
236,  2;;;. 

o.  Smith,    136,  162, 

mi.     I'M.  195, 

21S.    222a.    224. 

Supreme  Lodge  v.  Abbott,  143,  276, 
285,  323. 
tj.Dalberg,  257,  260. 
v.  Grace,  1 12. 

v.  HutcliiiiM.ii,  183, 
195. 


XXXV111 


TABLE   OF    CASES. 


[THE   REFERENCES    ARE  TO  SECTION'S.] 


Supreme  Lodge  v.  Johnson,  64,  155, 
257,     260,    266, 
323. 
v.    Kalinski,     145, 

287. 
v.  Keener,  289. 
v.   Knight,    14,   18, 
25,  28,  127,  334, 
340,  345,  420. 
v.  Martin,  138,  159. 
v.   Nairn,   136,  194, 
195,    218,    219, 
220a,  222,  222a, 
237. 
v.  Owens,  126. 
v .  Schmidt,  49,  317, 

323,  325. 
v.  Wickser.  46,  257, 

269,  287,  289. 
V.    Zuhlke,    55,    61, 
63,  66,  360. 
Supreme  Sitting  v.  Baker,  124. 

v.    Stein,    111,    313, 
314. 
Susquehanna  Mutual  v.  Gackenbach, 
250.  252. 
v.  Swank,  152. 
Sutherland  v.  Standard  Life,  366. 

v.  Sutherland,  189. 
Sutter  v.  Trustees,  135. 
Sweeney  v.  Society,  19,  39. 
Sweet  v.  Dutton.  189. 
Sweetser  v.  Association,  283,  305. 
Swett  v.  Society,  15,  97,  256,  277,  300, 

309,  338,  343. 
Swick  v.  Home  Life,  322. 
Swift  v.  Association,  167. 
v.  Mass.  Mutual,  325. 
v.  San  Francisco  Board,  3,  200, 
237. 
Symonds  v.  Ins.  Co. ,  143,  285. 


Tafel  v .  Supreme  Commandery,  202. 
Taggart  v.  Association,  257. 
Tailors  of  Ipswick,  19. 
Tarleton  v.  Staniforth,  275. 
Tartar  v.  Gibbs,  132. 
Tateurn  v.  Ross,  350. 
Taylor  v.  Griswold,  93. 

v.  Ins.  Co.,  122,  139,  141,  293, 

296,  298,  331. 
v.  Relief  Union,  326,  331,  333, 
334,  335. 
Tennant  v.  Ins.  Co.,  375,  380,  391. 
Tennessee  Lodge  v.   Ladd,   159,  212, 

241. 
Tenney  v.  Union,  83. 
Terre  Haute  R.  R.  Co.  v.  Buck,  382, 

397. 
Ter  Vree  v.  Geerlings,  94,  132. 


Tesson  v.  Ins.  Co.,  152. 
Teutonia  Life  v.  Anderson,  278. 
Texas  Mutual  v.  Davidge,  270,  300. 
Theobald  v.  Assurance  Society,  384. 
Thomas  v.  Ellmaker,  100,  124,  126. 
v.  Hubbell,  102. 
v.  Leake,  146,  161,  187. 
v.  Thomas,  220a. 
v.  Union,  19,  51. 
v.  Whallon,  250,  255. 
Thompson  v.  Garrison,  81. 

v.  Ins.   Co.,  152,  153,  273, 

295,  298,  299,  323. 
v.  Ludington,  188. 
Thwing  v.  Ins.  Co.,  141. 
Tibbits  v.  Blood,  87. 
Tillman  v.  Davis,  189. 
Timavenis  v.  Union  Mutual,  326. 
Tisdaler.  Ins.  Co.,  326. 
Titcombu  Ins.  Co.,  125. 
Titsworth  v.  Titsworth,  219,  220,  222, 

222a,  354. 
Titus  v.  Ins.  Co.,  142,  283. 
Tobin  v.  Society,  286,  302,  305,  334, 

341. 
Todd  v.  Emly,  79. 
Toledo  R.  W.  Co.  v.  Pindar,  365. 
Tooley  v.  Assurance  Co.,  365,  366,  382, 

383.  386. 
Toram  v.  Association,  49,  310,  316. 
Torrey  v.  Baker,  26. 
Toronto  Ins.  Co.  v.  Sewell,  174. 
Town  of  Esbex  v.  Day,  152. 
Townsend  v.  Crowdy,  346. 
Trask  v.  Ins.  Co.,  416. 
Travelers'  Association  v.  Kelsey,  409. 
Travelers'  Ins.  Co.  v.    Harvey,    390. 
398,  419. 
v.  Jones,  366,  368, 

387. 
v.  McConkey,  156, 
373,  377,  380; 
381,   388. 
v.   Mosley,  381. 
v.     Murray,    395. 
396,  397,  398. 
v.  Seaver,157,  365, 
366,  367,  368. 
v.  Sheppard,  326, 
380. 
Traders'  Mutual  v.  Stone,  12,  250. 
Treadway  v.  Hamilton,  18,  136. 
Treasurer  i'.  Atwater,  130. 
Trenton  Mutual  v.  Johnson,  195. 
Trew  v.  Assurance  Co.,  380,  392,  393, 

397 
Tripp  v.  Ins'.  Co.,  298.  322,   417,  419. 
True  v.  Association,  95,  257,  280,  299, 

307. 
Trough's  Estate,  167. 
Trustees  v.  Adams,  100,  126. 
Tucker  v.  Life  Co.,  371,  392,  409. 


TABLE    OF   CASES. 


XXXIX 


[THE  references  are  to  SECTIONS.] 


Turnbull  v.  Pavson,  32. 

Tuston  v.  Hardy,  322. 

Tuttlev.  Ins.  Co.,  366,  368,  387,  397. 

V.  Walton.  23. 
Twiss  v.  Association,  121. 
Tyler  v.  Association.  164,  190,  355. 

v.  Ins.  Co.,  140. 
Tyrrell  v.  Washburn,  30,  85. 


U 


Ulrich  v.  Reinoehl,  349. 
Underwood  v.  Ins.  Co.,  283. 

v.  Iowa  Legion,  253,  302. 
Union  Central  v.  Cheever.  297,  325. 

v.  Pottker,  280. 
Union  Mutual  v.  Frohard.   331,   334, 
340,  343,  344,  408, 
413. 
v.  Kevser,  17. 
v.  Miller,  23,  260. 
V.    Montgomery.    201, 

205,  212,  243. 
v.  Mowry  136. 
V.  Stevens,  211. 
v.  Wilkinson,  343. 
United  Brethren  v.  White,  407. 
United  States  v.  Bovd,  102. 
U.  S.  Association  v.  Barry,  333,  364, 
374.  379. 
v.  Millard,  388,  402. 
United  Brethren  v.  Schwartz.  302. 
U.  S.  Association  v.  Mueller,  262,  269. 
United   States   Express  Company  v. 

Beabury,  92. 
U.  S.  Ins.  Co.  v.  Vocke,  Adm'r  Kiel- 
gast,  156. 
Ins.  Co.  v.  Wright,  282. 
Mut.  Ace.  Ass'n  v.  Newman, 

379,  394. 
Trust  Co.  v.  Ins.  Co.,  186,  188, 
202. 
Unity  Mutual  v.  Dugan,  167.  347. 
Unsell  v.  Ins.  Co.,  298,  299,  303. 
Utter  r.  Ins.  Co.,  157.  380. 


Valley  Mutual  v.  Burke,  311,  325. 

y.Teewalt,  300,  325. 
Valton  v.  Association,  183, 
Vanatta  v.  [ns.  Co.,  808, 
Van  Bibber  v.  Van  Bibber,  136,  212. 
Van  Bibber's  Adm'r  v.  Van    Bibber, 

176. 
Van  Houten  v.  Pine,   95,  292,   295, 

2:i7. 
Van  Poucke  v.  Society,  23,  49,  316. 
Van  Warl  v.  Price,  322. 
Van  Wyck  v.  Aspinwall,  84. 
A.".i  1 1  Zandl  v.  Ins.  Co.,  156. 
Vasconcellos  u.  Ferraria,  132,  133. 


Vass  v.  Wales,  317. 

Vaux  v.  Henderson,  189. 

Venable  v.  Coffman,  133. 

Vestry  and  Wardens  v.  Barksdale,  99. 

Vette  v.  Ins.  Co.,  320. 

Viall  v.  Genesee  Mutual,  300. 

Viele  v.  Ins.  Co.,  283,  300. 

Yilhon  v.  Marsonin,  328. 

Virginia  Ins.  Co.  v.  Buck,  407. 

Vivar  v.  Supreme  Lodge,  32,  39,  45, 

48, 50,  180,  183,  275,  279,  300. 
Vivian  v.  Otis,  102. 
Volger  v.  Ray,  79. 
Vollman's  Appeal,  218,  220,  222,  222a, 

354. 
Voorheis  v.  Association,  141. 
Vose  v.  Ins.  Co.,  300. 

W 

Wabash  Union  v.  James,  344.  356. 
Wachtel  v.    Society,  61,   63  64,  260, 

266, 285. 
Wade  v.Jones,  194. 
Wadsworth  r.  Co.,  340,  344. 
Wahn  v.  Bank,  17. 
Waiter.  Merrill,  74,  128. 
Waldheim  i\  Ins.  Co.,  202. 
Walker  v.  Cronin,  19. 

v.  Ins.  Co.,  140,  142. 

v.  Larkui.  284. 

v.  Maitland,  865. 

v.  Wainwright,  55, 
Wallr.  Ins.  Co.,  301,  307. 

v.  Society,  141. 
Wallace  v.  Ins.  Co.,  315. 
Walsh  v.  Ins.  Co.,  18,   136,  186,  297, 
300. 

v.  Walsh,  189,  190. 
Walter  V.  Bent-fit  Society,  197. 

Waugelin  v.  <  roe,  54. 

Want  v.  Blunt,  272.  27:?.  301. 

Ward  r.  Londesborougji,  260. 

v.  Saunders,  189. 
Wardens  0.  Barksdale,  135. 
Waring  v.  Medical  Society,  55. 
Warnebold  r.  Grand  Lodge,  95,  300, 

301. 
Warnecke  v.  Lembea,  197. 
Warner  v.  National  Life,  258. 
Warnock  c.  I  (avis,  165,  ;!48. 
Warren  v.  Mower,  104. 
Warwicke  v.  Noakes,  2Ti». 
Washburn  v.  Society,  156,  377. 
Washington    Association  v.   Wood. 

179,  202. 
Washington  Life  v.  Haney,  211,  325. 

Wasoii  r.  ( 'ollaini.  lit?.  325. 

Waterhouse  0.  Murgatroyd,  118. 
Waterman  v.  <  lompany,  99. 

Waters  V.   Ins.  Co.,   156,  865. 

Watkins  v.  Wilcox,  133, 134. 


xl 


TABLE   OF   CASES. 


[the  references  are  to  sections.] 


Watson  v.  Association,  181,  183,  300. 
v.  Avery,  132. 
v.  Jones,  132,  133,  134,  135. 
Wayne  v.  Commercial  Nat.  Bank,  101. 
Weakly  v.  N.  W.  Association,  263. 
Webb  v.  Honnor,  238. 
Weber  v.  Zimmerman,  63. 
Weil  v.  Trafford,  239. 
Wienfeld  v.  Association,  139. 
Weir  v.  Bush,  94. 

Weisert  v  Muehl,  167,  189,  211,  284. 
Weiss  v.  Tennant,  144,  270. 
Welch  v.  Jugenheimer,  157. 
Weld  v.  May,  100. 
Wells  v.  Gates,  79. 

v.  Monihan,  89,  129. 
v.  Society,  291,  300,  301 
v.  Turner,  85. 
Welsh  v.  Crater,  189. 
Wendtv.  Iowa  Legion,  218.  222,222a, 

354. 
West  Branch  Ins.  Co.  v.  Helfenstein, 

415,  416. 
Weston  v.  Richardson,  211. 
Westro'pp  v.  Bruce,  300. 
Wetmoreu  Mutual  Aid,  258,  264,  265. 
Wheeler  v.  Ins.  Co.,  272,  295. 
v.  Odd  Fellows,  150. 
While  v.  Damon,  73. 
Whitakerv.  Ins.  Co.,  139 
White  v.  Ashton,  410. 
v.  Brocaw,  237. 
v.  Browned,   36,    47,   70,    75, 

128,  313,  314. 
v.  Ins.  Co.,  298,  299. 
v.  Lang,  368. 
v.  Ross,  78. 
v.  Union,  11. 
v.  Walker,  410. 
Whitehead  v.  Ins.  Co.,  198. 
Whitehouse  v.  Ins.  Co.,  379,  397. 
Whitehurst  v.  Ins.  Co.,  416. 

v.  Whitehurst,  178. 
White  Lick  v.  White  Lick,  132,  133. 

134. 
Whiteside  v.  Association,  51. 
Whiting  v.  Ins.  Co.,  138,  272,  273. 
Whittachv.  Co.  ,'377. 
Whitley  v.  Ins.  Co.,  138,  270. 
Whitmore  v.  Supreme  Lodge,  3,  322. 
Whitney  v.  Association,  317a. 

v.  Wyman,  15. 
Wicks  v.  Monihan,  89,  129. 
Wiggin  v.  Knights,    148,    145,    270, 

323 
Wilberu  Torgerson,  122. 124.309,  831. 
Wilburn   v.  Wilburn,   190,  209,  210, 

211. 
Wilkinson  v.  Ins.  Co.,  320. 
Willcuts  v.  Ins.  Co.,  136,  270,  298. 
Williams"  Appeal,  167,  227. 
Williams  v.  Association,  371,  401. 


Williams  v.  Bank,  353. 

v.  Ins.  Co.,  64,  250,252,266, 
268,  365. 
Willis  v.  Child,  61. 
Willsonv.  Ins.  Co.,  320. 
Wilmaser  v.  Ins.  Co.,  211. 
Wilson  v.  Association,  366,  370,  407, 
408. 
v.  Island  Church,  135. 
v.  Wright,  101. 
Wimiesheik  Ins.  Co.  v.  Holz,  142. 
Winebrenner  v.  Colder,  133. 
Winespear  v.  Ins.  Co.,  391,  392. 
Winslow  v.  Goodwin,  188. 
Winsor  v.  Odd  Fellows,  188. 
Winspear  v.  Ins.  Co.,  393,  397. 
Winterhalter  v.  Association,  236, 347. 
Wist  v.  Grand  Lodge,  27. 
Witherhead  v.  Allen,  87. 
Wolcott  v.  Association,  403. 
Wolf  v.  Schleiffer,  77,  79,  100. 
Wolff  v.  Ins.  Co.,  157. 
WomersW  v.  Men-it,  117. 
Wood  v.  F.nch,  79. 

v.  Humphrey,  317a. 
v.  Ins.  Co.,  139. 
v.  Woad,  61,  73,  74. 
Woodfin  v.  Ins.  Co.,  415. 
Woolsey  v.  Odd  Fellows,  316,  319. 
Worden  v.  Ins.  Co.,  272,  275,  307. 
Works  v.  Macalister,  176,  320. 
Worley  v.  Association,  178,  232. 
V.  Moore,  356. 

Adm'r,  v  N.  W.  Masonic  Aid 
Ass'n,  178. 
Wright  v.  Association,  144. 

v.  Ins.  Co.,  156,  368,  377,  380, 

387,  388.  407,  410. 
v.  Society,  270. 
v.    Supreme     Commandery, 
274,  275,  305. 
Wuesthoff  v.  Germania  Co.,  326. 
Wyman  v.  Ins.  Co.,  283,  299. 


Yates  v.  Houston,  344. 

Yoe  v.  Association.  262,  263,  272, 273, 

289,  290,  295,  333. 
Yonge  v.  Society,  136,  141. 
York  Co.  Mutual  v.  Knight,  64, 266. 
v.  Myers,  250,  355. 
Young  v.  Hunter,  299. 

v.  Traveler's  Ins.  Co. ,  403, 415. 
Young  Men's  Association  v.   Pollard, 

189,  190,  209,  210. 


Zalleeu  Ins  Co.,  152. 
Zeigler  v.  Ins.  Co.,  290. 


PAET  I. 

THE  LAW  OF  VOLUNTARY  SOCIETIES. 


THE  LAW   OF  VOLUNTARY  SOCIETIES. 


CHAPTER  I. 

MUTUAL  BENEFIT  SOCIETIES. 

§  1,  2.  Generally. 

3.  The  object  is  insurance. 

4.  Plans  of  organization. 

5.  Mutual  assessment  companies. 

6.  Rights  of  members  of  mutual  benefit  societies. 

§  1.  Generally. — From  the  earliest  times  men  have  culti- 
vated their  gregarious  and  social  instincts  by  the  formation  of 
tribes,  guilds,  fraternities,  clubs  and  societies.  They  have  or- 
ganized them  to  resist  encroachments  on  their  liberties,  to 
ward  off  different  forms  of  oppression,  to  assist  each  other  in 
times  of  need,  to  encourage  skill  and  industry  in  trades,  and 
for  political,  religious,  commercial  and  social  purposes.  As  the 
necessity  arose  for  combining  numbers  of  persons  in  any  of 
these  common  objects,  associations  spread  and  developed,  and 
when  they  became  useless,  they  ceased  to  exist.  There  were, 
therefore,  times  when  associations  for  certain  purposes  were 
popular  and  numerous,  and,  as  interest  waned  in  the  cause 
which  brought  them  into  being,  the}r  were  disorganized  and 
abandoned.  They  were  founded  on  general  ideas,  and  con- 
ducted by  men  of  little  education  on  a  narrow  scale,  toward 
the  accomplishment  of  some  specific  and  material  object.  The 
development  of  principles  of  organization  and  government  was 
slow,  but  the  experience  of  many  years  made  possible  the  re- 
cent and  wonderful  growth  in  voluntary  societies.1  Mutual 
benefit  societies  are  the  outgrowth  of  the  fraternities,  clubs 
and  guilds  of  previous  generations,  and  in  them  will  be  found 
the  mature  and  crystalized  ideas  of  mutual  assistance  in  time 

1  See  Brentano;  History  and  Development  of  Guilds;  Encyclopaedia  Bri- 
tannica;  Article  "  Guilds." 


2  MUTUAL    BENEFIT    SOCIETIES. 

of  need  and  sickness,  and  of  the  care  of  the  families  of  deceased 
members.  The  great  object  of  such  societies  is  to  pay  to  such 
families  a  benefit  fund,  to  enable  them  to  procure  the  neces- 
saries of  life. 

§  2.  Generally. — Life  insurance  did  not  become  a  busi- 
ness of  importance  in  England  until  about  the  commencement 
of  the  present  century.  In  this  country,  the  contract  of  life 
insurance  met  with  little  favor  for  many  years  later.  The 
wonderful  development  of  this  business,  of  which  evidences 
are  to  be  seen  on  every  side,  has  taken  place  within  forty- 
five  years.  Mutual  benefit  insurance  is  of  even  more  recent 
growth.  There  is  probably  no  mutual  benefit  society  of  thirty 
vears  standing  in  this  country;  there  are  a  few  which  have 
been  in  existence  for  fifteen  or  eighteen  years,  but  by  far  the 
greater  part  of  those  now  in  existence  have  been  organized 
within  the  past  twelve  years.  But,  within  these  few  years, 
mutual  benefit  insurance  has  grown  to  enormous  proportions, 
and  in  popular  favor,  until  at  the  present  time  many  hundred 
thousands  of  persons  are  carrying  such  insurance  for  the  ben- 
efit of  those  for  whom  it  is  their  duty  and  their  pleasure  to 
provide.  The  courts  of  every  state  are  frequently  called  upon 
to  determine  the  rights  of  parties  under  such  contracts  of  in- 
surance, and  the  rights  of  members  and  their  beneficiaries, 
under  contracts  entered  into  for  such  worthy  and  commend- 
able objects,  are  entitled  to  the  tender  and  intelligent  consid- 
eration o*  courts.1 

1  In  the  North  American  Keview  recognized  plan  of  life,    as  distinct 

for  October,  1890,  it  is  said  of  mutual  from    investment,    insurance  is  at- 

benefit  insurance:  tested  by  the  fact  that  it  paid  more 

"Starting  twenty  years  ago  under  in  death  claims  in  each  of  the  last 
the  form  of  fraternal  insurance,  it  has  two  years  than  did  the  level  premium 
developed  into  a  great  business,  recog-  companies.  Thirteen  millions  of  peo- 
nized  by  the  laws  of  almost  every  state  pie  in  this  country  are  interested  di- 
as  of  equal  legitimacy  with  its  level  rectly  in  its  present  and  future, 
premium  rival.  It  has  formulated  while  the  whole  people  have  a  corn- 
its  methods,  corrected  its  crudities,  nion  interest  in  the  lessons  of  thrift 
and  to-day  enrolls  in  its  list  of  policy-  which  it  teaches.  It  is  far  from 
holders  more  than  2,500,000  citizens,  necessarily  antagonistic  to  the  level 
During  1889  it  paid  over  $42,000,000  premium  plan.  Its  true  rivalry  is  to 
in  death  claims,  swelling  the  total  accomplish  better  than  that  plan  can 
amount  paid  since  organization,  by  the  work  of  life  insurance.  There  is 
the  companies  in  active  existence,  to  abundant  room  for  both.  As  com- 
$300,000,000.     That  it  has  become  the  pared  with  the  level  premium  method, 


MUTUAL    BENEFIT    SOCIETIES.  6 

The  advocates  of  mutual  benefit  insurance  claim  for  their 
plan  many  virtues  and  many  advantages  over  all  other  modes 
of  life  insurance,  and,  on  the  other  hand,  the  advocates  of  or- 
dinary life  insurance  are  bitter  in  their  denunciations  of  mu- 
tual benefit  societies.  This  work  has  nothing  to  do  with  this 
controversy.  It  is  not  the  province  of  the  writer  on  the  legal 
aspect  of  such  societies  and  their  contracts  to  discuss  the  mer- 
its of  the  different  plans  of  life  insurance.  It  is  enough  that 
such  societies  exist,  and  are  recognized  in  statutes  and  courts 
as  a  feature  of  the  insurance  business  of  the  country.  The 
standing  given  to  these  societies  by  the  courts  of  the  land  is 
well  expressed  in  a  case  where  it  is  said : '  "It  does  not  fall 
within  the  province  of  the  court  to  discuss  the  relative  merits 
of  the  different  plans  of  life  insurance,  as  between  the  old  line 
systems  and  those  formed  on  the  co-operative  or  mutual  assess- 
ment plan.  It  is  enough  to  know  that  the  statutes  of  Ohio 
authorize  each  plan,  and  each,  doubtless,  has  its  merits  if  prop- 
erly administered,  and  demerits  if  not.  Whatever  be  the  sys- 
tem, it  is  the  highest  duty  of  the  courts  to  see  that  the  trust 
is  faithfully  administered.  This  is  especially  true  in  the  co- 
operative or  mutual  assessment  plan,  where  there  is  no  reserve 
or  surplus  fund,  and  where  the  assessments  to  pay  benefits  are 
collected  directly  from  the  members,  who  generally  do  not 
understand  the  mysteries  of  life  insurance  management. 
These  associations  doubtless  had  their  origin  in  the  friendly 
and  benevolent  organizations  and  fraternities  claiming  like 
affiliation  and  purpose.  These  and  other  organizations,  having 
for   their   object    the   mutual   aid,  benefit  and  relief  of  their 

the  assessment  plan  bases  its  claims    which  consists  in  the  obligations  of 
upon  the  following  propositions:  policy-holders  to  pay  on  account  of 

(a)  Equal  or  greater  security,  with-    future  death  claims, 
out  resort  to  excessive  charges.  (/)    Reserve  funds  available  at  all 

(5)    Pure  life   insurance,    without   times  as  a  conservator  of  the  insur- 
the  concomitant  of  vast  accumula-    ance-granting    power  of    the    eom- 
tion,  with  the  resultant  dangers  of    party  rather  than  as  a  menace  to  that 
poor      investments    and    misuse     of    function, 
funds.  (g)    Equal    accountability    to    the 

(c)  A  limited,    as  against  an  un-   state    for     the    proper    conduct    of 
limited,  expense  charged.  affairs,  and  equal  recognition  under 

(d)  Funds   paid   for   death   claim    the  law  of  life  insurance, 
purposes  held  inviolate  therefor.  'State  v.   Association,   38  Oh.  St. 

(e)  Equal  security  for  that  portion    281. 
of   the    resources  of    the    company 


4  MUTUAL    BENEFIT    SOCIETIES. 

members,  or  their  families  or  heirs,  when  honestly  and  eco- 
nomically administered  as  a  sacred  trust,  and  not  with  a  view 
to  profit,  are  worthy  the  protection  of  law."  ' 

§  3.  The  object  of  a  mutual  benefit  society  is  insur- 
ance, not  benevolence. — History  tells  us  that  the  origin  of 
life  insurance  is  traceable  to  benevolent  motives.  The  object 
of  such  insurance  was  to  provide  a  fund  for  the  widow  and  or- 
phans of  a  person  whose  income  ceased  with  his  life,  and  such 
an  object  was  certainly  benevolent.  But  whatever  may  be 
the  motive  underlying  the  great  scheme  of  life  insurance,  it  is 
certain  that,  in  its  practical  application,  life  insurance  is,  and 
must  be,  founded  upon  contract.  Its  benevolence  must  flow 
not  from  mere  good  will,  but  from  legal  obligation.  Its  ben- 
efits must  not  depend  upon  the  continuance  of  the  charitable 
impulses  of  those  who  shall  pay,  but  upon  mutual  promises. 
Although  the  object  of  the  insured  in  making  the  contract, 
and  the  objects  of  the  organization  with  which  he  contracts, 
are  benevolent  and  not  speculative,  they  have  no  bearing  upon 
the  nature  and  effect  of  the  business  conducted  and  the  con- 
tract so  made.  Nor  will  the  character  of  the  contract  be 
changed  by  the  fact  that  the  organization  issuing  it  designates 
itself  as  a  benevolent  or  charitable  society,  instead  of  an  in- 
surance company.  The  name  of  the  society  will  not  necessarily 
fix  or  establish  its  real  character.  The  law  will,  when  occasion 
requires,  look  behind  the  names  of  societies,  and  pass  its  judg- 
ment upon  their  schemes  and  modes  of  business.2  If  the  prev- 
alent purpose  and  nature  of  an  association,  of  whatever  name, 
be  that  of  insurance,  its  legal  character  will  not  be  changed  by 
the  benevolent  or  charitable  results  to  its  beneficiaries.     A  so- 

'A    tabulated    statement    by    the  nity;  that  these  fifty-six  societies  in 

auditor  of  public  accounts  of  Illinois  their  general  business  received  from 

of  the  condition  of  life  and  accident  all  sources  during  that  year  $16,491,- 

societies  doing  business  in  that  state  351,  and  disbursed  for  losses  and  ex- 

on    the    assessment  plan     in     1891,  penses  $15,163,967.    On  December  31, 

showed  that  there  were  fifty-six  soci-  1891,  they  held  assets   amounting  to 

eties;  that  they  issued    during   that  $9,215,988,  and  had  actual  liabilities 

year     44,732    certificates,     covering  amounting  to  $636,850.     The  unpaid 

$140,512,000  of  insurance;  that  29,765  losses  on  this  date,  to  pay  which  the 

certificates  representing    $97,890,500  members  were  assessable,  amounted 

of  insurances  were  surrendered  ;  that  to  $3,243,480. 

there  were  in  force  on  December  31,       2  Governors  v.  Union,  7  N.  Y.  228; 

1891,  123,983  certificates  of  member-  State  v.  Graham,  66  Iowa,  62. 
ship,  covering  $359,299,625  of  indem- 


MUTUAL    BENEFIT    SOCIETIES.  5 

ciety,  "which  by  contract  agrees  to  pay  to  the  beneficiary  of 
a  deceased  member  a  sum  of  money,  is  a  mutual  insurance 
company,  whatever  ma}^  be  the  terms  of  payment  of  the  con- 
sideration by  the  member,  or  the  mode  of  payment  of  the  sum 
to  be  paid  in  the  event  of  his  death.1  In  the  leading  case  upon 
this  subject  it  is  said: 2 

"A  contract  of  insurance  is  an  agreement,  by  which  one 
party,  for  a  consideration  (which  is  usually  paid  in  money, 
either  in  one  sum,  or  at  different  times  during  the  continuance 
of  the  risk)  promises  to  make  a  certain  payment  of  money 
upon  the  destruction  or  injury  of  something  in  which  the 
other  party  has  an  interest.  In  fire  insurance  and  marine 
insurance,  the  thing  insured  is  property;  in  life  or  accident 
insurance,  it  is  the  life  or  health  of  a  person.  In  either  case 
neither  the  times  and  amounts  of  payments  by  the  assured, 
nor  the  modes  of  estimating  or  securing  the  payment  of  the 
sum  to  be  paid  by  the  insurer,  affect  the  question  whether  the 
agreement  between  them  is  a  contract  of  insurance.  All  that 
is  requisite  to  constitute  such  a  contract  is  the  payment  of  the 
consideration  by  the  one,  and  the  promise  of  the  other  to  pay 
the  amount  of  the  insurance  upon  the  happening  of  injury  to 
the  subject  by  the  contingency  contemplated  in  the  contract. 
The  contract  made  between  the  Connecticut  Mutual  Benefit 
Company  and  each  of  its  members,  by  the  certificates  of  mem- 
bership issued  according  to  its  charter,  does  not  differ  in  any 

•Commonwealth  v.  Wetherbee,  103  Sherman  v. Commonwealth.  82  Ky. 

Mass.  161;  Granite  Mutual  v.   Porter  102;   5  Ky.  L.  Rep.  874;  State  v.  Ins. 

(Vt.),  2NewEng.  Rep.  119;  State  v.  Co.,   30    Kan.  585;  State    v.  N.    \V. 

Society,  72  Mo.  146;  State  v.  Associa-  Mutual,  16  Neb.  540;  State  v.  Asso- 

tion,  6  Mo.  App.   172;  State  v.    Braw-  ciation,  18  Neb.  276;  State  v.  Nich- 

ner,15  Mo.  App.  597;  Bolton  v.  Bolton,  ols,  66  Iowa,  26;  State  v.    Moore,  38 

73  Me.  299;  Schunk  v.   Fund,  44  Wis.  Oh.  St.  7;  Berry  v.    Indemnity  Co., 

370;  Erdmann   v.  Order  Hermann's  46    Fed.    Rep.     439;     Chartrand    v. 

Sons,  44  Wis.  376;  Dietrich  v.  Asso-  Brair,  16    Colo.    19;     26   Pac.    Rep. 

ciation,  45  Wis.  79;  Mason's  Benevo-  152;  Rensen house  v.  Seeley,  72  Mich, 

lent  Society  v.  Winthrop,  85  111.  537;  603;  see  Commonwealth  v.  Associa- 

Illinois   Masons  v.     Baldwin,   86  111.  tion,  137  Pa.   St.    412;   18  Atl.  Rep. 

479;   Golden  Rule   v.  People.  118  III.  1112;     Order   v.  State  (Md.),  26   All. 

492,    9  N.  East.  Rep.    342;   7  West.  Rep.  1040;  State  v.  Root  (Wis.)  54  X. 

Rep.  219;  Fanner  v.  State,  69  Texas,  W.  Rep.  33;  Commonwealth  v.  Weth- 

561;    7    S.    W.    Rep.  220;    Supreme  erbee.  supra. 

Council  v.    Larmour,  81  Texas,  71;  s  Commonwealth    v.      Wetherbee, 

16  S.  W.  Rep.     633;  Supreme   Com-  supra. 
inandery  v.  Ainsworth,  71  Ala.  436; 


5  MUTUAL   BENEFIT    SOCIETIES. 

essential  particular  of  form  or  substance  from  an  ordinary 
policy  of  mutual  life  insurance.  The  subject  insured  is  the 
life  of  the  member.  The  risk  insured  is  death  from  any  cause 
not  excepted  in  the  terms  of  the  contract.  The  assured  pays 
a  sum  fixed  by  the  directors  and  not  exceeding  ten  dollars,  at 
the  inception  of  the  contract,  and  assessments  of  two  dollars 
each  annually,  and  of  one  dollar  each  upon  the  death  of  any 
member  of  the  division  to  which  he  belongs,  during  the  con- 
tinuance of  the  risk.  In  case  of  the  death  of  the  assured  by  a 
peril  insured  against,  the  company  absolutely  promises  to  pay 
to  his  representatives,  in  sixty  days  after  receiving  satisfactory 
notice  and  proof  of  his  death,  '  as  many  dollars  as  there  are 
members  in'  the  same  division,  the  number  of  which  is 
limited  to  five  thousand.  The  payment  of  this  sum  is 
subject  to  no  contingency  but  the  insolvency  of  the  corpora- 
tion. The  means  of  paying  it  are  derived  from  the  assessments 
collected  upon  his  death  from  other  members;  from  the  monev 
received  upon  issuing  other  certificates  of  membership,  which 
the  by-laws  declare  may,  after  payment  of  expenses,  be  '  used 
to  cover  losses  caused  by  the  delinquencies  of  members,'  and 
from  the  guaranty  fund  of  one  hundred  thousand  dollars,  estab- 
lished by  the  corporation  under  its  charter.  This  is  not  the  less  a 
contract  of  mutual  insurance  upon  the  life  of  the  assured,  be- 
cause the  amount  to  be  paid  by  the  corporation  is  not  a  gross 
sum,  but  a  sum  graduated  by  the  number  of  members  holding- 
similar  contracts;  nor  because  a  portion  of  the  premiums  is  to  be 
paid  upon  the  uncertain  periods  of  the  deaths  of  such  members; 
nor  because,  in  case  of  non-payment  of  assessments  by  any 
member,  the  contract  provides  no  means  of  enforcing  payment 
thereof,  but  merely  declares  the  contract  to  be  at  an  end,  and 
all  moneys  previously  paid  by  the  assured,  and  all  dividends  and 
credits  accrued  to  him,  to  be  forfeited  to  the  company."  A 
corporation  with  salaried  officers,  paying  commissions  on  risks 
obtained,  insuring  and  admitting  to  membership  any  one 
having  the  requisite  conditions  of  age  and  health,  and  re- 
quiring no  other  qualification  for  membership,  can  not  evade 
the  insurance  laws  by  calling  itself  a  benevolent  society  and 
obtaining  a  charter  as  such.1 

In  discussing  the  subject  of  mutual  benefit  insurance,  courts 

1  State  v.  Association,  6  Mo.  App.  163. 


MUTUAL    BENEFIT    SOCIETIES.  i 

have  intimated  that  there  is  possibly  a  distinction  between  a 
society,  the  primary  object  of  which  is  to  contract  with  its 
members  for  the  insurance  of  their  lives,  and  a  society  organ- 
ized for  a  social,  literary,  or  benevolent  purpose,  to  which  a 
feature  of  mutual  insurance  is  added  for  the  purpose  of  mutual 
aid.1  The  distinction  amounts  to  this,  that  while  the  contract 
is  one  of  mutual  life  insurance,  the  societies  having  the  feat- 
ure of  mutual  aid,  can  not  be  said  to  be  carrying  on  a  general 
business  of  mutual  life  insurance.  There  is,  however,  no  case 
in  which  it  has  been  held  that  such  a  society  is  not  an  insur- 
ance company  within  the  meaning  of  the  statutes  regulating 
insurance  companies,  except  where  such  society  was  chartered 
under  special  laws  providing  for  the  incorporation  of  such 
societies.  The  text  books,  as  well  as  the  opinions  of  various 
courts,  contain  definitions  of  the  contract  of  insurance,  as  it  is 
applied  to  its  various  subjects;  and  although  differently  ex- 
pressed, they  all  concur  as  to  its  substantive  elements,  that  all 
which  is  essential  to  such  a  contract  is  the  payment  of  a  con- 
sideration by  one  party,  and  the  promise  of  the  other  to  pay 
an  agreed  amount  upon  the  happening  of  the  contingency 
specified  in  the  contract,  it  being  understood  that  the  former 
party  had  an  insurable  interest  in  the  subject-matter  insured.2 
The  payment  of  the  benefit  fund  by  a  mutual  benefit  society 
to  the  beneficiary,  or  the  payment  of  a  "  sick  benefit,"  or 
''permanent  disability  indemnity"  by  the  society  to  a  mem- 
ber, is  not  voluntary,  and  in  the  nature  of  a  gift,  but  is  the 
fulfillment  of  a  contract  of  insurance  entered  into  by  the 
member  and  the  society.3  A  contract  by  a  society  to  pay,  at 
certain  stated  periods  of  time,  certain  sums  of  money  as 
endowments  to  living  members,  or,  in  case  of  their  death,  to 
pay  certain  other  sums  of  money  as  benefits  to  their  benefici- 
aries, is  life  insurance,  both  as  to  the  endowment  and  the 
benefit.4     A  mutual  benefit  society  incorporated  under  special 

'Supreme  Council  v.  Fairman,  10  Elkhart  Mutual  Aid,  etc.,  v.  Hough- 
Abb.  N.  C.    162;   62  How.     Pr.  386;  ton.  98  End.    1  19. 
Durian  v.    Verein,7  Daly,  168;  Bar-  8  Bolton  v.  Bolton,  73  Me.  299. 
baro  v.  Occidental  Grove,  4  Mo.  App.  *  Endowment  &  Benevolent   Asso- 

429;   State  r.r    nf.    v.     lVnetit      Asso-  ciation   v.    State,   35  Kan.  253;   State 

ciation,  6    Mo.    App.   172;    Swift   v.  v.  Mutual  Aid   Association,  33  Kan. 

San  Francisco  Board,  <iT  Cal  ">67.  51;    9  Pac.  Pep.  900. 
•  Bolton    v.    Bolton,    73    Me.   299; 


8  MUTUAL   BENEFIT    SOCIETIES. 

Laws,  is  governed  by  the  law  under  which  it  is  incorporated, 
and  by  the  law  relating  to  corporations,  but,  in  carrying  on 
its  business  of  mutual  assessment  insurance,  it  is  not  subject 
to  the  statutes  of  the  state,  relating  to  life  insurance  and  life 
insurance  companies.1  Mutual  benefit  societies  are  subject  to 
the  application  of  those  legal  principles  applicable  to  other 
mutual  life  insurance  companies.2 

§  4.  The  plans  upon  which  such  societies  are  organized; 
supreme,  co-ordinate  and  subordinate  bodies. — The  details 
of  the  different  plans  upon  which  mutual  benefit  societies  are 
organized  are  too  numerous  to  mention.  The  main  features  of 
the  largest  and  best  known  of  such  organizations,  however,  are 
soon  told.  The  supreme  or  governing  body  is  a  corporation 
chartered  under  the  laws  of  some  state,  for  the  purpose  of  as- 
sisting- certain  classes  of  beneficiaries  on  the  death  of  a  mem- 
ber.  It  is  the  legislative  and  governing  body  of  the  society, 
and  is  composed  of  its  own  officers  and  representatives  from 
the  grand  lodges  or  councils  of  the  different  states.  Each 
grand  lodge  or  council  is  composed  of  its  officers  and  represen- 
tatives of  the  subordinate  lodges  or  councils  of  the  state  in 
which  it  is  located.  The  subordinate  lodges  or  councils  are 
the  local  bodies  into  which  the  members  are  received,  or  through 
which  they  are  received  into  the  society.  The  benefit  fund  is 
held  in,  and  paid  from,  the  treasury  of  the  supreme  body,  and 
is  made  up  of  assessments  levied  on  the  members  of  the  subor- 
dinate or  local  bodies.  Certain  qualifications  for  membership 
are  usually  prescribed,  such  as  that  an  applicant  shall  be  be- 
tween certain  ages,  of  sound  health  and  of  good  moral  char- 
acter. He  is  usually  required  to  sign  an  application  for  mem- 
bership, which  is  in  form  and  effect  very  similar  to  an  applica- 
tion for  life  insurance,  and  to  present  himself  for  examination 
to  the  medical  examiner  of  the  subordinate  body.  When  the 
medical  examination  has  been  approved  by  the  medical  ex- 
aminer for  the  grand  lodge  of  the  state,  or  by  the  medical 

'Hysinger  v.  Supreme    Lodge,  42  house  v.  Seeley,  72  Mich.  603;  40  N. 

Mo.  App.  627;    State  ex  rel.  v.  The  W.  Rep.  765;    State  v.  Whitmore,  75 

Mutual    Protection     Association,   26  Wis.     322;    43    N.    W.    Rep.     1133; 

Oh.  St.  19;  State  v.Iowa  Mutual  Aid  Whitmore  v.  Supreme  Lodge,  100  Mo. 

Association,  59  Iowa,  125;  12  N.  W.  36:  13  S.  W.  Rep.  495. 

Rep.  782;    Supreme   Council  v.  Fair-  s  Erdmann  v.  Order  of  Hermann's 

man,    02    How.    Pr.     386;    Rensen-  Sons,  44  Wis.  376. 


MUTUAL   BENEFIT    SOCIETIES.  9 

examiner  of  the  supreme  body,  the  applicant  is  eligible  to  an 
election  as  a  member  of  the  subordinate  body.  The  supreme 
body  is  usually,  if  not  always,  incorporated,  but  the  grand  and 
subordinate  bodies  may,  or  may  not,  be  incorporated.  In  some 
societies,  the  grand  lodge  of  each  state  holds  the  benefit  fund 
for,  and  makes  assessments  on,  the  members  of  the  local  lodges 
in  that  state. 

§  5.  Mutual  assessment  life  insurance  companies. — There 
are  many  mutual  insurance  societies  doing  business  on  the  as- 
sessment plan,  which  have  no  social  organization.  To  distin- 
guish them  from  mutual  benefit  societies,  they  may  properly 
be  called  "  mutual  assessment  life  insurance  companies,"  but 
the  law  arising  from  the  contracts  of  insurance  issued  by  them 
does  not  necessarily  differ  in  any  particular  from  contracts  of 
mutual  benefit  insurance.  A  company  is  incorporated  under 
the  laws  of  some  state,  and  a  general  insurance  business  is  con- 
ducted under  the  restrictions  imposed  by  those  laws.  Among 
such  restrictions  may  usually  be  found  provisions  against  oper- 
ating the  company  for  profit,  and  against  the  payment  of 
stated  premiums  for  insurance.  The  classes  of  persons  who 
may  be  beneficiaries  of  such  insurance  are  often  limited,  and 
the  contract  of  the  company  to  pay  a  sum  as  a  death  benefit 
is  usually  made  dependent  upon  the  realizing  of  the  amount 
from  an  assessment  on  its  members.  With  such  and  kindred 
exceptions,  these  organizations  carry  on  a  general  insurance 
business,  and  the  contracts  issued  by  them  may  be  termed 
mutual  assessment  insurance  policies.  But  while  there  may 
be  a  distinction  between  mutual  benefit  and  mutual  assessment 
insurance,  there  is  no  practical  difference  between  them. 

§  6.  Rights  of  members  of  mutual  benefit  societies. — The 
rights  of  a  member  of  a  mutual  benefit  society  are  two-fold — 
those  which  arise  out  of  the  contract  of  membership,  and  those 
which  arise  under  his  contract  for  benefits  and  insurance.  In 
seeking  to  determine  the  rights  of  a  member  of  such  a  society, 
it  is  necessary,  therefore,  to  determine  under  which  contract 
they  arise.  The  corporate  rights  of  a  member  of  a  mutual 
benefit  society  are  subject  to  the  control  of  the  corporation  ; 
but  his  rights  as  an  insured  person  rest  upon  his  contract  with 
the  society.1     In  the  first  part  of  this  work  the  rights  of  a 

'§136;  Bradfieldv.  Union  Mutual,  Rosenberger  v.  Washington  Mutual, 
9  Weekly  Notes  of  Cases  (Pa.),  436;    87  Pa.  St.  207. 


10  MUTUAL    BENEFIT    SOCIETIES. 

member  of  a  society  will  be  discussed,  and,  in  the  second  part, 
the  contract  of  mutual  benefit  insurance  will  be  treated  of.  At 
the  present  time,  the  laws  of  the  different  states  provide  for 
the  incorporation  of  voluntary  societies  for  any  lawful  pur- 
pose, not  for  profit,  and  almost  all  societies  take  upon  them- 
selves the  rights  and  burdens  under  these  laws,  and  are  gov- 
erned by  the  general  laws  relative  to  corporations.  But  a 
large  number  of  societies  are  unincorporated.  It  is  proposed 
now  to  treat  of  incorporated  and  unincorporated  societies. 


CHAPTEE  II. 

CHARTER  AND  CONSTITUTION. 

§  7.     Of  charters  in  general. 

8.  The  object  of  a  society  must  be  authorized  by  its  organic  law. 

9.  The  plan  of  doing  business  must  be  authorized  by  the  organic 

law. 

10.  Manner  of  doing   business  set   forth  in  certificate  of    incorpo- 

ration. 

11.  The  object  of  a  society  must  be  legal. 

12.  When  corporate  existence  may  not  be  attacked. 

13.  Ultra  vires. 

14.  Constitution  of  a  society. 

15.  Incorporation  of  unincorporated  societies. 

§  7.  Of  charters  in  general. — Charters  are  granted  by 
the  sovereign  power  of  the  state,  and  a  society  can  not  by  its 
own  act  create,  alter  or  amend  its  charter.  An  incorporated 
society  is  brought  into  being  by  its  charter,  and  derives  its 
powers  from  it.  While  such  a  society  may  create,  amend  or 
abrogate  its  constitution  and  by-laws,  its  charter  is  in  no 
manner  subject  to  its  control.  When  the  authorities  speak  of 
a  charter,  they  mean  an  essentially  different  thing  from  a 
constitution  created  by  the  society.  The  articles  of  incorpo- 
ration of  a  society  and  the  statutes  under  which  they  are 
formed,  are  its  charter  and  its  fundamental  law.  They  fix  the 
rights  of  its  members,  and  are  in  the  nature  of  a  fundamental 
contract  in  form  between  the  corporators,  and,  in  practical 
effect,  between  the  society  and  its  members,  which  neither 
party  is  at  liberty  to  violate.1  The  society  and  each  member  of 
it  are  bound  by  the  charter,  and  neither  can  do  what  it  does 
not  authorize.3 

A  charter  granted  by  the  state  is  subject  to  the  constitu- 
tion and  general  laws   of  that  state.     As  a  natural  person  is 

'Bergman   v.    St.  Paul  Mutual,  29        2  Rosenberger   v.    Washington  Mu- 
Minn.  275;  Hogan  v.  League,  99Cal.    tual,  87  Pa.  St.  207. 
248;  33  Pac.  Rep.  924. 

(11) 


12  CHARTER    AND    CONSTITUTION. 

governed  by  the  laws  under  which  he  lives,  so  a  corporation, 
an  artificial  person  created  by  the  sovereign  power  of  the  gov- 
ernment, must  take  its  rights  subject  to  the  general  laws.  It 
is  well  settled  that  a  person  who  deals  with  a  corporation  must, 
at  his  peril,  take  notice  of  its  charter  and  of  all  the  general 
laws  of  the  state,  affecting  the  business  of  corporations.1  A 
society  organized  under  an  act  providing  for  the  incorporation 
of  mutual  benefit  societies  is  governed  by  the  law  under  which 
it  is  incorporated  and  by  the  law  relating  to  corporations. 

Where  a  society,  having  a  charter  from  one  state,  after- 
ward receives  from  another  state  a  charter  differing  from 
the  first  in  some  particulars,  the  effect  is  not  to  amend  the 
former  charter  but  to  create  a  distinct  corporation.  Two 
states  can  not,  by  legislative  action,  unite  to  create  but  one 
corporation.2 

§  8.  The  object  of  a  society  must  foe  authorized  by  its 
organic  law. — The  act  of  incorporation  is  to  a  corporation  an 
enabling  act;  it  gives  to  it  all  the  power  it  possesses.  A  cor- 
poration is  the  mere  creature  of  the  act  to  which  it  owes  its 
existence,  and  may  be  said  to  be  precisely  what  the  incorporat- 
ing act  has  made  it,  to  derive  all  its  powers  from  the  act,  and 
to  be  capable  of  exerting  its  faculties  only  in  the  manner 
which  that  act  authorizes.3  An  act  for  the  incorporation  of 
societies  can  never  be  extended  by  construction  to  cases  not 
reasonably  within  its  terms.  Where  an  act  of  the  legislature  au- 
thorizes the  formation  of  corporations  exclusively  for  literary, 
scientific  and  benevolent  purposes,  a  society  organized  under  it 
for  religious  purposes  is  not  legally  incorporated,  and  is  usurp- 
ing functions  from  which  it  may  be  ousted.  There  is  a  well- 
defined  distinction  between  religious  purposes  and  those  which 
are  merely  literary  and  scientific,  and  religious  purposes  differ 
also  from  those  of  general  benevolence.4  A  society,  the  object 
of  which  is  to  endow  the  wife  of  each  member,  when  he  shall 
have  married,  with  a  sum  of  money  equal  to  as  many  dollars 
as  there  are  members  of  the  association,  to  be  raised  by  assess- 
ment on  them,  is  not  a  "  benevolent  society  "  for  the  purposes 
of  incorporation   under   laws  relating   to    incorporation    of 

'Morawetz  on  Corp.,  §  591.  4  People  ex  rel.  v.  Benevolent  Soci- 

4  Bachmann  v.   Supreme  Lodge,  44    ety,  41   Mich.  67;     People  ex  rel.  v. 

111.  App.  188.  Benevolent  Society,  24  How.  Pr.  216. 

3 Head  v.   Ins.   Co.,  2  Cranch  127; 

Phillips  on  Insurance,  pg.  9. 


CHARTER   AND   CONSTITUTION.  13 

benevolent  societies.  It  is  clear  from  the  plan  of  such  a  soci- 
ety that  it  is  not  intended  to  bestow  any  benefit  or  help  with- 
out what  is  thought  to  be  an  equivalent.  The  undertaking  of 
the  society  to  pay  is  not  in  any  sense  benevolent,  but  is  a  quid 
pro  quo;  it  is  paid  for.1  A  society  for  mutual  insurance  may 
not  be  incorporated  under  laws  providing  for  the  incorpora- 
tion of  benevolent  societies.2  But  notwithstanding  the  fact 
that  societies  so  organized  are  not  corporations  de  jure,  they 
must,  at  least  as  between  their  members,  be  regarded  as  corpo- 
rations de  facto.3  A  society  for  pecuniary  gain,  organized  for 
the  purpose  of  aiding  its  members  by  loans  or  advances  of 
money,  is  not  a  "  benevolent  "  or  "  charitable  "  society  within 
the  meaning  of  the  act  of  1848,  of  New  York,  providing  for 
the  incorporation  of  benevolent,  charitable,  scientific  and  mis- 
sionary societies.* 

§9.  The  plan  of  doing  business  must  be  authorized  by 
the  organic  law. — The  plans  of  doing  business  set  forth  in 
the  charters  of  societies,  while  they  may  and  do  differ  widely 
in  detail,  must  fall  within  the  statutes  under  which  such  cor- 
porations are  organized,  and  the  purposes  of  the  organization 
must  be  such  as  are  provided  for  in  those  laws.  In  its  articles 
of  incorporation  a  society  declared  its  object  to  be,  among  other 
things,  to  assist  its  members  in  the  struggles  incident  to  life, 
to  secure  for  them  in  their  old  age  mutual  aid  and  protection, 
and  to  establish  a  fund  for  the  benefit  and  relief  of  widows  and 
orphans  of  deceased  members.  It  was  held  that  this  society, 
having  for  its  object  in  part  the  benefit  of  its  members  gen- 
erally, and  not  wholly  the  benefit  of  the  widows,  orphans, 
heirs  and  devisees  of  deceased  members,  was  not  properly 
organized  under  the  laws  providing  for  benefits  to  widows,  or- 
phans, heirs  and  devisees  of  deceased  members,  and  was  usurp- 
ing powers  not  conferred  upon  it  by  law.6    A  proceeding  in 

1  State  ex  rel.  v.  Critchett,  37  Minn,  wealth  v.  Weatherbee,  105  Mass.  149. 

18;  32  N.  W.  Rep.  787.  'Foster  v.  Pray  etal.,  35  Minn.  458; 

'State  v.    Critchett  (Minn.),  32  N.  29  N.  W.  Rep.  155. 

W.  Rep.  787;  Foster  v.  Pray  et  al,  85  4  People  v.  Nelson,  46  N.  Y.  477;  60 

Minn.  458;  29  N.  W.  Rep.  155;  People  Barb.  159. 

ex  rel.  v.  Nelson,  46  N.  Y.  477:  Folger  8  The  Golden  Rule  v.  People  ex  rel., 

J.,  dissenting;    State   v.    Benevolent  118  111.  492;   People  v.    The  Golden 

Society,  72  Mo.  146;  State  v.  Benefit  Rule,  114  111.  34;  28  N.  East  Rep.  283. 
Assn.,   6  Mo.    App.    163;     Common- 


14  CHARTER   AND    CONSTITUTION. 

the  nature  of  a  quo  warranto  was  instituted  against  a  society, 
alleging  that  it  was  exercising  the  powers  and  functions  of  an 
insurance  company  without  having  complied  with  the  insur- 
ance law.  It  was  held  that  a  society  issuing  policies  on  the 
lives  of  its  members,  payable  in  case  of  death  to  the  widow, 
orphans,  heirs  and  devisees  of  the  members,  and  to  them  alone, 
and  providing  in  its  by-laws  that  each  member  may  be  assessed 
for  the  general  expense  fund  in  such  sums  as  may  be  deter- 
mined upon  by  the  trustees,  not  to  exceed  $20  in  any  one 
year,  is  not  a  life  insurance  company  under  the  statute  which 
requires  a  capital  of  $100,000  in  money  or  securities  before 
transacting  its  business,  and  the  act  amendatory  thereof. 
A  clause  in  the  act  under  which  this  society  was  organized 
provided  that  no  member  should  receive  any  money  as  profit 
or  otherwise.  In  construing  this  clause,  the  court  held  that  it 
was  designed  to  prevent  the  corporation  from  making  divi- 
dends of  profits  among  its  members,  and  that  the  payment  of 
an  officer,  who  was  a  member,  for  services  rendered,  would  not 
be  "  receiving  money  as  profit."  In  discussing  the  questions 
involved,  the  court  said :  "  The  appellant  was,  no  doubt,  an 
insurance  company  in  the  general  and  enlarged  sense  of  that 
term.  It  issued  policies  to  its  members,  which  were  payable 
upon  the  death  of  a  member  whose  life  was  insured,  and  did 
various  other  acts  which  are  usually  done  by  life  insurance 
companies,  but  this  did  not  necessarily  bring  it  within  the  def- 
inition of  a  life  insurance  company,  as  that  term  is  used  in  the 
act"  regulating  ordinary  insurance  companies.1  When  the  law 
provides  that  a  society  may  furnish  relief  to  members  on 
account  of  sickness,  or  other  physical  disability,  it  is  proper  for 
the  society  to  provide  in  its  contract  of  insurance  for  relief  to 
members  who  shall  have  attained  the  age  of  seventy-five 
years;  the  attainment  of  such  an  age  is  a  "  physical  dis- 
ability," within  the  true  intent  and  meaning  of  the  act.2 
Where  the  law  under  which  a  society  is  organized  provides 
that  the  members  shall  from  time  to  time  be  assessed  specific- 
ally to  pay  such  losses  and  expenses  as  may  be  incurred,  the 
society  may  not  adopt  a  plan  of  insurance  by  which  the  mem- 
bers, upon  advance  payment  of  an  agreed  annual  deposit, 
shall  be  exempted  from  liability  to  assessment  to  pay  losses 

1  The  Commercial    League  v.  Peo-       5  Supreme  Council   t.  Fairmau,  62 
pie  ex  rel. ,  90  111.  166.  How.  Pr.  (N.  Y.)  386. 


CHARTER    AND    CONSTITUTION.  15 

occurring  during  the  year  for  which  such  pre-payment  was 
made,  and  by  which  a  contract  of  insurance  may  be  declared 
forfeited  for  the  non-payment  in  advance  of  an  annual  deposit, 
whether  an  assessment  during  such  year  to  pay  losses  may  be 
necessary  or  not.  Such  annual  deposit  paid  in  advance,  based 
upon  a  table  of  mortality,  and  without  reference  to  an  amount 
necessary  to  pay  losses  which  may  occur  during  the  year,  is, 
in  fact,  a  premium  paid  for  carrying  the  risk,  and  not  a  spe- 
cific assessment.1  Where  the  law  under  which  a  society  is 
organized  provides  that  the  "  members  shall  receive  no  money 
as  profit,"  any  plan  or  scheme  by  which  profits  are  made  or 
divided  is  unauthorized.  A  plan  by  which  annual  deposits 
are  required  to  be  made,  and  if  these  annual  deposits  exceed 
the  necessary  expenses  and  losses  during  a  given  year,  thev 
are  to  be  treated  as  "  savings,"  out  of  which  dividends  are  to 
be  made  to  those  who  may  then  be  members,  is  contrary  to 
such  provision  of  the  law.2  Where  the  statute  under  which  a 
society  is  incorporated  prohibits  the  payment  of  any  money  to 
a  member  as  profits,  and  provides  that  no  part  of  the  funds 
collected  for  the  payment  of  death  benefits  shall  be  applied  to 
any  other  purpose,  it  is  not  lawful  for  the  society  to  do  busi- 
ness upon  a  plan  by  which  it  agrees  that,  at  the  end  of  ten 
years,  the  tontine  or  guarantee  fund,  consisting  of  twenty-five 
per  cent  of  death  assessments  collected,  will  be  distributed 
equally  among  the  surviving  members  of  the  tontine  class. 
Such  a  division  of  the  tontine  fund  and  its  accumulation  of 
interest  among  the  surviving  members  is  contrary  to  the  pro- 
visions of  the  law.3 

The  charter  of  a  society  contained  this  provision  :  "  The 
object  or  purpose  of  this  association  shall  be  the  creation  of  a 
fund,  by  making  mutual  pledges  and  giving  valid  obligations 
of  its  members  to  and  with  each  other,  for  their  own  insurance 
from  loss  by  death  of  its  members.  *  *  *  This  association 
shall  have  no  capital  stock;  it  shall  receive  no  premiums,  nor 
make  any  dividend."  An  action  of  gun  warranto  was  brought. 
claiming  that  the  society  was  doing  an  insurance  business  not 
authorized  by  its  charter.     The   society,  by  its  plan    of  insur- 

'  State  v.  Association,  42  Ohio  St.        ■  State  v.  Association,  supra;  Clii- 
B55.  cago  Mutual  v.  Hunt,  127  111.  207:  20 

8  State  v.  Association,  supra.  N.  East.  Rep.  55. 


16  CHARTER   AND    CONSTITUTION. 

ance,  required  from  a  member  a  deposit  "of  one  dollar  for  each 
and  every  year  of  his  age,  counted  at  his  nearest  birthday, 
which  deposit  shall  form  a  pledge  or  guaranty  for  the  pay- 
ment of  assessments  for  death  losses  and  annual  dues."  In 
deciding  that  the  society  was  doing  such  a  business  as  was  au- 
thorized by  its  charter,  the  court  said  :  "  But  this  fund  is  not  a 
fund  for  the  payment  of  losses,  but  a  guaranty  of  the  payment  of 
the  assessments.  Upon  the  death  of  a  member  this  guaranty 
deposit  is  paid  to  his  beneficiary,  and  this  in  addition  to  and 
independent  of  the  proceeds  of  the  assessment.  Upon  a  failure 
to  pay  his  assessments,  the  deposit  is  forfeited  to  the  company, 
and  the  interest  received  upon  the  investment  of  the  deposit 
belongs  to  the  company,  and  from  these  accumulations  there 
may  come  a  fund,  out  of  which  the  amount  which  would  be 
due  in  case  of  a  death  can  be  paid  without  any  assessment, 
and  provision  is  made  for  such  contingency.  But  this  provis- 
ion against  a  large  accumulation  of  funds  in  no  manner 
changes  the  character  of  the  association.  Its  purpose  and 
object  is  still  the  collection  of  assessments  from  living 
members,  to  pay  the  beneficiary  of  a  deceased  member." l 
The  scheme  of  a  corporation  was  that  each  applicant  for 
membership  should  pay  $5  for  his  certificate,  $2  a  month 
thereafter  to  an  endowment  fund,  and  fifty  cents  dues  every 
quarter,  the  latter  to  be  used  in  defraying  expenses,  the  endow- 
ment fund  to  be  deposited  and  allowed  to  remain  idle  in  bank; 
that  the  certificates  should  mature  and  be  paid  in  numerical 
order,  a  certificate  to  mature  whenever  there  is  $200  (the 
amount  of  the  certificate)  in  the  endowment  fund,  the  holder 
of  such  certificate  being  compelled  to  pay  $5  and  take  a  new 
certificate.  Payments  of  $15  a  week  for  five  weeks  to 
sick  or  injured  members  was  also  provided  for.  It  was  held 
that  the  scheme  was  only  to  benefit  the  officers,  and  those  who 
should  have  the  lowest  numbered  certificates,  and  not  all 
the  members  alike,  and  the  company  was  not  within  the  pro- 
visions of  the  act  providing  for  "  the  maintenance  of  a  society 
for  beneficial  or  protective  purposes  to  its  members  from 
funds  collected  therein,"  and  empowering  courts  to  grant 
certificates  of  incorporation  to  such  societies.  A  court,  after 
having    improvidently    granted    a   certificate   of    incorpora- 

1  The  State  ex  rel.  v.  Bankers'  Association,  23  Kan.  499. 


CHARTER   AND    CONSTITUTION.  17 

tion  to  such  company,  may  revoke  the  same,  since,  hav- 
ing been  granted  without  authority,  it  was  void  ah  initio.1 
The  statutes  of  Ohio  provide  that  a  society  "  may  be  organized 
for  the  purpose  of  mutual  protection  and  relief  of  its  members, 
and  for  the  payment  of  stipulated  sums  of  money  to  the  fami- 
lies or  heirs  of  the  deceased  members,  *  *  *  and  such  asso- 
ciation shall  not  be  subject  to  the  preceding  sections  of  this 
chapter,"  providing  for  the  furnishing  of  security  for  the  as- 
sured. A  society,  organized  under  the  laws  of  Pennsylvania, 
was  authorized  to  engage  in  the  business  of  "  insuring  lives  on 
the  plan  of  assessments  upon  surviving  members,"  without 
other  restrictions  than  that  policy  holders  should  have  an  in- 
terest in  the  lives  of  members.  This  society  attempted  to  do 
business  in  Ohio,  without  complying  with  the  general  insur- 
ance law  in  furnishing  security  for  the  assured,  but  the  court 
held  that  this  exemption  was  allowed  on  account  of  the  limited 
nature  of  the  life  insurance  which  such  societies  were  authorized 
to  assume,  being  confined  to  insurance  for  the  benefit  of  the 
families  and  heirs  of  members,  and  that  the  plan  under  which 
the  Pennsylvania  society  was  authorized  to  do  business  did 
not  come  within  this  exemption.  The  court  further  held  that 
the  law  of  comity  was  fully  satisfied  when  foreign  companies 
were  permitted  to  do  business  in  the  state  upon  the  terms  pre- 
scribed for  domestic  companies.2 

An  act  of  Virginia  provides  that  insurance  companies  on 
the  assessment  plan  may  be  licensed  to  do  business  without 
being  required  to  make  the  deposit  of  bonds  provided  for  by 
the  general  law;  and  that  every  such  company  shall  deposit 
with  the  auditor  a  copy  of  its  constitution  and  by-laws,  "  which 
must  show  that  all  indemnities  to  beneficiaries  are  in  the  main 
provided  for  by  assessments  upon  all  surviving  members." 
1'nder  this  act,  such  a  company  as  would  be  exempt  from  the 
general  law  is  one  having  a  mutual  system,  by  which  a  loss 
is  in  the  main  paid  by  laying  an  assessment  for  the  purpose 
on  the  members  of  the  company  who  are  living  when  the  loss 
occurs;  but  the  act  does  not  exempt  a  company  in  which  ;ill 
indemnities  to  beneficiaries  are  in  the  main  provided  by  regular 
assessments,  made  before  the  death  occurs,  instead  of  by  assess- 

1  In  re  National  Indemnity  and  En-       '  Statu  v.  Moore,  38  Oh.  St.  7. 
dowment    Co.,  142   Pa.  St.   450;   SI 
Atl.  Rep.  879. 


18  CHARTER   AND    CONSTITUTION. 

ments  made  upon  all  surviving  members  after  the  death  occurs. 
The  words  "  surviving  members,"  as  used  in  the  act,  are  the 
antithesis  of  deceased,  not  of  lapsed,  members;  and  "  assess- 
ments upon  surviving  members  "  are  assessments  to  meet  the 
loss  caused  by  the  death  of  a  member,  made  after  his  death, 
upon  those  members  who  survive  him.1 

§  10.  Certificate  of  incorporation — How  the  manner  of 
doing  business  should  he  set  forth. — A  substantial  com- 
pliance with  all  the  terms  of  a  general  law  for  the  incorpora- 
tion of  societies  is  a  prerequisite"  of  the  right  of  forming  a  cor- 
poration under  it.  The  articles  of  incorporation  must  contain 
everything  in  substance  which  is  prescribed  by  the  laws  under 
which  the  corporation  is  organized.2  Thus,  a  certificate  of  in- 
corporation setting  forth  that  "  the  manner  of  carrying  on  the 
business  shall  be  such  as  the  association  may,  from  time  to 
time,  prescribe  by  rules,  regulations  and  by-laws,  not  incon- 
sistent with  the  laws  of  the  state  "  is  not  in  compliance  with 
the  law  of  the  state,  which  requires  the  certificate  to  show 
"  the  manner  of  carrying  on  the  business  of  said  association."  ! 

§  11.  The  object  of  a  society  must  be  legal. — It  is  evi- 
dent that  the  law  will  not  sanction  the  incorporation  of  a  so- 
ciety for  an  illegal  purpose,  and  will  refuse  to  recognize  the  legal 
existence  of  any  such  society.  The  state  will  not  permit  those 
who  are  subject  to  its  laws  as  individuals  to  defy  them  as  mem- 
bers of  a  society  which  has  been  brought  into  existence  under 
its  laws.  Thus,  while  persons  may  undoubtedly  meet  and  form 
societies  for  the  purpose  of  effecting  the  modification  or  repeal 
of  some  obnoxious  and  oppressive  law,  still,  under  an  act  pro- 
viding for  the  incorporation  of  voluntary  societies,  a  corpora- 
tion may  not  be  formed  for  the  purpose  of  opposing  the  en- 
forcement of  other  acts,  or  of  agitating  for  their  repeal,  or  to 
influence  legislation,  or  to  give  immunity  to  convicted  parties 
by  paying  their  fines  for  them.  A  society  formed  to  oppose 
the  enforcement  of  the  liquor  laws  of  a  state  may  not  be  incor- 
porated.4 Where  the  object  of  an  incorporated  society  was  to 
fix  and  control  the  price  of  salt,  and  the  mode  in  which  this 
was  to  be  accomplished  was  by  the  manufacturers  of  salt  on  the 

1  Mutual  Ben.  Life  Co.  v.  Marye,  85  3  State  v.  Association,  29  Oh.  St.  399. 
Va.  643;  8  S.  East.  Rep.  481.  4  Detroit  Schuetzen  Band  v.  Verein, 

2MorawetzonCorp.,§§27  and  23.   44  Mich.  313. 


CHARTER    AND    CONSTITUTION.  19 

Syracuse  reservation  leasing  to  the  corporation  the  salt  blocks 
owned  by  them,  thus  giving  control  of  the  quantity  and  price 
to  the  society,  it  was  held  that  the  purposes  of  the  association 
were  in  violation  of  law,  and  that  those  concerned  in  it  were 
guilty  of  a  misdemeanor.1  The  object  of  a  society  was  declared 
to  be  "  to  unite  acceptable  young  people  in  such  a  way  as  to  en- 
dow each  with  a  sum  of  money,  not  to  exceed  $6,000,  to  be 
paid  at  marriage  or  endowment,  according  to  the  regulations 
adopted."  A  certificate  of  membership  in  such  a  society  pro- 
viding "  that  no  member  will  be  entitled  to  any  benefit  what- 
ever, who  marries  in  less  time  than  three  months  from  the 
date  of  his  certificate,"  and  that  "  every  member  who 
shall  have  been  in  good  standing  for  at  least  three  months 
prior  to  his  marriage  shall  be  entitled  to  $40  per  month 
upon  each  $1,000  named  in  his  certificate  for  each  whole 
month  of  his  membership,  provided  that  the  same  shall  never 
exceed  $3,000,  or  so  much  thereof  as  shall  be  realized  from 
one  marriage  assessment  of  all  the  members  of  this  class," — is 
not  a  marriage  brokerage  contract,  but  is  void  on  grounds  of 
public  policy,  as  operating  in  undue  restraint  of  marriage  by 
offering  an  inducement  for  its  indefinite  postponement.2 

§  12.  When  corporate  existence  may  not  be  attacked. — 
It  may  be  stated  as  a  general  rule  that  the  corporate  existence 
of  a  society  may  not  be  attacked  in  a  collateral  proceeding. 
Where  an  action  is  brought  on  a  written  certificate  of  mem- 
bership, sealed  with  the  company's  seal,  signed  by  its  president, 
and  duly  attested  by  its  secretary,  the  society  may  not  intro- 
duce evidence  showing  that  the  corporation  was  not  fully  or- 
ganized at  the  time  the  certificate  issued,  and  it  is  estopped  by 
its  own  deed  from  so  doing.3 

§  13.     The  doctrine  of  ultra  vires. — Cases  involving  the 

1  ( llancey  v.    Salt  Manfg.    Co.,    62  ton,  91    Ind.  202;  James  v.  Jellison, 

Barb.  395;    see  People  v.   (Jus  Trust  94  Ind.  292. 

Co..  130  III.  268.  3  Mutual  Aid  v.  Paine.  122  111.  625; 

!  White  v.  Equitable  Nuptial  Ben-  14  N.    East.  Rep.   42;   Hagerman  v. 

efit  Union,  76  Ala.  251;   see  also  In  Association,  25  Oh.   St.  186;  Hassel- 

re  Mutual  Aid  Association  for  Un-  man  v.  Company,  97  Ind.  365;  Meurer 

married  Persons,  15  Phil.  Repts.  625;  v.  Association.  95 Mich.  451; 54  X.W. 

In  re  Helping  Hand  Marriage  Asso-  Rep.  !!~>1:  Scheufler  v.  Qrand   Lodge, 

ciation,  15  Phil.  Repts.  644;  State  v.  45  Minn.  256;  47  N.W.  Rep.  799;   see 

Towle,  80  Me.  287;  11   At  1.  Rep.  195;  Traders'    .Mutual   v.    Stone,    9   Allen 

6  N.  Eng.  Rep.  460;  Chalfant  v.  Pay-  483. 


20  CHARTER   AND    CONSTITUTION. 

doctrine  of  ultra  vires  have  arisen  and,  doubtless,  will  arise  in 
litigation  upon  contracts  of  insurance  in  mutual  benefit  so- 
cieties, and  contracts  of  other  voluntary  societies,  but  a  full 
discussion  of  such  a  subject  is  beyond  the  scope  of  this  treatise. 
It  is  sufficient  here  to  say  that  there  are  two  lines  of  decisions. 
The  principle  laid  down  in  one  may  be  stated  as  follows : 
Where  it  is  a  simple  question  of  authority  to  contract,  arising 
either  on  a  question  of  regularity  of  organization,  or  of  power 
conferred  by  the  charter,  a  party  who  has  had  the  benefit  of 
the  agreement  can  not  be  permitted,  in  an  action  founded  upon 
it,  to  question  its  validity.  The  usurping  or  excess  of  cor- 
porate power  is  a  matter  to  be  complained  of  by  the  govern- 
ment, and  places  the  society  in  danger  of  a  judgment  of  ouster 
and  dissolution.  The  other  line  of  cases  permits  either  party 
to  the  contract  to  set  up  the  want  of  power  in  the  incorporated 
society  to  enter  into  such  a  contract — not  that  either  party 
stands  in  a  position  to  take  advantage  of  the  want  of  such 
powers,  but  on  grounds  of  public  policy;  and  the  defense  so 
set  up  is  regarded  as  the  defense  of  the  public,  not  that  of  the 
contracting  party  urging  it.  The  authorities  in  favor  of  each 
of  these  principles  might  be  multiplied  almost  indefinitely, 
though  the  current  of  the  latest  decisions  is  decidedly  in  favor 
of  the  proposition  as  first  above  laid  down.  It  is  proposed  to 
illustrate  the  opposing  principles  by  such  cases  only  as  have 
arisen  in  incorporated  voluntary  societies.1  A  mutual  benefit 
society  can  not  defend  against  a  suit  on  one  of  its  contracts 
of  life  insurance  upon  the  plea  of  ultra  vires,  when  it  has 
been  receiving  the  assessments  on  the  certificate  of  insurance.8 
A  societv  was  organized  under  the  law  of  Illinois  providing 
for  societies  "  for  the  purpose  of  furnishing  life  indemnity  or 
pecuniary  benefits  to  the  widows,  orphans,  heirs  or  relatives, 
by  consanguinity  or  affinity,  devisees  or  legatees  of  deceased 
members."  It  issued  a  certificate  of  membership  payable  to 
William  Blue,  who  was  in  no  wise  related  to  the  member,  Wm. 
R.  Bailey.  After  Bailey's  death,  Blue  brought  an  action 
on  the  certificate,  and  the  society  set  up,  as  a  defense,  its  ar- 
ticles of  incorporation  under  the  above  law;  that  plaintiff  was 
not  a  legatee  or  devisee  of  Bailey  and  not  related  to  him  by 

1  See  §§  158,  168.  s  Matt  v.  Society,  70  Iowa  455 ;  CO  N» 

W.  Rep.  799. 


CHARTER   AND    CONSTITUTION.  21 

affinity  or  consanguinity,  etc.  In  discussing  this  plea  the  su- 
preme court  of  Illinois  said  :  "  It  is  contended  that  all  persons 
not  named  in  the  act  are  prohibited  from  becoming  benefi- 
ciaries. It  will  be  observed  that  the  contract  involved  is  not 
absolutely  prohibited  by  statute.  All  that  can  properly  be 
claimed  is  that  it  was  not  expressly  authorized  by  the  statute. 
The  defendant  voluntarily  issued  the  policy,  it  received  the 
premiums,  and  Bailey  fully,  so  far  as  appears,  performed  all 
that  his  contract  required  him  to  do.  So  far  as  he  is  con- 
cerned, the  contract  is  an  executed  one.  Now,  upon  the  death 
of  Bailey,  when  the  defendant  is  called  upon  to  perform  its 
part  of  the  contract,  can  it  refuse,  and  defeat  a  recovery,  by 
claiming  that  the  contract  is  ultra  vires  f  We  think  the  law 
on  this  question  is  well  settled  that  such  a  defense  can  not  be 
made  availing.  Where  the  contract  has  been  fully  performed 
by  the  party  contracting  with  the  corporation,  and  the  corpo- 
ration has  received  the  benefit  from  such  contract,  it  can  not 
invoke  the  doctrine  of  ultra  vires  to  defeat  an  action  brouo-ht 
against  it  on  such  contract.1' '  An  act  authorized  the  onran- 
ization  of  societies  for  the  purpose  of  securing  certain 
benefits  "  to  the  family  or  heirs  of  any  member  upon  his 
death."  The  contract  of  insurance  showed,  in  the  answers  to 
interrogatories  in  the  application,  that  the  beneficiary  named 
in  the. certificate  of  membership  was  in  no  way  related  to  the 
member,  and  not  in  any  way  a  member  of  his  family,  and,  in 
the  certificate,  the  beneficiary  was  described  as  "  friend  of " 
the  member.  The  supreme  court  of  Michigan  held  that  the 
society  might,  in  an  action  on  the  certificate,  set  up  as  a  de- 
fense the  want  of  insurable  interest  in  the  beneiiciai-y,  and 
said:  "The  association  issued  this  certificate  under  circum- 
stances which  most  strongly  call  upon  the  courts  to  enforce 
performance  of  its  agreement,  if  certain  imperative  rules  of 
public  policy  do  not  forbid.  The  defense  set  up  in  this  case 
must  be  considered  as  that  of  the  public,  and  not  that  of  the 
defendant,  as  it  stands  in  no  position  to  interpose  such  a 
defense.'" 

1  Bloomington  Mutual  v.  Blue,  120       9  Mutual    Ben.  Ass'n  v.    Hoyt,  46 
III.    121;  11   N.  E.   Rep.    331;  24  111.    Mich.  47:3;  9N.  W.  Rep.  497. 
App.    518;  Martin  v.  StubbingB,    126 
111.    387;    18  N.    East  Rep.    657;    see 
§  178,  191. 


22  CHARTER    AND    CONSTITUTION. 

Although  a  certificate  of  membership  in  a  mutual  benefit  so- 
ciety contain  the  name  of  a  creditor  of  the  member  as  benefi- 
ciary, in  violation  of  the  law  authorizing  such  societies  to  issue 
certificates  for  the  benefit  of  widows,  orphans,  or  dependents 
of  members,  yet,  where  the  certificate  recognizes  that  there 
may  be  a  change  or  substitution  of  such  beneficiaries,  and 
provides  that,  in  case  the  member  survives  all  the  original  or 
substituted  beneficiaries,  the  insurance  shall  be  for  the  benefit 
of  the  heirs  of  the  insured,  the  administrator  of  the  insured 
may  maintain  an  action  on  such  certificate,  although  the  pe- 
tition avers  that  the  action  is  for  the  benefit  of  the  creditor.' 
The  opinion  in  the  case  holding  this  doctrine  makes  one  or  two 
valuable  suggestions  as  to  the  application  of  the  doctrine  of 
ultra  vires  to  contracts  of  mutual  benefit  societies.  In  this 
opinion  it  is  said :  "  The  designation  of  beneficiaries  in  the 
policy  or  certificates  of  membership  is  invalid,  as  the  statutes 
under  which  the  defendant  corporation  was  organized  did  not 
authorize  it  to  grant  insurance  for  the  benefit  of  friends.  But 
an  invalid  designation  of  beneficiaries  does  not  render  the 
whole  contract  invalid.  The  contract  in  terms  recognizes  that 
there  may  be  a  change  or  substitution  of  beneficiaries,  and 
there  is  a  provision  that,  if  the  member  shall  survive  all  origi- 
nal or  substituted  beneficiaries,  then  his  membership  shall  be 
for  the  benefit  of  his  legal  heirs.  *  *  *  If  there  is  no  other 
legal  designation,  this  may  take  effect.  The  defendant  contends 
that  the  declaration  avers  that  the  action  is  brought  for  the 
benefit  of  (the  creditor  named  in  the  certificate),  and  there- 
fore that  the  action  can  not  be  maintained.  This  objection 
can  not  be  supported.  If  the  plaintiff  (the  administrator)  re- 
ceives the  money,  it  will  be  a  good  discharge  to  the  d Pendant 
of  its  liability;  and  the  defendant  will  not  be  respom  ib'.e  for 
the  proper  application  of  the  money  by  the  plaintiff.  Ic  is  to 
be  assumed,  at  this  stage  of  the  proceedings,  that  he  will  dis- 
pose of  the  funds  properly;  and  he  may  be  compelled  to  do  so 
by  judicial  proceedings,  to  which  the  defendant  would  not  be 
a  necessary  party.  The  averment  that  the  action  is  brought 
for  the  benefit  of  (the  creditor)  is  unnecessary,  and  may  be  dis- 
regarded. " 

A  society  in  its  charter  declared  its  object  to  be  "  for  the 

1  Rindge  v.  New  England  Mut.  Aid  Soc,  146  Mass.  286;  15  N.  E.  Rep.  628. 


CHARTER   AND    CONSTITUTION.  23 

general  purpose  of  improvement  and  welfare  of  the  members 
and  others,  and  for  the  particular  object  of  mutual  relief  of 
the  members  of  the  association  in  time  of  sickness  and  dis- 
tress." It  was  held  that  under  this  charter  the  society  might 
properly  carry  on  a  system  of  mutual  benefit  insurance,  and 
make  the  widows  of  deceased  members  the  beneficiaries  of  the 
fund  raised  by  assessment  upon  its  members.1 

A  society  provided  in  its  charter :  "  The  business  of  said 
association  shall  be  to  afford  relief  to  the  widows  and  children 
of  its  deceased  members,  and  to  such  business  it  shall  be  lim- 
ited and  restricted."  A  member  became  insured  in  the  society, 
designated  his  wife  as  his  beneficiary,  and  provided  in  the 
designation  that  his  children  should  take  the  fund  if  he  should 
survive  his  wife.  He  became  indebted  to  the  society  in  a  large 
amount  for  money  loaned  him,  and,  by  agreement  between 
himself  and  the  society,  made  a  new  designation  "as  per 
assignment  attached,  and  balance,  if  any,  to  my  wife  *  *  * 
and,  in  case  she  be  dead,  to  my  children."  The  assignment 
attached  was  to  the  society  to  secure  his  indebtedness  to  it. 
Afterward  the  member  died  in  good  standing  as  such.  The 
supreme  court  of  Wisconsin  held  that  his  children,  the  wife 
being  dead,  were  entitled  to  the  whole  fund,  and  that  the  loan 
of  money  by  the  society  was  in  excess  of  its  corporate  powers 
and  void.  Ryan,  C.  J.,  dissented  as  to  the  ground  upon  which 
the  decision  was  placed,  and,  upon  the  question  of  the  validity 
of  the  loan,  held  that  a  corporation  may  employ  the  corporate 
property,  when  it  would  otherwise  be  lying  idle  and  profitless, 
for  such  purposes  as  are  not  alien  to  its  primary  business,  may 
rent  its  waste  lands,  invest  its  unemployed  capital,  and 
place  its  money  at  deposit  account,  citing  Brice  on  Ultra 
Vires,  68.  He  further  says:  "If  the  insurance  of  the 
husband  for  the  benefit  of  his  wife  and  children  were  sub- 
ject to  his  control,  the  corporation  could  lend  its  money 
to  him  or  for  his  benefit,  and  take  security  on  the  con- 
tract of  insurance.  Whether  the  husband  had  such  control, 
seems  to  be  the  controlling  question  in  this  case."  * 

A  society  organized  for  the  purpose  of  aiding  and  assisting 
the  widows,  orphans,  heirs  or  devisees  of  deceased  members, 

1  Gundlach  v.  Germania  Mechanics       5  Dietrich  et  al.  v.  Relief  Associa- 
Ass'n,  49  How.  Pr.  190.        .  tion,  45  Wis.  79. 


24  CHARTER   AND    CONSTITUTION. 

under  a  law  providing  that  "  the  members  shall  receive  no 
money  as  profit  or  otherwise,"  may  not  contract  with  a  mem- 
ber for  the  payment  of  a  certain  sum  of  money  to  him  upon 
his  arriving  at  the  age  of  seventy  years.  Upon  this  subject 
the  court  said  :  "  To  permit  the  society  to  contract  to  pay  to 
one  of  its  members  upon  his  arriving  at  seventy  years  of  age, 
or  after  he  has  been  a  member  in  good  standing  for  twenty- 
five  consecutive  years,  a  sum  of  money  as  profits  upon  his  in- 
vestments in  the  society,  would  be  in  fraud  of  the  charter 
upon  which  it  depends  for  existence,  would  virtually  nullify 
and  abrogate  the  wholesome  statutes  enacted  for  the  purpose 
of  regulating  the  business  of  life  insurance  companies,  would 
set  at  naught  the  legislative  intent,  and  be  in  conflict  with  the 
public  policy  of  the  state.  Appellee  is  not  a  stranger  to  the 
corporation,  but  is  himself  a  member  of  the  society,  and  as 
such  is  chargeable  with  full  knowledge  and  notice  of  its  char- 
ter powers  and  of  the  requirements  and  prohibitions  of  the 
statute  under  which  it  is  organized."  ' 

Where  an  incorporated  society  admits  an  ineligible  person 
to  membership,  the  corporators  are  not  bound  by  the  illegal 
act,  and  the  society  is  not  liable  to  such  member  for  benefits.2 

An  incorporated  church  may  not,  as  a  corporation,  engage  in 
the  sale  of  tickets  to  the  public  for  an  excursion  on  board  a 
steamer  which  the  church  has  chartered  for  the  occasion. 
Expenses  incurred  with  a  view  of  profit,  and  profits  lost,  can 
not  be  recovered  from  the  owners  of  the  vessel  on  their  failure 
to  make  the  stipulated  voyage.     Excursions  as  matter  of  trade 

1  Canton  Benevolent  Soc.  v.  Eock-  by  statute.  All  that  can  properly  be 
hold,  28  111.  App.  141.  In  this  case  claimed  is,  that  it  was  not  expressly 
the  court  further  says  :  "  The  present  authorized  by  the  statute.'  Here,  the 
case  is  not  governed  by  and  is  easily  charter  of  the  appellant  society  con- 
distinguished  from  the  case  of  Bene-  tains  an  absolute  prohibition  against 
fit  Association  v.  Blue,  120  111.  121,  the  character  of  benefits  sought  to 
relied  upon  by  appellee.  There,  the  be  recovered,  and  the  language  of 
statute  did  not  forbid  the  contract  the  statute  is,  '  the  members  shall  re- 
which  was  then  under  consideration ;  ceive  no  money,  as  profits  or  other- 
here,  the  statute  does  forbid  the  wise.'  "  See  Rockhold  v.  Canton  Ma- 
con tract  now  in  question.  There  the  sonic  Mut.  Ben.  Soc,  128  111.  440;  21 
court  said:  '  It  is  contended  that  all  N.  East.  Rep.  794;  affirming  26  111. 
persons  not  named  in  the  act  are  pro-   App.  141. 

hibited  from  becoming  beneficiaries.       2  Fitzgerald  v.  Association,  69  Hun 
It  will  be  observed,  that  the  contract   532;  23  N.  Y.  Supp.  647. 
involved  is  not  absolutely  prohibited 


CHARTEK    AND    CONSTITUTION.  25 

or  business  with  the  public  are  not  within  the  means  or  ends 
for  which  the  church  was  incorporated.  The  measure  of 
recovery,  in  a  suit  by  the  church  against  the  owners,  is  the 
amount  which  has  been  paid  as  hire  for  the  vessel.1  AVhere 
the  charter  of  a  society  restricts  its  membership  to  persons 
under  the  age  of  fifty  years,  the  society  has  no  power  to 
authorize  the  admission  of  members  over  that  age,  and  there 
can  be  no  waiver  of  this  qualification.2  A  Masonic  lodge 
loaned  a  sum  of  money,  and  afterward  brought  suit  to  enforce 
its  collection.  The  court  held  that  there  could  be  no  recovery; 
that  where  the  charter  confers  upon  a  society  no  power  to 
lend  money,  and  the  society  lends  money  without  authority 
under  its  charter  and  takes  a  promissory  note  to  secure  the 
repayment,  the  contract  is  void.  The  court  said  :  "  Xo  action 
to  enforce  the  contract,  whatever  form  the  pleaders  skill  may 
ffive  it,  can  be  maintained."  3 

§  14.  The  constitution  of  a  society. — The  articles  of  asso- 
ciation of  an  unincorporated  society  bear  the  same  relation  to  it 
that  a  charter  bears  to  an  incorporated  society.  They  regulate 
the  duties  of  its  officers,  and  the  duties  and  obligations  of  its 
members  among  themselves,  and  define  the  scope  of  its  busi- 
ness.4 These  articles  of  association  are  commonly  called  the 
constitution  of  the  society,  and  such  constitution  is  its  funda- 
mental law,  and  must  govern  its  members  in  all  things.  All 
by-laws,  rules  and  regulations  must  be  passed  in  conformity  with 
its  provisions,  and  must  not  be  in  any  wise  in  conflict  with 
them.5  The  constitution  adopted  by  a  mutual  benefit  society 
lor  the  government  of  its  subordinate  lodges  is  the  fundamen- 
tal and  organic  law  of  each  lodge  in  all  its  social  and  fraternal 
relations,  and  from  it  the  lodge  derives  all  its  powers  and  rights 
as  a  subordinate  part  of  the  society.6  The  constitution  of  an 
incorporated  society  is,  however,  of  no  greater  force  or  dignity 
than  its  by-laws;  in  fact  it   is   nothing  more  than  a  series   of 

1  Harrinan  et  al.  v.  Baptist  Church,  4Bray  v.  Farwell,  81  N.  Y.  600. 

63  <  ia.  186.  6  Powell  v.  Abbott,  9  Weekly  Notes 

sLuthe  v.  Farmer's  M.  F.  Ins.  Co.,  of  Cases,  281. 

55  Wis.  543:  see  Smith  v.  Pinch,  80  8  Chamberlain  v.  Lincoln,  129  Maes. 

Mich.  332:  Morrison  v.  Odd  Fellows,  70  ;  District  Grand  Lodge  v.  Cohn,  20 

59  Wis.  162;  McCoy  v.  Ins.  Co.,  152  111.  App.  335. 
Mass.  272:  25  N.  East.  Rep.  289. 

3  Grand  Lodge  F.  &  A.  M.  v.  Wad- 
dill,  36  Ala.  313. 


26  CHARTER    AND    CONSTITUTION. 

by-laws  under  another  name.  Such  a  society  has  inherent  power 
to  pass  laws  for  its  internal  government  and  regulation,  and 
though  it  may  pass  two  codes  of  laws,  calling  one  its  constitu- 
tion and  one  its  by-laws,  they  are  the  creatures  of  the  same 
power,  brought  into  being  for  the  same  purpose  and  are  essen- 
tially the  same.  It  may  be  that,  by  the  provisions  of  its  laws, 
such  a  society  may  give  to  the  code  called  the  constitution,  a 
greater  importance  in  its  legislative  and  administrative  affairs 
than  it  attaches  to  its  by-laws,  but  essentially  its  constitution 
is  not  superior  to  its  by-laws.1 

§  15.  Concerning  the  incorporation  of  an  unincorporated 
society. — "Where  an  existing  unincorporated  society  is  char- 
tered, and  its  constitution  is  expressly  recognized  by  the  charter, 
such  constitution  thereby  becomes  practically,  by  reference,  a 
part  of  the  charter.2  Where  an  unincorporated  mutual  benefit 
society  procures  a  charter  of  incorporation,  and,  by  a  vote  of 
the  incorporated  society,  all  members  of  the  voluntary  associa- 
tion are  made  members  of  the  incorporated  society  without 
new  applications,  this  is  a  reinsurance  of  the  life  of  such  mem- 
bers, on  their  original  applications  in  the  incorporated  society. 
It  is  a  mere  continuation  of  the  contract  of  insurance  entered 
into  by  and  between  the  associates,  in  which  the  incorporated 
society  takes  the  place  of  the  first  society.  The  members  so 
admitted  into  the  new  society  have  no  greater  rights  against 
it,  under  their  contracts  of  insurance,  than  they  had  against 
the  first  society,  and  any  fact  which  rendered  the  contract  in- 
valid, as  against  the  first  society,  furnishes  a  good  defense  for 
the  new  society  to  an  action  upon  it.  In  other  words,  an  in- 
valid contract  with  an  unincorporated  society  is  not  made  valid 
by  the  incorporation  of  the  members  thereof,  and  the  assump- 
tion by  that  corporation  of  the  contracts  of  the  unincorporated 
society.3 

The  legislature  has  no  authority  to  compel  any  persons  or 
society  to  become  incorporated  without  its  assent.  No  one 
can  become  a  member  of  any  private  corporation  without  tak- 
ing some  steps  for  that  purpose,  nor  does  any  existing  society 
become  absorbed  or  merged  in  any  new  corporation,  so  as  to 

'Supreme  Lodge  v.  Knight,  117  3  Swett  v.  Citizens  Mutual  Relief  So- 
Ind.  489 ;  20  N.  East.  Rep.  479.  ciety,  78  Me.  541;  7  Atl.  Rep.  394. 

"  Pulford  v.   Fire  Department,   31 
Mich.  458. 


CHARTER   AND    CONSTITUTION.  27 

relinquish  its  former  condition,  without  some  action  fully 
authorizing  such  a  result.  The  membership  of  a  corporation 
can  not  be  increased  by  joint  accessions  without  some  action 
denoting  unanimous  consent;  and  one  member  of  an  unincor- 
porated society  can  not  be  made  a  corporator  in  a  different  so- 
ciety or  corporation  by  the  action  of  other  members  not  within 
the  terms  of  their  original  compact;  and  a  portion  of  the  mem- 
bers of  an  unincorporated  society  can  not,  therefore,  without 
unanimous  consent,  or  some  action  of  such  society,  or  some 
provision  of  its  articles,  authorizing  it,  organize  a  corporation 
under  a  statute,  which  shall  swallow  up  the  society  and  thereby 
acquire  title  to  its  property,'  nor  can  acquiescence  in  the  claim 
of  the  corporation,  that  it  is  identical  with  such  society,  in  the 
absence  of  any  circumstances  creating  an  estoppel,  operate  to 
extinguish  the  separate  existence  of  the  latter.  Acquiescence 
by  such  society  or  its  officers  will  not  bind  the  members;  noth- 
ing short  of  a  complete  cessation  of  its  action  will  tend  to 
prove  acquiescence  in  a  corporate  merger.  A  Masonic  lodge 
which  was  in  existence  before  the  organization,  under  the 
statute,  of  a  corporation  of  the  same  name,  and  which  had 
never  by  any  action  authorized  or  recognized  the  corporation 
as  formed  in  the  same  behalf,  and  where  each  had  been  dis- 
tinct in  meetings,  officers,  property  and  other  incidents,  and 
not  even  identical  in  membership,  is  not  merged  in  the  corpo- 
ration.2 A  dissatisfied  minority  of  an  unincorporated  society 
can  not,  by  procuring  a  charter  of  incorporation,  acquire  the 
right  to  the  management  of  its  property  in  opposition  to  the 
will  of  the  majority  of  those  interested.3 

When  an  unincorporated  society  becomes  incorporated  and 
the  new  society  assumes  and  agrees  to  pay  all  the  obligations 
and  Liabilities  of  the  old  association,  whether  accrued  or  to 
accrue,  recognizes  the  members  of  the  old  association  as  its 
members,  and  accepts  assessments  from  them,  a  complete 
novation  of  the  contracts  of  the  old  association  is  effected,  and 
the   new  society  is   primarily  liable  upon   the  contracts   so 

'Mason  v.   Finch,   28  Mich.   282;  21  Abb.  N.  C.  99;  McGlynnv.Post,21 

Henry  v.  Deitrich,  84  Pa.  St.  286.  Abb.  N.  C.(N.  Y.)  it7:    McFadden   v. 

*  Mason  v.  Finch,  28  Mich.  282.  Murphy,  149  Mass.  341;  21    N.  East. 

8  Henry  v.  Deitrich,  84  Pa.  St.  286;  Rep.  868;  see  §  134. 
Black  Rabbit  Association  v.  Munday, 


28 


CHARTER   AND    CONSTITUTION. 


assumed  by  it.1  An  act  of  the  legislature,  by  which  the  mem- 
bers of  several  mutual  insurance  companies  are  made  a  new 
corporation,  and  which  is  to  take  effect  "when  accepted  by 
the  members  of  said  corporations,"  does  not  constitute  a  mem- 
ber of  one  of  the  old  companies  who  does  not  assent  to  it,  a 
member  of  the  new  corporation,  although  the  act  be  duly 
accepted  by  a  majority  of  the  members  of  each  of  the  old 
companies.2  The  executive  board  of  an  unincorporated  society 
may  not  convert  it  into  a  corporation,  unless  the  power  is 
conferred  on  it  by  the  constitution  and  by-laws,  or  by  an  ex- 
press resolution  of  the  society.  And  it  is  necessary  that  a 
meeting  to  ratify  the  action  of  such  a  board  which  has  ex- 
ceeded its  powers  in  incorporating  the  society,  be  called  by 
competent  authority,  and  that  the  members  at  large  be  noti- 
fied of  the  meeting  and  its  purpose.'  Members  of  an  unincor- 
porated society,  who  have  incorporated  themselves  under  its 
name  without  its  consent,  may  be  enjoined  from  using  that 
name/ 


1  Burns  v.  Grand  Lodge,  153  Mass. 
173;  26  N.  East.  Rep.  443;  Bank  v. 
Mathews.  98  U.  S.  621;  Whitney  v. 
Wyman,  101  U.  S.  392:  Kelley  v.  Rail- 
road, 141  Mass.  496;  6  N.  East.  Rep. 
745;  Hart's  Case,  1  Ch.  Div.  307-317; 
Dowse' s  Case,  3  Ch.  Div.  384;  Brewer 
v.  Dyer,  7  Cush.  337. 

2  Hamilton  Mutual  v.  Hobart,  2 
Gray  (Mass.)  543. 

3  Rudolph  v.  Southern  Beneficial 
League.  7  N.  Y.  Supp.  135. 

4 Rudolph  v.  Southern  Beneficial 
League,  supra;  Black  Rabbit  Asso- 
ciation v.  Munday,  supra;  McGlynn 
v.  Post,  supra. 

Where  a  number  of  persons  seek 
to  incorporate  under  an  act,  they 
must  in  good  faith  comply  with  its 
provisions:  and  where  a  public  officer, 
whose  duty  it  is  to  pass  upon  appli- 
cations, refuses  to  issue  a  certificate 
of  incorporation  on  the  ground  that 
certain  requirements  of  the  law  have 
not  been  fulfilled  in  good  faith,  man- 
damus will  not  lie  to  compel  him 
to  issue  such   certificate,   since  his 


duties  are  judicial  in  their  nature. 
In  re  Schmitt,  10  N.  Y.  Supp.  583; 
People  v.  Barnes,  114  N.  Y.  317;  20 
N.  East.  Rep.  609;  21  N.  East.  Rep. 
739.  It  was  held  in  Massachusetts 
that,  where  it  was  the  duty  of  the 
commissioner  to  pass  upon  the  ques- 
tion whether  a  name  applied  for  by 
persons  seeking  incorporation  was  so 
similar  to  any  corporate  name  pre- 
viously in  use  as  to  be  liable  to  be 
mistaken  for  it,  it  must  be  assumed 
that  the  commissioner  will  do  his 
duty  and  is  competent  to  form  a 
judgment  on  the  question.  The 
court  refused  to  prohibit  him  by  in- 
junction from  issuing  a  charter  to  a 
corporation  under  a  very  similar  name 
to  that  of  the  corporation  applying 
for  the  writ.  It  was  also  held  that 
private  parties  could  not  be  prohib- 
ited from  applying  to  him  for  incor- 
poration under  a  certain  name,  in 
the  manner  expressly  authorized  by 
statute.  American  Order  v.  Merrill 
et  al.,  151  Mass.  558;  24  N.East.  Rep. 
918;  see  Gregg  v.  Society,  111  Mass. 


CHARTER    AND    CONSTITUTION. 


20 


185.  The  court  further  held  that  a 
corporation  is  not  entitled  to  have  its 
name  protected  as  a  trade  mark  as 
against  a  corporation  with  a  very 
similar  name,  organized  under  the 
same  act,  since  the  degree  of  pro- 
tection to  which  it  is  entitled  is 
measured  by  the  rights  which  that 
act  confers  upon  it,  and  the  limit  is 
marked  by  the  adjudication  of  the 
commissioner.  See  Manfacturing 
Co.  v.  Nairn,  7  Ch.  Div.  834;  In  re  J. 
B.  Palmer's  Trade  Mark,  24  Ch.  Div. 
504.  517,  521;  In  re  Ralph's  Trade 
Mark,  25  Ch.  Div.  194,  199;  Coats  v. 
Thread  Co.,  36  Fed.  Rep.  324.  When 
there  are  no  statutory  provisions  as  to 
the  choice  of  names,    and  parties  or- 


ganize a  corporation  under  general 
laws,  it  may  be  that  they  choose  the 
name  at  their  peril,  and  that,  if  they 
take  one  so  like  that  of  an  existing 
corporation  as  to  be  misleading,  and 
thereby  to  injure  its  business,  they 
may  be  enjoined  if  there  is  no  lan- 
guage in  the  statute  to  the  contrary. 
Holmes  v.  Manufacturing  Co.,  37 
Conn.  278;  New  by  v.  Railway  Co., 
Deady,  609;  Celluloid  Manuf'g  Co.  v. 
Cellonite  Manuf'g  Co.,  32  Fed.  Rep. 
94.  97.  But  these  decisions  do  not  ap- 
ply to  a  case  where  the  plaintiff  and 
defendant  both  get  their  names  un- 
der a  statute  requiring  such  an  adju- 
dication by  a  commissioner. 


CHAPTEK  III. 

BY-LAWS. 

§  16.  Inherent  power  of  societies  to  pass  by-laws. 

17.  Generally. 

18.  When  by-laws  are  binding  on  members. 

19.  By-laws  must  be  legal. 

20.  By-laws  must  be  consistent  with  the  charter. 

21.  By-laws  of  unincorporated   society    must  be    consistent   with   its 

constitution. 

22.  By-laws  of  unincorporated  society  must  not  be  illegal. 

23.  By-laws  of  an  incorporated  society  must  be  reasonable  and  neces- 

sary. 

24.  25,  26,  27.     Alteration,  amendment  and  suspension. 
28.     Repeal  of  by-laws. 

§  16.     Inherent  power  of  societies  to  pass  by-laws. — An 

incorporated  society  has  inherent  power  to  make  such  by-laws, 
rules  and  regulations  as  may  be  necessary  to  carry  its  charter 
into  effect,  and  to  accomplish  the  purposes  for  which  it  was 
organized.1  A  grant,  in  general  terms,  of  the  power  to  make 
such  by-laws  is  usually  contained  in  the  organic  law  of  the  so- 
ciety, or  in  the  charter  founded  upon  it,  but  it  is  by  no  means 
necessary,  and  adds  nothing  to  the  inherent  power  of  the  so- 
ciety in  that  regard.2  An  unincorporated  society,  however, 
exists  by  agreement  of  its  members,  and  a  majority  has  only 
such  powers  as  are  conferred  by  the  articles  of  association. 

1  See  §  114.  for  the  better  government  of  thecor- 

2  "  After  a  corporation  is  so  formed  poration;  which  are  binding  upon 
and  named,  it  acquires  many  pow-  themselves,  unless  contrary  to  the 
ers,  rights,  capacities  and  incapaci-  laws  of  the  land,  and  then  they  are 
ties,  which  are  next  to  consider,  void.  This  is  also  included  by  law 
Some  of  these  are  necessarily  and  in-  in  the  very  act  of  incorporation:  for, 
separably  incident  to  every  corpora-  as  natural  reason  is  given  to  the 
tion;  which  incidents,  as  soon  as  a  natural  body  for  the  governing  it, 
corporation  is  duly  erected,  are  tac-  so  by-laws  or  statutes  are  a  sort  of 
itly  annexed  of  course.  As,  *  *  *  political  reason  to  govern  the  body 
to  make  by-laws  or  private  statutes  politic."     1  Blackstone's  Com.  475. 

(30) 


BY-LAWS.  31 

Such  a  society  has  no  inherent  powers.  If  no  provision  of  the 
contract  of  association  gives  to  the  majority  of  the  members 
the  right  to  alter  and  amend  such  contract,  the  majority  has 
no  power  of  legislation  over  the  minority,  and  changes  and 
additions  may  be  made  only  by  unanimous  consent.  For  this 
reason  the  articles  of  association  usually  confer  upon  the  ma- 
jority, or  two-thirds  of  the  members,  the  power  to  legislate  for 
the  general  interests  of  the  society,  and  provide  how,  and 
when,  the  constitution  and  by-laws  may  be  altered  and 
amended. 

§17.  Generally. — A  by-law  may  be  defined  to  be  a  rule 
of  a  permanent  character,  adopted  by  a  society  for  its  internal 
government,  and  obligatory  upon  all  its  members.1  A  reso- 
lution, which  prohibits  one  particular  officer  of  the  society 
from  inspecting  its  books,  can  not  be  called  a  by-law.2  A  by- 
law of  an  incorporated  society  must  be  general  in  its  character 
and  apply  to  all  members  alike.  If  it  is  invalid  as  to  one 
member,  it  is  invalid  as  to  all.  It  must  stand  on  its  own 
validity,  and  it  may  not  be  shown,  as  sustaining  its  validity, 
that  a  dispensation  was  granted  to  a  member  against  whom  it 
was  invalid,  exempting  him  from  its  provisions,  and  that  all 
the  other  members  of  the  society  assent  to  it,  and  are  willing 
to  be  bound  by  it.  A  member  of  such  a  society  can  not  be 
subjected  to  any  conditions  which  do  not  apply  to  all  alike, 
and  can  not  be  compelled  to  receive  immunity  from  a  by-law, 
as  a  matter  of  grace,  when  he  is  not  bound  by  it  as  a  matter 
of  right.  Upon  the  other  hand,  it  is  unjust  to  the  other  mem- 
bers that  there  should  be  personal  exemptions  of  a  general 
nature  from  any  valid  regulations  which  bind  the  mass  of  the 
corporators.3  An  incorporated  mutual  benefit  society  can  not 
ignore  its  by-laws,  and  lawfully  contract  with  a  particular 
member  for  life  insurance  on  a  different  plan  or  basis  than  that 
which  ;i lilies  to  all  other  members.*  Where  a  by-law  is  a 
mere  rule  of  conduct  in  its  business  affairs,  imposed  on  itself 
by  the  society  for  its  own  benefit  and  convenience,  it  may  he 
disregarded  by  its  officers.6     Where  the  by-laws  declared  that 

1  Waterman  on  Corp.  §  72;  I  rrant  on       4Clevenger  v.  Mutual  Life,  2  Dak. 
Corp.  76.  114. 

2  People  v.  Throop,  12  Wend.  187.  6Hale  v.    Ins.  Co.,   32  N.  H.   895; 
;  People    r.r     r<l.     v.     .Benevolent   Union  Mutual    \.     Keyser,  82  N.  H. 

Society,  41  Mich.  69.  313.     As  a  general  rule,   corporations 


32  BY-LAWS. 

clerks  should  hold  their  offices  during  the  pleasure  of  the 
board  of  directors,  it  was  held  that  the  board  might  employ 
a  clerk  for  a  year,  and  bind  the  company  by  such  employ- 
ment.1 If  the  charter  prescribe  the  mode  in  which  the 
by-laws  shall  be  made  and  adopted,  in  order  to  their  validity, 
that  mode  must  be  strictly  pursued.  But  where  the  charter 
is  silent  upon  this  point,  it  may  adopt  its  by-laws  in  any  man- 
ner it  may  prescribe.  When  the  mode  of  electing  corporate 
officers  is  not  prescribed  by  charter,  it  may  be  wholly  ordained 
by  by-laws.  If  a  mutual  benefit  society  be  composed  of  sepa- 
rate bodies,  whether  co-ordinate  or  subordinate,  the  by-laws 
and  rules  of  the  society  for  the  management  of  its  internal 
affairs,  and  for  the  adjustment  of  the  relations  between  its 
branches,  constitute  the  law  by  which  they  should  be  governed. 
It  is  a  general  rule  that  the  by-laws  of  a  society  are  binding 
upon  no  one  except  its  officers  and  members,  but  where  a  per- 
son who  deals  with  a  society  is  acquainted  with  the  methods 
of  doing  business  pointed  out  in  its  by-laws  for  its  govern- 
ment, he  is  presumed  to  have  contracted  with  reference  to 
them,  and  is  bound  by  them.2  A  third  person,  not  a  member 
of  the  society,  can  only  claim  rights  under  its  by-laws  by  show- 
ing that  he  entered  into  a  contract  based  upon  them  and  with 
reference  to  them.3  A  by-law  adopted  at  a  meeting  at  which  a 
quorum  is  not  present  is  invalid.4 

.  The  by-laws  of  mutual  benefit  societies  should  be  construed 
liberally,  and  with  a  view  to  effectuate  the  benevolent  pur- 
poses of  their  organization.  "Where  there  is  any  ambiguity  or 
inconsistency  in  the  terms  of  such  by-laws,  that  construction 
should  be  given  to  them  which  is  most  favorable  to  the  rights 
of  the  member.  It  is  for  the  court  to  decide  whether  it  is 
within  the  power  of  the  society,  under  the  express  or  implied 
terms  of  its  charter,  to  pass  a  given  by-law.5  "Whether  a  by- 
law is  reasonable,  or  not,  is  for  the  court  to  determine,  and 
evidence  to  the  jury  on  that  question  is  inadmissible.6     If  part 

have    power  to  waive  their    rights,  3  Flint  v.  Pierce,  99  Mass.  68. 

and  are  bound  by  estoppels  in  pais,  4Lockwood  v.  Bank,  9  R.  I,  308. 

like  natural  persons.  5  State  v.  Overton,  24  N.  J.  L.  440. 

1  Martino  v.     Ins.    Co.,  47  N.   Y.  *  Commonwealth    v.  Worchester,  3 
Super.  Ct.  520.  Pickering  (Mass.)  461. 

2  Cummings    v.   Webster,   43  Me. 
192;  see  §  97. 


BY-LAWS.  66 

of  a  by-law  is  void,  and  the  whole  forms  an  entirety,  so  that 
the  part  which  is  void  influences  the  whole,  the  entire  by-law 
is  void.  The  principle  that  a  by-law  may  be  void  in  part,  and 
valid  in  part,  applies  only  when  the  respective  portions  are 
wholly  independent  of  each  other.1  It  is  sometimes  said  that 
by-laws  need  not  necessarily  be  in  writing,  but  may  be  adopted 
bv  loner-continued  and  invariable  custom.  It  must  be  remem- 
bered,  however,  that  custom  may  not  take  the  place  of  a  by- 
law, but  that  it  may  be  resorted  to  merely  as  evidence  of  the 
adoption  of  a  by-law.  Xo  custom  or  usage  is  shown,  which  af- 
fords any  evidence  of  the  adoption  of  an  unwritten  law,  where 
it  appears  only  that  the  society,  in  a  particular  matter,  has 
been  accustomed  to  act  in  a  particular  manner,  but  where  it 
does  not  appear  when,  how  long,  or  to  what  extent,  such  cus- 
tom has  been  pursued,  or  whether  it  has  been  uniform,  or  only 
adopted  in  particular  instances.  Such  a  custom  will  not  be 
construed  into  a  by-law.  "Where  a  society  has  expressly 
adopted  a  code  of  by-laws,  other  by-laws  will  not  be  implied 
from  custom  or  usage.  The  adoption  and  promulgation  of  a 
code  of  by-laws,  in  the  ordinary  way,  by  an  express  vote  of 
the  members  of  a  society,  exclude  the  possibility  of  construing 
additional  by-laws  from  the  mere  customs  or  modes  of  pro- 
cedure which  the  society  may  see  fit  to  adopt  in  the  adminis- 
tration of  its  affairs.2  Unless  otherwise  provided,  the  power 
to  make  by-laws  is  in  the  members  of  the  society  at  large,  but 
it  may  be  delegated  to  the  board  of  directors.  By-laws  must 
be  produced  in  evidence  to  show  what  they  are,  and  what 
power  and  authority  they  confer,  and  an  officer  of  the  society 
may  not  be  permitted  to  testify  as  to  these  matters.3  They 
may  be  proved  by  printed  copies  known  to  and  accepted  by 
the  member  against  whom  it  is  sought  to  enforce  them.1 

g  is.  When  by-laws  are  binding  on  members. — By-lawsare 
subject  to  certain  laws  wtocb  are  set  forth  in  detail  in  this  chap- 
ter.    Subject  to  these  laws,  the  by-laws  of  an  incorporated 

1  Angell  and  Amos  on   Corp.  ^  358;  '  District  Grand  Lodge  v.  Colin.  20 

State  v.  Curtis,  9  Nev.    825;  King  v.  111.  App.  335;  Bee  Wahn  v.  Bank,  8 

Stewart,  8  T.  R.  856;   Amesbury  v.  Serg.  A:  Ra-wle,  78. 

Bowditch    Mutual,    6  Gray   (Mass.)  "Lumbard   v.   Aldrich, 8  N.  H.  81. 

596;  Rogers  v.  Jones,  1  Wend.  (N.  Y.)  4  Atlantic   Mutual   v.  Saunders,  36 

238;  Supreme  C  mneil  v.  Forsinger,  N.  II.   252;  Mutual  Ins.  Co.  v.  Bratt, 

125  Ind.  52;  23  N.  East.  Rep.  129.  55  Md.  200. 
3 


34:  BY-LAWS. 

society  regularly  passed  are  binding  upon  all  members.  The 
power  of  government  of  an  incorporated  society  is  in  the 
majority,  under  the  contract  of  membership.  Under  this 
contract,  a  member  is  bound  by  the  by-laws  in  force  when  he 
becomes  a  member,  and  such  as  shall  thereafter  be  regularly 
passed.  If  the  member  shall  object  to  such  by-laws  as  are 
subsequently  passed,  he  may  resign  his  membership  and  escape 
the  effect  of  them;  but  if  he  continue  his  membership,  he  is 
bound  by  them.  "Where  the  articles  of  association  of  an 
unincorporated  society  are  silent  as  to  any  power,  to  alter  them, 
and  a  majority  of  the  members  vote  to  change  them,  the  change 
so  made  is  valid  and  binding  as  to  all  who  voted  for,  assented 
to,  or  in  any  way  acted  on,  or  enjoyed  the  benefits  of  such 
change.  And  acquiescence  in  the  change  for  a  time  after  it 
has  become  known  to  a  member  will  be  construed  as  an 
adoption  of  it.  But  such  change  is  not  binding  on  a  protest- 
ing minority.  Where,  however,  power  is  given  to  the  major- 
ity of  the  members  at  a  regular  meeting  to  alter  rules  affecting 
the  general  interests  of  the  society,  the  changes  made  will  be 
binding  upon  all  members  continuing  their  membership.1  One 
who  becomes  a  member  of  a  mutual  benefit  society  is  charge- 
able with  knowledge  of  the  provisions  of  its  charter  and  by- 
laws, and  is  bound  by  them.  He  can  not  be  ignorant  of  them, 
nor  can  he  refuse  obedience  to  them,  unless  they  are  illegal,  or 
require  the  performance  of  acts  which  the  law  forbids.2  The 
provisions  of  the  established  by-laws  of  a  mutual  benefit  societv 
are  elements  of  the  contract  of  insurance.  They  are  factors 
which  can  not  be  disregarded,  and  all  who  become  members 
must  know  this  fact.  A  person  who  enters  a  society  must 
acquaint  himself  with  its  laws,  for  they,  to  the  extent  of  their 
provisions,  measure  his  duties,  his  rights  and  his  liabilities. 
It  is  not  one  by-law  or  some  by-law  of  which  he  must  take 
notice,  but  he  must  take  notice  of  all  which  affect  his  rights 
or  interests.  Where  there  is  an  express  and  clear  reservation 
of  the  right  to  amend  the  by-laws,  he  is  bound  to  take  notice 
of  the  existence  and  effect  of  that  reserved  power.3 

1  Kehlenbeck      v.      Norddeutscher   Manning  v.    San  Antonio   Club,  63 
Bund,  10  Daly  (N.  Y.)  447;  see  §18.      Texas.    165;   51   Am.    Rep.    639;    St. 

2  Bauer  v.  Samson  Lodge,  102  Ind.    Mary's  Soc.  v.  Burford's  Adm'r,   70 
263;    1   N.    E.    Rep.    571;     Coles    v.   Pa.  St.  321. 

Iowa  State    Mutual,    18    Iowa,  425;       3MacDowell  v.  Ackley,  93  Pa.  St. 


BY-LAWS.  3D 

It  is  sometimes  said  that  a  member  is  bound  to  know  the  rules 
of  the  society.  This  is  true,  but  it  is  not  to  be  understood  by 
the  use  of  the  word  "  rules  "  that  reference  is  made  to  the  reg- 
ulations adopted  by  the  officers  of  the  society  for  the  transac- 
tion of  business,  but  rather  such  rules  as  enter  into  the  con- 
stitution of  the  society  as  provisions  of  its  charter  or  its 
b^y-laws.  Rules  in  the  nature  of  instructions  to  officers  and 
agents,  directing  the  discharge  of  their  duties,  etc.,  can  not  be 
meant,  but  rather  the  rules  whereby  the  liability  and  rights 
of  members  of  the  society  are  fixed,  which  are  parts  of  the  in- 
stitution.1 Where  the  by-laws  of  a  society  set  forth  specific- 
ally the  powers  and  duties  committed  to  local  agents,  a  mem- 
ber is  charged  with  knowledge  of  the  limits  of  such  powers, 
and  can  not  claim  that  notice  to  one  of  such  local  agents  con- 
cerning matters  without  the  scope  of  his  authority  and  duty,  un- 
der such  by-laws,  is  notice  to  the  society.2  A  person  who  becomes 
a  member  of  a  mutual  benefit  society  assents  to  the  by-laws 
existing  at  the  time  he  acquires  a  membership.  While  he  may 
always  insist  that  a  certain  by-law  is  contrary  to  law,  and,  for 
that  reason,  void,  yet  he  may  not  assail  the  binding  force  of 
a  by-law  existing  when  he  was  admitted  into  the  society,  on 
the  ground  that  it  was  not  regularly  adopted,  or  that  the  so- 
ciety had  no  power  to  make  it.8 

§  19.  By-laws  of  a  society  must  be  legal. — The  by-laws  of 
a  society  must  be  consistent  with  the  laws  of  the  land  in 
which  it  exists,  or  does  business.  In  this  country  they  must 
be  consistent  with  the  constitution  of  the  United  States,  and 
the  acts  of  Congress  pursuant  thereto,  and  the  constitution, 
statutes  and  general  laws  of  the  state  in  which  the  society  is 
organized,  or  is  doing  business.  A  member  is  not  bound  by  a 
by-law  which  is  contrary  to  law,  even  though  he  may  have 
assented  to  it.     Where  the  provisions  of  the  constitution  and 

277;  Supreme  Lodge  v.  Knight,  117  Pa.  St.  402  ;  Adriance  v.  Roonic  •">•_> 

Ind.  489;  20 N.  East.  Rep.  479;  Poult-  Barb.  399;  Eaton  v.  Supreme  Lodge, 

ney  v.  Bachman,  81  Hun 49;  Supreme  22  Cent.  Law  Jour.   560;  Painter  v. 

Commandery  v.  Ainsworth,  71  Ala.  Association,  14  Ins.    Law  Jour.  556. 
436.  Waterman  on  Corp.  235;  Pfister 

1  Walsh  v.  Insurance  Co.,  30  Iowa  v.  Gerwig,  122  Ind.  567;  23  N.  East. 
133-145;  Treadway  v.  Insurance  Co.,  r0J1.  1041  ;  Insurance  Co.  v.  Perrine, 
29  Conn.  68  ;  Hale  v.  Insurance  Co.,  7  Watts  &  Ser.  348  ;  Miller  v.  Associa- 
6  Gray  (Mass.)  169.  tion,  42  N.  J.  Eq.  457;  7  Atl.  Rep.  895. 

2  Mitchell  v.  Lycoming  Mutual,  51 


36  BY-LAWS. 

by-laws  of  a  society  permit  a  contract  of  insurance  to  be 
assigned  or  made  payable  to  a  stranger  who  has  no  insurable 
interest  in  the  life  of  a  member,  and  the  laws  of  the- state  in 
which  the  contract  is  executed,  hold  such  an  assignment  or 
designation  of  beneficiary  to  be  void,  as  against  public  policy, 
such  provisions  are  inoperative  and  void.1  By-laws  of  a  soci- 
ety which  forbid  a  member  to  work  at  his  trade  at  such  prices 
as  he  chooses  to  accept,  and  compel  him  to  join  in  a  "  strike  " 
by  punishing  him  for  refusing  to  do  so,  are  void  as  against 
public  policy.2  It  is  not  illegal  for  workingmen  to  form  and 
act  as  an  association  for  the  purpose  of  protecting  themselves 
against  the  encroachments  of  their  employers,  and  to  agree,  in 
furtherance  of  such  object,  not  to  teach  others  their  trade  un- 
less by  consent  of  the  society.  It  has  been  said :  "  In  the 
relations  existing  between  labor  and  capital,  the  attempt  by 
co-operation,  on  the  one  side,  to  increase  wages  by  diminishing 
competition,  or,  on  the  other,  to  increase  the  profit  due  to 
capital,  is  within  certain  limits  lawful  and  proper.  It  ceases  to 
be  so  when  unlawful  coercion  is  employed  to  control  the  free- 
dom of  the  individual  in  disposing  of  his  labor  or  capital.  It 
is  not  easy  to  give  a  definition  which  shall  include  every  form 
of  such  coercion ;  it  is  enough  that  in  the  compact  before  us 
there  is  no  evidence  of  any  purpose  to  use  such  unlawful  means 
in  any  form."  3  A  by-law  of  a  society  imposed  a  penalty  for 
violation  of  its  by-laws,  one  of  which  forbade  any  of  its  mem- 
bers to  work  for  any  person  who  should  employ  non-members. 
It  was  held  that  the  by-law  was  not  illegal.4  An  association 
of  stevedores  of  a  port,  by  by-law,  fixed  rates  at  which  its 
members  should  work,  and  penalties  for  the  violation  of  the 
by-law,  to  be  paid  to  the  association.  The  court  held  the  by- 
law valid,  and  the  penalty  recoverable.5  One  of  the  by-laws 
of  an  association  provided  that  any  member  who  should  bind 
his  son  in  a  shop  where  non-union  men  were  employed,  should 

1  Price  v.  Supreme  Lodge,  68  Texas  ciety,  6  Thompson  &  Cook  (N.  Y.)  88. 
366;  4  S.  W.  Rep.  633;  Schonfield  v.  3Snow  v.  Wheeler,  113  Mass.  179. 
Turner,  75  Texas  324;  12  S.W.  Rep.  4 Commonwealth  v.  Hunt,  4  Met. 
626.  '  (Mass.)  Ill:  but  see  People  v.  Fischer, 

2  Doyle    v.   Benevolent    Society,  3   14  Wend.  (N.  Y.)  9. 

Hun  (N .  Y.)  361 ;  Farrer  v.  Close,  L.  R.,  5  Stevedores  Ass'n  v.  Walsh,  2  Daly 
4  Q.  B.  602;  Doyle  v.  Benevolent  So-   (N.  Y.)  1. 


bvt-laws.  37 

be  fined,  and  it  was  held  to  be  illegal.1  An  incorporated  med- 
ical societjr  established  a  tariff  of  fees  for  medical  services  to  be 
performed  by  its  members,  fixed  a  minimum  salary  to  be  re- 
ceived by  any  member  who  should  be  appointed  to  any  public 
office  in  a  professional  capacity,  and  adopted  a  by-law  declaring 
that  it  should  be  dishonorable,  and  subject  him  to  expulsion, 
for  any  member  to  accept  any  appointment  at  a  less  sum. 
than  was  specified  therein.  The  court  held  that  the  by-law 
Avas  against  public  policy  and  void.2  A  by-law  providing  that 
no  member  of  the  society  should  sell  a  gun-barrel  to  any  per- 
son of  the  trade,  not  a  member  residing  in  London,  etc.,  was 
held  invalid,  as  being  in  restraint  of  trade.3 

A  society  was  incorporated  for  the  purpose  of  cultivating  the 
art  of  music,  for  the  promotion  of  good  feeling  among  its 
members,  and  for  the  relief  of  its  unfortunate  members.  The 
by-laws  provided  that  it  should  be  the  duty  of  every  member 
to  refuse  to  perforin  in  any  orchestra  or  band  in  which  any 
person  or  persons  were  engaged  who  were  not  members  of  the 
corporation  in  good  standing,  and  also  provided  that  it  should 
be  deemed  a  breach  of  good  faith  and  fair  dealing  between 
members  for  a  member  to  employ  a  suspended  member  or  a 
person  not  a  member.  They  also  required  a  residence  of  six 
months  in  the  United  States  before  a  person  was  eligible  to 
membership.  An  action  was  brought  to  restrain  the  society 
from  enforcing  its  by-laws  and  from  fining  the  plaintiff  for 
employing  a  person  in  his  orchestra,  who  was  not  a  member 
of  the  union.  The  court  held  that  the  effect  of  the  by-laws 
above  enumerated  was  to  create  a  close  corporation,  and  to 
force  each  member  of  the  profession  to  also  become  a  member 
of  the  union,  unless  he  preferred  to  abandon  his  calling  or  seek 
some  other  locality  in  which  to  exercise  it;  that  tin-  by-law 
Avhich  required  a  residence  of  six  months  in  the  United  States 
before  eligibility  to  membership  virtually  prohibited,  in  view 
of  the  restrictions  contained  in  the  other  by-laws,  a  musician 
on  coming  into  the  United  States,  from  exercising  his  calling : 
that  such  by-laws  were  not  calculated  to  promote  the  general 
good  feeling  and  good  fellowship  which  it  was  the  object  of 

•Rigby  v.  Connol,  L.  R,  14  Chan.  Societj  of  Gunmakers  v.  Fell, 
Div.  482-492.  Willes'  Rept.  (Eng.)  384 

2  People    v.    Medical    Society,    24 
Barb.  570. 


38  BY-LAWS. 

the  union  to  obtain,  and  were  not  onty  against  public  policy, 
but  antagonistic  to  the  right  of  every  man  to  earn  his  liveli- 
hood by  honest  labor.1 

All  combinations  and  associations  designed  to  coerce  work- 
men to  become  members,  or  to  interfere  with,  obstruct,  vex 
or  annoy  them  in  working,  or  in  obtaining  work,  because  they 
are  not  members,  or  in  order  to  induce  them  to  become  mem- 
bers ;  or  designed  to  prevent  employers  from  making  a  just 
discrimination  in  the  rate  of  wages  paid  to  the  skillful  and  to 
the  unskillful ;  to  the  diligent  and  to  the  lazy;  to  the  efficient 
and  to  the  inefficient;  and  all  associations  designed  to  interfere 
with  the  perfect  freedom  of  employers  in  the  proper  man- 
agement and  control  of  their  lawful  business,  or  to  dictate  in 
any  particular  the  terms  upon  which  their  business  shall  be  con- 
ducted, by  means  of  threats  of  injury  or  loss,  by  interference 
with  their  property  or  traffic,  or  with  their  lawful  emplo3Tment 
of  other  persons,  or  designed  to  abridge  any  of  these  rights, — 
are  pro  tatito,  illegal  combinations  or  associations;  and  all 
acts  done  in  furtherance  of  such  intentions  by  such  means,  and 
accompanied  by  damage,  are  actionable.2 

'Theodore  Thomas  v.  Mutual  Pro-  v.  People,  35  111.  17;  76  Am.  Dec.  783, 

tective  Union,  49  Hun  171,  Daniels,  note;  In  re  Baldwin,  27  Fed.  Rep.  187; 

J.,  dissenting  in  a  vigorous  opinion  State  v.  Donaldson,  32  N.  J.  L.  151;  90 

in  which  the  following   authorities  Am.  Dec.  649,  note;  State  v.  Cole,  39 

are  cited  and  reviewed:    People  v.  N.  J.  L.  324;   People  v.  Richards,  1 

Fischer,  14  Wend.  9  ;  Regina  v.  Duf-  Mich.   216;    51   Am.   Dec.   75,   note; 

field,   5    Cox   C.   C.  404;    Regina  v.  Commonwealth  v.  Hunt,  4  Met.  Ill; 

Shepherd,  11  Cox  C.  C.  325;  Dunham  38  Am.   Dec.    346,   note;    People  v. 

v.  Village  of  Rochester,  5  Cow.  462  ;  Fischer,  14  Wend.  9;  28  Am.  Dec.  501, 

Hooker  v.  Vandewater,  4  Denio  349  ;  note;     Mapstrick  v.  Ramge,  9  Neb. 

Stanton    v.     Allen,    5     Denio    434 ;  390;    31  Am.  Repts.  415;   Kimball  v. 

Springhead  v.  Reily,L.  R.,  6  Eq.  Cas.  Harman,  34  Md.  407;   6  Am.  Repts. 

551  ;  Commonwealth  v.  Hunt,  4  Met.  340;  State  v.  Crowley,  41  Wis.  271;  22 

111;    Bowen  v.  Matheson,  14  Allen  Am.  Repts.  719;  Morris  Run  Coal  Co. 

499  ;  Carew  v.  Rutherford,  106  Mass.  v.  Barclay,  68  Pa.  St.  173,187;  Clancey 

1  ;  Master  Stevedores'  Association  v.  v.    Salt  ManTg    Co.,  62  Barb.   395. 

Walsh,  2  Daly  1.  The  by-laws  of  a  society  may  be  void 

2  Old  Dominion  Steamship  Co.  v.  as  being  in  restraint  of  trade.     Ber- 

McKenna,  30  Fed.  Rep.  48;  35  Alb.  L.  wick  v.  Johnson,  Lofft.  334;  2  Kvd 

J.  208;    Walker  v.  Cronin,  107  Mass.  on  Corp.  125  et  seq.;  Gunmakers  v. 

555;   Johnston  Co.  v.  Meinhardt,  60  Fell,  Willes,  384;   Case  of  Tailors  of 

How.  Pr.  168;  Slaughter-house  Cases,  Ipswich,  11  Co.  53;    Grant  on  Corp. 

16  Wall.  36,  116;   Mogol,  etc.,  Co.  v.  82;   Rogers  v.  Brenton,  10  Q.  B.  26; 

McGregor,  L.  R.,  15  Q.  B.  476;  Smith  Hayden  v.  Noyes,  5  Conn.  391;  Moore 


BY-LAWS.  39 

The  statutes  of  a  state,  which  apply  to  corporations  formed 
for  purposes  other  than  profit,  govern  incorporated  mutual 
benefit  societies,  and,  when  these  statutes  provide  that  the 
term  for  which  officers  may  be  elected  shall  be  one  year, 
neither  the  incorporators,  nor  the  trustees  first  elected,  are 
authorized  to  adopt  a  by-law  or  regulation  providing  that  they 
shall  hold  office  during  life.1  A  stock  exchange  may  make 
membership  therein  subject  to  the  rule,  that,  if  the  member 
becomes  insolvent,  his  seat  may  be  sold  for  the  benefit  of  his 
creditors  among  the  other  members  of  the  board.3  Pajmients 
of  the  proceeds  of  such  sale  to  such  members  are  not  prefer- 
ences, void  by  the  bankrupt  law.3  Where  the  scheme  of  a 
society  was  the  annual  distribution  by  lot  among  its  members 
of  works  of  art  purchased  by  their  subscriptions,  it  was  de- 
clared to  be  a  lottery,  and  a  violation  of  law.4  By-laws  can 
not  be  permitted  to  destroy  or  amend  the  express  provisions 
of  a  contract  of  insurance,  without  the  consent  of  the  mem- 
ber.5 It  has  been  held,  in  many  states,  that,  while  societies 
may  provide  methods  for  redressing  grievances  and  deciding 
controversies,  and  may  compel  members  to  resort  to  the  pre- 
scribed methods  before  invoking  the  power  of  the  courts,  it  is 
not  lawful  for  them  to  entirely  prohibit  members  from  suing 
to  recover  benefits  accruing  to  them  under  the  by-laws  of  the 
society,  or  a  contract  of  insurance  issued  by  it.6  A  by-law  of 
a  society,  setting  aside  a  certain  fund  from  which  a  certain 
sum  is,  upon  the  death  of  a  member,  to  be  paid  to  the  living 

v.  Bank,  52  Mo.  377;   Sayre  v.  Asso-       'State  v.  Association,  38  Oh.    St. 

ciation,    1     Duvall   (Ky.)    143;   Nash  281. 

v.  Page,  80  Ky.  539;  Huston  v.  Rent-       2  Belton  v.  Hatch.  109  N.  Y.  593. 
linger,  91  Ky.  333;  15  S.  W.  Rep.  867.        3Hyde  v.  Woods,  94  U.  S.  523. 
An     association    of     stenogra pliers,       4  Governors  v.  American  Art  Un- 

formed  to  establish  and  maintain  uni-  ion,  7  N.  Y.  228. 
form  rates  of  charges,  and  to  prevent       5  Becker  v.  Farmers'  Mut.  etc.,  48 

com  petition  among  its  members  un-  Mich.   610;  Ins.   Co.    v.  Connor,    17 

der  certain  penalties,  is  illegal,  as  in  Pa.  St.  136;  Ins.    Co.  v.  Harvey.  45 

restraint  of  trade  and  against  public  N.   H.  292;     Ins.  Co.  v.   Butler,  :il 

policy,    and    one    member    can    not  Me.  451  :  Morrison  v.  Wisconsin  <  >dd 

maintain  an  action  against;  another  Fellows,  etc.,  59  Wis.  162;  18  N.  W. 

for  damages  occasioned  by  the  latter  Rep.  13;  Gundlachv.  Germania   Me- 

underbidding  the  former,  in  violation  chanics     Ass'n,  49  How.   Pr.    190; 

of  the  rules  of  the  association.     More  Pulford     v.    Fire     Department,     31 

v.  Bennett,  140  111.  69;    29  N.  East.  Mich.  458. 
Rep.  888.  •  See  §§  132-358. 


40  BY-LAWS. 

members  holding  numbers  just  above  and  just  below  the  num- 
ber of  the  deceased  member,  is  illegal  as  being  in  the  nature 
of  a  wagering  policy.1  A  society  organized  as  a  corporation 
under  the  laws  of  a  state,  may  not  by  its  by-laws  subject  itself 
or  its  members  to  the  jurisdiction  of  an  authority  existing 
outside  of  the  state,  and  beyond  the  control  of  its  laws. 
A  by-law  of  a  corporation  existing  under  the  laws  of  Michi- 
gan may  not  require  its  members  to  pay  assessments  levied 
by  a  supreme  lodge  incorporated  under  the  laws  of  Ken- 
tucky. The  court  said  upon  the  subject:  "The  relator 
is  not  liable  to  pay  the  assessment.  It  is  not  competent 
for  the  respondent  to  subject  itself,  or  its  members,  to  a 
foreign  authority  in  this  way.  There  is  no  law  of  the 
state  permitting  it,  nor  could  there  be  any  law  of  the  state 
which  would  subject  a  corporation  created  and  existing  under 
the  laws  of  this  state  to  the  jurisdiction  and  control  of  a  body 
existing  in  another  state,  and  in  no  manner  under  the  control 
of  our  law.  The  attempt  of  the  respondent  to  do  this  is  an 
attempt  to  set  aside  and  ignore  the  very  law  of  its  being."  2  A 
corporation  of  a  state  can  not  permit,  by  by-law,  a  foreign  cor- 
poration to  interfere  in  its  affairs,  nor  can  it  permit  its  mem- 
bers to  be  disfranchised  by  another  body  outside  of  it  for  any 
cause  or  in  any  manner.3  A  by-law  of  a  merchants'  exchange, 
requiring  its  members  to  submit  their  controversies  to  arbitra- 
tion, and  prohibiting  them  from  bringing  suit  in  court  against 
each  other  to  settle  their  claims,  has  been  held  to  be  illegal.1 
In  a  beneficial  society  known  as  "Good  Samaritans,"  there 
was  a  by-law  providing  that,  when  a  member  should  for  any 
cause  be  expelled,  he  should  be  suspended  in  the  air  by  means 
of  a  rope  fastened  around  the  waist.  This  ceremony  had  often 
been  performed  upon  others  in  the  presence  of  a  certain  mem- 
ber, but  when  she  was  expelled,  she  resisted  to  the  extent  of 
her  ability.     The  rope  was,  however,  fastened  around  her  waist, 

1  The  Golden  Rule  v.  People,  118  4  State  v.  Merchants'  Exchange,  2 
111.  492;  9  N.  East.  Rep.  342.  Mo.   App.  96;   State  v.  Chamber  of 

2  Lampherev.  United  Workmen,  47  Commerce,   20  Wis.  69;  Sweeney  v. 
Mich.  429.  Society,  14  Weekly  Notes  of  Cases, 

3  Allnut  v.  High  Court  of  Foresters,  466-486. 
62    Mich.   110;    28    N.   W.   Rep.   802; 

State  v.  Miller,  66  Iowa,  26:  23  N.  W. 
Rep.  211. 


BY-LAWS.  41 

and  an  attempt  was  made  to  draw  her  up  until  her  feet  should 
not  touch  the  floor,  when  she  fainted.  Those  who  had  thus 
attempted  to  hang  her  were  indicted,  and  convicted  of  assault 
and  battery.  The  court  said :  "  Rules  of  discipline  for  this 
and  all  voluntary  associations  must  conform  to  the  laws.  If 
the  act  of  tying  this  woman  would  have  been  a  battery,  had 
the  parties  concerned  not  been  members  of  the  society  of 
'  Good  Samaritans,'  it  is  not  the  less  a  battery  because  they 
wrere  all  members  of  that  humane  institution."  '  By-laws  or 
regulations  are  properly  only  rules  for  future  action.  Ke  post 
facto  lawTs  are  no  more  lawful  for  corporations  than  for  states, 
and  all  by-laws  contrary  to  the  general  principles  of  the  com- 
mon law,  or  the  policy  of  the  state,  are  void.  The  effect  of 
an  amendment  of  the  constitution  of  a  corporation,  which  be- 
fore contained  no  such  provision,  whereby  it  was  declared  that 
any  member  who  should  fail  to  pay  the  whole  of  his  dues  which 
should  then  be  in  arrears,  or  any  indebtedness  to  the  corpora- 
tion, on  or  before  a  day  named,  should,  from  and  after  that 
day,  cease  absolutely  to  be  such  member,  without  any  further 
action  whatever  of  the  corporation  or  its  trustees,  and  that  the 
secretary  should  drop  the  names  of  all  such  delinquent  persons 
from  the  roll  of  members,  is  not  that  of  a  regulation,  but  of  an 
adjudication  on  existing  defaults,  analogous  to  a  foreclosure 
decree  fixing  a  short  term  of  payment;  and  it  is  clearly  ex  post 
facto,  in  that  it  enforces  a  new  penalty  beyond  those  existing 
at  the  time  of  default.2  A  by-law  made  in  pursuance  of  an 
express  powrer  in  the  charter  to  make  by-laws,  is  void,  if  con- 
trary to  the  general  or  statute  laws  of  the  state. 

§  20.  By-laws  must  be  consistent  with  the  charter. — 
By-laws  of  a  society  inconsistent  with  the  provisions  or  main 
objects  of  its  charter  are  ultra  vires  and  void.  Where,  by 
the  charter,  certain  classes  of  persons  are  to  be  benefited,  a 
corporacion  has  no  authority  to  provide  by  a  by-law  for  other 
beneficiaries,  or  to  exclude  any  class  provided  for  by  the  char- 
ter.' Where  the  charter  provides  that  the  devisees  of  members 
shall  be  among  those  who  may  take  the   benefit  fund,  restric- 

1  State  v.  Williams.  7.")  N.  C.  131.  East.  Rep.  847;   Supreme  Council  v. 
5  Pulford  v.  Fire  Department,  31  Perry,  1  10  Mass.  580;   Kentucky  Ma- 
Mich.  459.  sonic   v.    Miller,    13  Bush  (Ky.)  489; 
*Brigga  v.  Earl,  130  Mass.  473;  1  N.  see  §§  158,  1G5,  168. 


42  BY-LAWS. 

tions  upon  the  power  or  right  of  the  member  to  make  a  will 
are  inoperative  and  void.1  Where  the  charter  prescribes  the 
conditions  and  qualifications  of  membership  in  a  society,  no 
additional  conditions  and  qualifications  may  be  made  in  the 
by-laws.2  A  member  of  a  society  is  not  bound  by  a  by-law 
which  is  contrary  to  its  charter,  even  though  he  may  have  as- 
sented to  it.3  The  controlling  consideration  in  determining 
the  validity  of  corporate  by-laws  is  the  nature  and  purpose  of 
the  corporation.  If  a  by-law  is  clearly  alien  to  its  nature, 
and  a  departure  from  its  purpose,  it  will  be  held  ultra  vires, 
and  void;  if  not,  and  it  is  consistent  with  the  general  laws  of 
the  land,  it  will  be  valid.  No  rules  can  be  framed,  which 
would  be  of  any  practical  value  in  applying  this  test,  but  the 
application  of  it  to  individual  cases  must  always  remain  a 
matter  involving  the  exercise  of  sound  practical  judgment. 
"Where  the  statute  under  which  a  corporation  was  organized 
required  a  majority  of  the  trustees  to  do  a  corporate  act,  and 
a  bv-law  authorized  a  vacancy  in  the  office  of  trustee  to  be 
filled  by  a  less  number  than  a  majority,  it  was  held  that  the 
by-law  was  contrary  to  the  charter  and  void.4  Where  the 
charter  of  a  society  provides  that  for  non-payment  of  an  as- 
sessment the  officers  may  forfeit  a  contract  of  insurance, 
the  society  may,  by  by-law,  provide  that  such  non-payment 
shall  work  a  forfeiture,  in  which  case  no  action  of  the 
officers  will  be  necessary.6  Where  the  charter  of  a  society, 
limits  and  restricts  the  number  of  "  active "  members  which 
a  societ}r  may  have  at  one  time,  a  by-law  is  void,  which  pro- 
vides for  the  election  of  "contributing"  members  in  the  same 
manner  as  active  members,  after  the  active  list  is  filled.6 
Where  the  charter  of  a  corporation  provides  for  specific  as- 
sessments to  pay  losses  and  expenses,  a  by-law  is  ultra  vires 
and  void,  which  requires  the  members  to  pay  an  annual  deposit 
in  advance  each  year,  instead  of  assessments,  and  provides  that 
the  assessment  liability  of  members  shall  be,  for  each  year  of 

1  Rand  v.  Association,  3  Mackey  (D.       4  State  v.  Curtis,  9  Nevada  325. 

C.)  68.  6  Equitable,  etc.  v.  McLennon  (Sup. 

2  People  v.  Benevolent  Society,  41   Ct.  Tenn.),  6  Ins.L.  J.  124. 

Mich.  67;    People   v.  Benevolent   So-       6 Diligent     Fire    Co.    v.   Common- 
ciety,  24  How.  Pr.  216.  wealth,  7o  Pa.  St.  291. 

3  People  v.  Benevolent  Society,  su- 
pra. 


BY-LAWS.  4d 

the  term  of  the  contract,  equal  in  amount  to  the  annual  deposit, 
but  in  no  case  shall  any  member  be  assessed  in  one  year  for  an 
amount  exceeding  the  annual  deposit.1 

The  charter  of  a  religious  society  authorized  the  making  of 
by-laws  requisite  for  the  good  government  and  support  of  the 
church,  and  provided  that  no  persons  should  have  a  vote  in  the 
election  of  its  minister,  except  those  who  had  been  regularly 
admitted,  and  had  been  members  of  such  church  for  twelve 
months  preceding  the  election.  A  by-law  was  enacted,  pro- 
viding that  a  member  of  the  church,  whose  pew  rent  had  been 
in  arrears  for  a  longer  time  than  one  year  prior  to  the  elec- 
tion, should  not  be  entitled  to  vote.  This  by-law  was  held  to 
be  valid  and  not  contradictory  to  the  act  of  incorporation. 
The  court  said  :  "  No  person  is  excluded  from  voting,  unless  he 
is  in  default  in  a  matter  essential  to  the  support  of  the  church, 
and  he  may  reinstate  himself  in  his  privilege  by  paying  his 
debt.  Nothing  is  more  manifestly  for  the  good  of  the  church 
than  this  by-law."  a  A  law  of  New  York  provides  that  "  the 
directors  *  of  any  society  or  corporation  organized  under 
the  provisions  of  this  act  *  shall  be  jointly  or  severally  lia- 
ble for  all  debts  due  from  said  society  or  corporation,  con- 
tracted while  they  are  trustees,"  etc.  A  policy  issued  by  a 
society  incorporated  under  this  act  provided  that  "  the  direct- 
ors of  this  society,  either  individually  or  as  a  body,  shall  not 
assume  any  liabilities  personally  by  reason  of  the  issuance  of  • 
this  certificate."  It  was  held  that  the  fore^oin^  statute 
formed  a  part  of  the  charter  of  the  society  and  that  the  pro- 
vision of  the  policy,  being  repugnant  thereto,  was  void.3  An 
article  of  the  charter  of  a  society  provided:  "  Every  mem- 
ber of  this  union  shall  be  entitled  to  one  hundred  dol- 
lars for  funeral  expenses,  provided  that  he  has  been  a 
member  six  months,  and  not  more  than  three  months'  dues 
in  arrears  at  the  time  of  his  death,  the  money  to  be  paid  to 
the  deceased's  nearest  relative."  A  by-law  provided:  "Any 
member  becoming  three  months  in  arrears  shall  not  be  enti- 
tled to  benefits  until  eight  weeks  have  expired  from  the  time 

'State    v.  Association,   42   Oh.  St.        *  Greene  v.  Walton,  13  N.  Y.  Kupp. 
555.  147,  Learned,  P.  J.,  dissenting. 

2  Commonwealth  v.  Cain,  5  S.  &  R. 
(Pa.)  509. 


44  BY-LAWS. 

he  settles  up  in  full."  This  was  held  to  be  inconsistent  with  the 
charter.1  The  charter  of  a  society  stated  its  object  to  be  to  "  af- 
ford relief,  comfort  and  protection  to  its  members."  A  by-law 
providing  for  the  payment  of  benefits  to  defray  the  funeral  ex- 
penses of  members  and  of  their  wives  was  held  to  be  proper.2 

§  21.  By-laws  of  an  unincorporated  society  must  be  con- 
sistent with  its  constitution. — The  constitution  of  an  unin- 
corporated society,  is,  as  has  been  said,  the  fundamental  law 
of  the  society;  and  it  follows  that  in  case  of  a  conflict  between 
the  constitution  and  the  by-laws  the  constitution  must  prevail.3 

§  22.  By-laws  of  an  unincorporated  society  must  not  be 
illegal. — In  respect  to  the  by-laws  of  an  unincorporated  society, 
the  court  has  no  visitorial  power,  and  may  not  determine 
whether  they  are  reasonable  or  unreasonable.  The  court 
regards  the  members  of  such  societies  as  standing,  to 
some  extent  at  least,  in  the  relation  of  partners,  and  per- 
mits them  to  make  their  own  compacts  so  long  as  they  are 
legal.4  When  a  by-law  of  such  a  society  is  legal,  the  only 
question  which  a  court  may  examine  is,  whether  it  has  been 
adopted  in  the  way  agreed  upon  by  the  members  in  their  con- 
tract of  association.  If  a  member  of  such  a  society  deems  its 
by-laws  unreasonable  and  oppressive,  his  only  remedy  is  to 
withdraw  from  membership  in  it.  The  theor}^  of  an  unincorpo- 
rated society  is  that  men  shall  come  together  of  their  own  free 
will  and  accord,  and  be  bound  by  such  legal  rules  as  shall  be 
passed  in  the  manner  agreed  upon.  There  are  cases  in  the 
books  where  the  by-laws  of  an  unincorporated  society  have 
been  declared  to  be  just  and  reasonable,  but  there  are  none,  it 
is  believed,  where  the  by-laws  of  such  a  society  have  been  held 
to  be  unreasonable  and  void.5 

§23.  By-laws  of  an  incorporated  society  must  be  rea- 
sonable and  necessary. — But  it  is  a  governing  rule  with  re- 
gard to  corporations,  that  their  by-laws  must  be  reasonable, 
and  all  which  are  vexatious,  unequal,  oppressive,  or  manifestly 
detrimental  to  the  interests  of  the  corporation,  are  void.     The 

1  Sherry  v.  Union,  139  Pa.  St.  470;  6  Kehlenbeck  v.  Norddeutscher 
20  Atl.  Rep.  1062.  Bund,  10  Daly  (N.  Y.)  447;   Harring- 

2  Lysaght  v.  Association,  55  Mo.  ton  v.  Workingmen's  Society,  70  Ga. 
App.  538.  340;  Grosvenor  v.  Society,  118  Mass. 

3  See  §  14.  78. 
"See  §110. 


BY-LAWS.  45 

power  of  making  by-laws  binding  upon  all  the  members  of  a 
corporation,  whether  it  resides  in  the  majority  of  the  body  at 
large,  or  those  present  at  a  corporate  meeting,  or  be  confined 
by  charter  to  a  select  class,  is  in  trust  for  the  benefit  of  the 
whole,  and  mast  therefore  be  exercised  with  discretion.1  In 
Coleman  v.  Knights  of  Honor,2  the  court  intimates  that  a  mem- 
ber of  an  incorporated  society  may  not  complain  that  a  by-law 
duly  passed  by  the  society  is  unreasonable,  but  this  is  clearly 
against  both  principle  and  authority.  In  People  v.  Board  of 
Trade,3  the  doctrine  is  laid  down  that  a  court  will  not  interfere 
with  the  enforcement  of  the  by-laws  of  a  society  incorporated 
for  the  purposes  of  religion,  morality,  benevolence  or  amuse- 
ment, but  this  case  is  neither  in  harmony  with  the  general 
current  of  authority,  nor  with  prior  and  subsequent  decisions 
oC  the  supreme  court  of  Illinois.  Where  an  unincorporated 
society  becomes  incorporated  under  a  general  law,  the  pro- 
visions of  its  constitution  and  by-laws  become  subject  to  the 
rules  of  law  governing  the  provisions  of  the  constitution  and 
by-laws  of  corporations.  While  a  society  remains  unincorpo- 
rated it  may  make  such  rules  and  regulations  as  may  seem 
proper  for  the  discipline  of  its  members,  but  as  soon  as  it  be- 
comes incorporated,  it  surrenders  this  power,  and  becomes 
subject  to  the  visitorial  power  of  the  courts.  In  such  cases, 
therefore,  provisions  of  the  constitution  and  by-laws  which 
were  binding  upon  the  members  so  long  as  the  society  remained 
unincorporated,  may  become  null  and  void  by  the  very  fact  of 
incorporation.  The  court  will  on  proper  application  determine 
whether  such  provisions  are  reasonable  and  necessary  to  effect 
the  object  for  which  the  society  was  incorporated.4  Whether 
a  by-law  is  reasonable  and  consistent  with  the  law,  is  a  ques- 
tion solely  for  the  court  to  determine.5  A  by-law  will  not  be 
set  aside  as  unreasonable  if  there  is  any  equipoise  of  opinion 
in  the  matter;  its  unreasonableness  must  be  demonstrably 
shown.0     A  by-law  will  not  be  held  to  be  unreasonable  merely 

1  Ang.  &  Ames  on  Corp.  §347;  Car-  6  People  v.  Throop,  12  Wend.  186; 

tan  v.  Society,  3  Daly  (N.  Y.)  20;  see  see  10  Wend.  100  and  5  Covven  465; 

§  110.  Commonwealth     v.    Worchester,    3 

1 18  Mo.  App.  189-194.  Pickering  461 . 

3  80  111.  134.  •  State  v.  Exchange,  2  Mo.  App.  96. 

4  State  v.  Medical  Society,  38  Ga. 
608. 


46  BY-LAWS. 

because  it  causes  some  inconvenience  to  the  members.  All  by- 
laws are  apt  to  do  that,  and  the  fact  that  the  by-law  has  been 
permitted  to  remain  in  force  for  some  time  is  evidence  that  it 
is  not  seriously  inconvenient.1  A  by-law  need  not  recite  that 
it  is  necessary,  as  such  necessity  is  implied;  and  in  a  declara- 
tion for  the  penalty  of  a  by-law,  its  necessity  need  not  be  al- 
leged." 

A  by-law  is  reasonable  which  provides  that  a  member  shall 
be  entitled  to  relief,  in  case  of  disability  or  sickness,  only  from 
the  date  of  his  application  for  such  relief,  and  not  from  the 
time  such  sickness  or  disabilit}'  occurred.  While  in  individual 
cases  such  a  by-law  may  work  a  hardship,  on  the  other  hand, 
it  is  necessary  for  the  society  to  make  fixed  and  certain  rules 
to  prevent  imposition  on  the  society,  either  by  feigned  or  triv- 
ial sickness,  or  by  disability  produced  by  causes  not  entitling 
the  claimant  to  relief.  It  is  necessary  that  the  society  should 
have  information  of  the  state  of  the  applicant,  and  have  it  in 
its  power  to  visit  him,  and  inspect  personally  his  situation.3 
A  by-law  providing  that  the  officers  of  the  society  shall  with- 
hold  benefits  when  intemperance,  debauchery,  etc.,  are  the 
cause  of  sickness,  and  providing  that  when  death  is  caused  by 
intemperate  use  of  alcoholic  liquors,  or  by  debauchery,  the 
beneficiary  shall  not  be  entitled  to  the  fund,  is  reasonable  and 
valid.4  Such  a  regulation  is  not  a  determination  of  the  riffht 
of  the  member  or  his  beneficiary.  A  trial  of  the  claim  may 
be  had  to  determine  these  rights  under  the  by-law.  A  society 
may,  by  by-law,  prohibit  its  members  from  indulgence  in  vices 
which  multiply  disease  and  death  among  them  and  thus  di- 
minish its  general  fund  and  increase  the  burden  of  assessments 
upon  contributing  members.  Such  provisions  are  not  merely 
to  regulate  behavior,  but  strike  at  acts  which  will  result  in  in- 
jury to  the  society.  Where  sick  benefits  are  merely  lost  by 
reason  of  intemperance,  membership  remains  in  the  society.  A 
by-law  providing  that  sick  benefits  shall  be  paid  only  upon  pre- 
sentation of  a  physician's  certificate  of  the  character  and  dura- 
tion of  the  illness,  is  reasonable,  as  is  also  a  by-law  providing 

1  Rex  v.  Ashwell,  12  East  22.  4St.  Mary's  Soc.  v.  Burford,  70  Pa. 

2  Tuttle  v.  Walton,  1  Ga.  43;  Coates  St.  321;  Harrington  v.  Society,  70 
v.  Mayor,  etc.,  7  Cowen  585.  Ga.  310. 

3  Breneman  v.  Association,  3  Watts 
&  Sergeant  (Pa.)  218. 


BY-LAWS.  47 

that  no  benefits  shall  be  paid  unless  the  sickness  is  reported  to 
the  "  sick  committee  "  for  investigation  and  report  to  the  so- 
ciety. ' 

A  by-law  of  an  incorporated  society  provided  that  any  mem- 
ber who  should  be  three  months  or  more  in  arrears  for  dues, 
should  be  deprived  of  benefits  for  three  months  after  liqui- 
dating the  same.  The  court  held,  that  this  by-law  was 
unreasonable  and  void,  and  in  discussing  the  question 
said  :  *'  Is  the  by-law  referred  to  unreasonable  ?  I  think  it 
is  most  decidedly  so.  If  it  provided  that  delinquent  members 
should  be  deprived  of  benefits  during  their  delinquency,  it 
would  be  otherwise ;  but  this  by-law  subjects  the  member 
to  a  quasi  penalty  after  the  payment  of  his  dues  and  the 
performance  of  his  duty,  and  for  a  prospective  period  of 
three  months.  *  *  It  is  not  only  unreasonable,  but  op- 
pressive and  detrimental  to  the  interests  of  the  corporation, 
and  one  which,  being  fully  understood,  it  seems,  would  pre- 
vent persons  from  becoming  members  of  the  society." 2  A 
by-law  of  an  incorporated  society  declared  that  "vilifying  any 
of  its  members"  was  a  crime  against  the  society, and  provided 
that  for  such  vilification  a  member  might  be  removed  from 
office,  fined,  or  expelled  from  the  society.  The  object  of  the 
society  was  for  the  relief  of  members  in  case  of  sickness  and 
misfortune,  and  to  assist  distressed  Irishmen  emicrratino-  to 
the  United  States.  The  court  held  the  by-law  unreasonable 
and  unnecessary  for  the  accomplishment  of  the  end  in  view, 
declared  it  void,  and  in  the  opinion  said:  "Everyman  who 
becomes  a  member  looks  to  the  charter;  in  that  he  puts  his 
faith,  and  not  in  the  uncertain  will  of  the  majority  of  the 
members.  The  offense  of  vilifying  a  member,  or  a  private 
quarrel,  is  totally  unconnected  with  the  affairs  of  the  society, 
and  therefore  its  punishment  can  not  be  necessary  for  the  good 
government  of  the  corporation."8  In  People  ex  rcl.  v.  The 
.Medical  Society,1  the  court  held  that  a  society  chartered 
merely  for  the  promotion  of  medical  science  had  no  right  t<> 

'Harrington     v.     Society,    supra;  Atl.  Rep.  1062;  Brady  v.  Association, 

Van  Poucke  v.  Society.  63  -Mich.  :;:s;  14  X.  Y.  Supp.  m. 

2  N.  W.  Rep.  863.  3  Common  wealth  v.  Society,  2  JJin- 

sCartan  v.  Society,  3  Daly  (N.  Y.)  ney  (Pa.)  441. 

20;  see  Pentz  v.  Ins.  Co.,  35  Md.  73  ;  <21  Barb.  571. 
Sherry  v.  Union,  139  Pa.  St.  470;  20 


48  BY-LAWS. 

decide  what  fees  its  members  should  charge  for  their  profes- 
sional services,  and  to  expel  a  member  who  had  disregarded 
such  a  regulation.  The  court  said :  "  Can  it  be  said  with  any 
plausibility  that  the  establishment  of  a  tariff  of  prices  for 
medical  services  was  a  legitimate  object  of  the  creation  of  the 
corporation,  or  that  it  was  necessary,  or  in  any  degree  con- 
tributed to  the  accomplishment  of  the  purposes  or  objects  for 
"which  the  law  authorized  the  corporation  ? " 

The  charter  of  the  Board  of  Trade  of  Chicago  provides  that 
the  corporation  shall  have  the  right  to  admit  or  expel  such 
persons  as  it  may  see  fit,  in  manner  to  be  prescribed  by  the 
rules,  regulations  or  by-laws  thereof.  Under  this  power  it 
adopted  the  following  by-law :  "  In  case  any  member  of  the 
association,  having  made  any  business  contract,  either  written 
or  verbal,  shall  fail  to  comply  promptly  with  the  terms  of  such 
contract,  he  shall,  upon  the  representation  of  an  aggrieved 
member  to  the  board  of  directors,  accompanied  with  satis- 
factory evidence  of  the  facts,  be  by  them  suspended  from  all 
privileges  of  membership  in  the  association  until  such  contract 
is  equitable  or  satisfactorily  arranged  or  settled,  when  he  may 
be  restored  to  membership."  The  court  held  this  by-law  to  be 
reasonable,  and  said :  "  It  (the  charter)  gives  the  power  of 
expulsion,  and  under  that  power  the  corporation  has  adopted 
this  by-law,  providing  that  if  a  membsr  fails  to  comply  with  a 
business  contract  made  with  another  member,  he  shall  be  ex- 
pelled. This  is  somewhat  different  from  the  adjustment  of 
disputes  which  are  properly  referable  to  the  committees  of 
reference  and  arbitration.  It  applies  to  cases  of  non-compli- 
ance with  contracts  about  which  there  is  no  dispute  necessary  to 
be  referred  to  one  of  these  committees,  as  there  was  none  in 
the  present  case.  It  certainly  can  not  be  said  that  this  rule 
was  not  germane  to  the  purposes  for  which  the  corporation 
was  created.  In  our  judgment,  though  it  might  sometimes 
operate  harshly,  it  is  well  adapted  to  secure  the  object  we 
have  above  named,  and  preserve  the  high  character  and  credit 
of  the  Board." '  A  by-law  of  a  chamber  of  commerce  prohibit- 
ing its  members  from  "  gathering  in  any  public  place  in  the  vi- 
cinity of  the  Exchange  Room  "  and  "  forming  a  market "  for  the 
purpose  of  making  any  trade  or  contract  for  the  future  delivery 

1  People  v.  Board  of  Trade,  45  111.  112. 


BY-LAWS.  49 

of  grain  or  provisions,  before  the  time  fixed  for  opening  the 
Exchange  Room  for  general  trading,  or  after  the  time  fixed 
for  closing  the  same,  daily,  is  not  unreasonable,  or  an  unlaw- 
ful restraint  upon  trade.1  Under  the  peculiar  facts  surround- 
ing the  organization  and  maintenance  of  the  Baltimore  and 
Ohio  Employes'  Relief  Association,  it  was  held  that  a  clause 
of  the  constitution  of  the  association,  providing  that  before 
the  association  will  pay  the  beneficiary  of  the  member  killed 
the  amount  of  benefits  due,  the  person  legally  entitled  to  dam- 
ages for  his  death  shall  release  the  Baltimore  and  Ohio  Kail 
R<nid  Company  from  all  claims  for  damages,  was  held  not  to 
be  so  unreasonable  that  a  court  could  declare  it  void."  A 
by-law  of  an  incorporated  benefit  society,  providing  that  any 
member  who  shall  enlist  as  a  soldier,  or  enter  on  board  any 
vessel  as  a  seaman  or  mariner,  shall  thenceforth  lose  his  mem- 
bership, is  valid  and  reasonable,  in  view  of  the  purposes  of  the 
organization,  and  "is  not  forbidden  by  any  principle  of  public 
policy."  3 

A  by-law  of  a  mutual  benefit  society,  providing  that  the 
sending  of  a  notice  of  assessment  or  annual  dues  by  mail  shall 
be  a  legal  and  sufficient  notice,  whether  in  fact  the  notice  is 
ever  received  by  the  member  or  not,  is  reasonable  and  valid. 
Such  terms  are  neither  harsh  nor  unfair.  The  great  mass  of 
commercial  and  financial  business  of  the  country  is  done 
through  the  mail,  and  it  is  not  an  unreasonable  condition  that 
notice  so  sent  shall  be  considered  duly  served.4  The  constitu- 
tion and  by-laws  of  a  society  requiring  an  applicant  for  mem- 
bership to  be  initiated  in  addition  to  paying  his  proposition 
fee  and  being  elected,  before  acquiring  any  rights  as  a  member, 
are  reasonable,  and  not  contrary  to  law,  notwithstanding  the 
ceremony  of  initiation  is  secret.5  It  may  on  first  impression 
seem  to  be  drawing  too  fine  a  distinction  to  say  that  a  pro- 
vision, which  in  a  by-law  of  a  corporation  would  clearly  be 

'State  v.  Milwaukee  Chamber  of  App.  107;  Union  Mutual  v.  Miller,  36 

Commerce,  47  Wis.  670.  111.  App.  230;  Greel.v  v.  fowa  Ins.  Co., 

*  Fuller  v.  B.  &  O.  Ass'n,  67  Md.  50  Iowa  86;   Lothrop    v.  Greenfield 

133;  10  Atl.  Rep.  237;  Owens  v.  B.  Mutual,83  Mass. (2  AJlen) 82; Epstein 

&  O.  R.  R.  Co.,  35  Fed.  Rep.  715.  v.  Mutual  Association,  88   La   Ann. 

3  Franklin    v.   Commonwealth,   10  938;  see  §§  289-291. 

Ban- (Pa.)  359.  *  Matkin  v.    Supreme    Lodge,    82 

4  Forse  v.  Supreme  Lodge,  41  Mo.    Texas,  301;  18  S.  W.  Rep.  306. 


50  BY-LAWS. 

invalid  against  its  members,  may  nevertheless  be  a  valid  and 
binding  clause  in  a  special  contract  between  it  and  any  one  of 
its  members.  But  it  is  well  settled  that  the  by-laws  of  a  cor-, 
poration  must  be  of  a  general  nature,  having  reference  to  the 
objects  of  its  organization.  They  are  usually  passed  without 
the  knowledge  or  consent  of  a  large  majority  of  the  members 
and  by  those  who  may  not  be  so  watchful  of  the  individual 
interests  of  each  member  as  of  the  interests  of  the  corporation 
as  a  body.  Special  contracts  Avill  be  enforced  against  those 
who  voluntarily  and  fairly  enter  into  them,  but  the  law  will 
relieve  a  member  from  a  by-law  which  is  unreasonable  or 
oppressive.  "  A  man  may  part  with  a  common  right  volun- 
tarily, of  which  it  would  be  impolitic  and  unjust  to  deprive 
him  by  a  by-law  passed  without  his  assent  or  perhaps  knowl- 
edge, by  those  who  do  not  consult  his  individual  interests."  ' 

^24.  Alteration,  amendment  and  suspension  of  by- 
laws.— Neither  the  majority  of  the  members  nor  the  board 
of  directors  have  a  right  to  disregard  a  by-law  which  has  been 
properly  passed.2  If  it  is  objectionable  it  should  be  re- 
pealed or  amended  in  the  manner  prescribed  in  the  laws  of 
the  society.  An  incorporated  society  possesses  inherent 
power  to  alter,  amend  or  suspend  its  by-laws,  provided  that  in 
doing  so  it  does  not  interfere  with  vested  rights.  Subject  to  the 
same  proviso,  an  unincorporated  society  may  alter,  amend  or 
suspend  its  by-laws  in  the  manner  and  to  the  extent  set  forth 
in  the  contract  of  association.  No  member  of  a  society  has 
any  vested  right  in  the  fund,  where  its  articles  of  association 
provide  that  under  certain  circumstances  and  conditions  the 
society  will  look  into  his  claim,  and  grant  him  such  relief  as 
shall  appear  just  and  reasonable  ;  and  the  society  may,  in  the 
manner  prescribed,  change  its  rule  for  the  disposition  of  its 
fund,  and  make  a  new  rule  wholly  different  from  that  which 
before  existed.3  A  member  of  a  society  does  not  stand  in  the 
relation  of  a  creditor  to  the  society,  and  he  can  claim  only 
such  benefits  as  are  prescribed  by  the  by-laws  existing  at  the 
time  he  applies  for  relief.     A  by-law  of  a  society  provided  that 

1  Ang.  &    Ames  on  Corp.,   §  342;  s§97. 

Goddard  v.    Merchants'    Exchange,  3Stockdale   v.  School  District,  47 

9   Mo.  App.  290;  79  Mo.  609;  Austin  Mich.  226. 
v.  Searing,  16  N.  Y.  112. 


BY-LAWS.  51 

a  member  who  was  taken  sick,  or  otherwise  disabled  from  fol- 
lowing his  usual  or  other  employment,  on  application  should 
receive  five  dollars  a  week.  In  October,  1STG,  the  following- 
by-law  was  passed,  according  to  the  rules  of  the  society :  "  Be 
it  resolved,  that  we  suspend  the  weekly  payments  of  benefits 
to  the  sick  members  until  there  is  $800  in  the  treasury." 
Plaintiff  was  a  member  at  the  time  of  the  adoption  of  this  by- 
law, and  had  been  long  prior  thereto.  He  became  sick  in  Jan- 
uary, 1877,  and  so  continued  until  March  17,  1877.  The  court 
held  that  this  latter  by-law  was  binding  upon  the  plaintiff,  and 
that  he  was  not  entitled  to  sick  benefits  unless  there  was 
$800  in  the  treasury.1  In  1810,  plaintiff  became,  and  ever 
since  had  been,  a  member  of  Hudson  City  Lodge  of  Odd  Fel- 
lows. The  constitution  and  by-laws  which  were  signed 
by  plaintiff  provided  that  during  the  sickness  of  a  member 
qualified  to  receive  sick  benefits,  he  should  receive,  if  he 
had  attained  the  scarlet  degree,  four  dollars  per  week 
after  the  first  two  weeks.  The  constitution  also  pro- 
vided that  the  lodge  might  make,  alter  or  amend  its 
by-laws,  and  the  manner  of  doing  so  was  pointed  out 
in  the  by-laws.  July  9,  1878,  the  by-laws  were  regularly 
amended,  so  as  to  reduce  the  benefit  of  a  brother  who  had 
been  sick  for  twelve  months,  to  one  dollar  per  week.  The 
plaintiff  was  taken  sick  October  5,  1875,  and  continued  so  un- 
til the  commencement  of  this  action.  He  was  of  the  scarlet 
degree,  and  entitled  to  receive  sick  benefits.  He  was  paid 
four  dollars  a  week  down  to  July  9,  1S78,  and  after  that  date 
one  dollar  a  week.  He  brought  suit  to  recover  an  additional 
three  dollars  a  week  from  July  9,  1878.  The  court  held  that 
as  the  only  contract  between  the  plaintiff  and  the  lodge  was 
contained  in  the  constitution  and  by-laws,  they  should  all  be 
considered  together;  that  the  lodge  had  the  right  to  alter  the 
by-law  fixing  the  amount  to  be  paid  to  sick  members,  after 
the  plaintiff  was  taken  sick,  and  that  he  could  not  receive  the 
amount  prescribed  by  the  former  one.1'  The  view  taken  by 
the  court  in  this  case  was  that  this  by-law  did  not  seek  to  de- 
prive members  of  any  rights  which  might  have  been  acquired 

•St.  Patrick's  Society  v.  McVey,  sPoultney  v.  Backmann,  31  Him 
92  Pa.  St.  510;  see  also  McCabe  v.  49,  overruling  62  How.  Pr.  466  and 
Father  Mathew  Society,  24  Hun  149.     10  Abb.  N.  C.  252. 


52  BY-LAWS. 

under  the  former  by-law;  it  was  not  intended  to  be  retroact- 
ive. The  society  acknowledged  its  liability  under  the  former 
by-laws,  and  paid  the  sick  member  according  to  its  terms. 
The  new  by-law  was  a  proper  one  for  the  society  to  pass, 
and  it  was  binding  for  the  future  upon  all  its  members  whether 
they  were  sick  or  well  at  the  time  of  its  passage.  A  member  is 
bound  by  proper  by-laws  legally  passed,  whether  he  is  sick  or 
well.  If  the  society  had  sought  to  give  the  by-laws  a  retro- 
active force,  and  to  deprive  him  of  three  dollars  a  week  for  any 
time  he  had  theretofore  been  sick,  it  would  have  been  null  and 
void.  The  by-laws  of  a  society  provided  that  a  member  should, 
in  case  of  sickness  or  accident,  by  which  he  was  incapacitated 
from  following  his  business,  be  entitled  "  to  receive  $10  per 
Aveek,  to  take  effect  from  the  day  of  such  notice."  A  member 
became  sick  on  January  1,  1883,  and  the  society  paid  him 
$10  per  week  from  that  day  to  December  1,  1883.  The 
general  laws  of  the  state  and  the  by-laws  of  the  society  gave 
to  the  corporation  the  right  to  repeal,  alter  or  amend  its  In- 
laws, and  on  April  21,  1883,  the  following  by-law  was  adopted 
by  it :  "  If  any  member,  after  the  adoption  of  this  section 
shall  have  received  benefits  continuously  for  six  months,  or 
shall  have  received  benefits  to  the  amount  of  $260  within  a 
period  of  time  not  exceeding  twelve  consecutive  months,  the 
payment  of  further  benefits  to  such  member  shall  thereafter 
cease."  Although  the  member's  incapacity  continued  after 
that  date,  the  society  refused  to  pay  him  after  December  1, 
1S83.  The  member  claimed  that  the  by-law  giving  a  right  to 
benefits  constituted  a  contract  which  could  not  be  changed, 
during  his  illness,  so  as  to  affect  him.  But  the  court  referred 
to  the  power  given  to  the  society  by  the  laws  of  the  state  and 
its  by-laws,  and  said :  "  In  view  of  this  power  to  alter  the 
contract,  it  can  not  be  said  that  the  defendant  could  not  alter 
its  by-laws  in  any  respect.  The  respondent  argues,  however, 
that  it  had  no  power  to  alter  them  so  as  to  impair  a  vested 
rio-ht.  This  must  be  conceded,  but  we  do  not  think  that  the 
new  by-law  purported  to  impair  a  vested  right.  The  term 
"  vested  right "  is  often  loosely  used.  In  one  sense  every  right 
is  vested.  If  a  man  has  a  right  at  all,  it  must  be  vested  in 
him ;  otherwise  how  could  it  be  a  right  ?  The  moment  a  con- 
tract is  made  a  right  is  vested  in  each  party  to  have  it  remain 


BY-LAWS.  .53 

unaltered,  and  to  have  it  performed.  The  term,  however,  is 
frequently  used  to  designate  a  right  which  has  become  so  fixed 
that  it  is  not  subject  to  be  divested  without  the  consent  of  the 
owner,  as  contradistinguished  from  rights  which  are  subject  to 
be  divested  without  his  consent.  Now  a  right,  whether  it  be 
of  such  a  fixed  character  or  not,  must  be  a  right  to  something; 
and,  when  a  man  talks  vaguely  of  his  vested  right,  it  conduces 
to  clearness  to  ask  :  'A  vested  right  to  what  ? '  In  the  present 
case  the  plaintiff  can  have  no  right  to  have  the  contract  remain 
unchanged,  because,  as  we  have  seen,  the  contract  itself  provides 
that  it  may  be  changed.  Nor  has  he  a  right  to  remain  un- 
affected by  any  change  that  may  be  made  ;  for,  if  such  right 
be  common  to  all  the  members,  it  is  merely  another  way  of 
saying  that  no  change  can  be  made ;  and,  if  the  right  be  not 
common  to  the  other  members,  it  would  be  to  assert  a  priv- 
ilege or  superiority  over  them  of  which  there  is  no  pretense. 
If  the  plaintiff  has  any  right  which  is  so  fixed  that  it  is  not 
subject  to  change,  we  think  it  can  only  be  to  the  fruits  which 
ripened  before  the  change  was  made ;  in  other  words,  to  such 
sums  as  became  due  before  the  new  by-law  was  adopted.  To 
express  it  differently,  the  change  could  not  be  retroactive.  This 
is  all  that  we  think  can  be  meant  by  '  vested  right '  in  a  case 
like  the  present.  Now,  under  the  contract,  nothing  was  due 
before  the  sickness  actually  took  place.  Benefits  do  not  ac- 
crue for  future  sickness.  The  right  of  the  plaintiff  to  benefits 
for  future  sickness  is  not  different  in  its  nature  from  the  right 
of  the  well  members  to  benefits  for  future  sickness.  In  the 
one  case  the  members  have  a  right  to  future  payment  in  case 
they  become  sick;  in  the  other,  the  plaintiff  has  a  right  to 
future  payments  in  case  he  continues  sick.  And  if  there  was 
no  power  to  change  the  by-law  in  the  one  case,  there  was  no 
power  to  change  it  in  the  other,  which  is  equivalent  to  saying 
that  there  was  no  power  to  change  it  at  all.  The  eases  where 
a  specific  sum  becomes  due  upon  the  happening  of  a  certain 
event,  as  upon  death,  are  not  1  ike  the  present .  I  n  such  cases  an 
alteration  in  the  contractcan  not  be  made  after  the  fact ;  for 
that  would  be  to  make  that  not  due  which  had  already  become 
due.  We  are  inclined  to  think  that  the  foregoing  would  ap- 
ply if  the  by-law  under  consideration  had  specified  that  the 
weekly  payments  were  to  continue  as  long  as  the  sickness  con- 


54:  BY-LAWS. 

tinued.  But  it  does  not  so  specify.  The  time  during  which 
the  payments  were  to  continue  is  left  indefinite.  The  sub- 
stance of  the  contract  is,  in  our  opinion,  that,  in  case  of  sick- 
ness, the  member  is  to  receive  weekly  payments  for  an  indef- 
inite period  of  sickness,  subject  to  the  power  of  the  defendant 
to  change  the  provision  authorizing  such  payments,  so  far  as 
future  payments  are  concerned."  ' 

In  another  case  it  was  said :  "  Some  time  after  the  defend- 
ant society  became  liable  to  the  plaintiff  for  dues  at  the  rate 
of  $2.50  per  week,  and  after  it  had  paid  them  for  more  than 
one  year,  it  proceeded  to  amend  its  by-laws  so  as  to  reduce 
the  amounts  'of  benefits.  This  was  certainly  an  easy  mode  of 
relieving  the  society  from  an  obligation,  and,  if  successful,  will 
doubtless  be  followed  by  other  similar  associations.  The  diffi- 
cultv  in  the  way  of  this  convenient  mode  of  paying  debts  is 
that  it  is  repudiation  pure  and  simple.  The  argument  that  the 
plaintiff,  being  a  member  of  the  society,  is  bound  by  the  by- 
law, does  not  meet  the  difficulty.  It  may  be  a  good  by-law 
as  to  future  cases,  but  at  the  time  it  was  passed  the  plaintiff 
was  something  more  than  a  member.  He  was  a  creditor 
whose  rights  had  previously  attached,  and  those  rights  cannot 
be  swept  away  by  such  a  scheme  as  this  by-law." ' 

In  another  case  it  was  held  that  an  amendment  to  the  by- 
laws of  a  mutual  benefit  society,  providing  for  the  payment 
of  stated  benefits  for  sick  members,  which  reduces  the  amount 
of  such  benefits,  does  not  affect  a  right  to  such  benefit,  which 
had  become  vested  by  the  sickness  of  the  member  before  the 
adoption  of  such  amendment,  although  made  by  virtue  of  a 
by-law  in  force  when  such  member  joined  the  society,  permit- 
ting the  amendment  of  any  by-law.  By  one  of  the  by-laws  of 
the  society,  sick  members  were  entitled  to  receive  three  dollars 
i3er  week,  while  unable  to  pursue  their  usual  business.  In 
October,  1881,  Pellazzino,  a  member,  became  insane,  and  so 
remained.  By  the  original  by-laws  of  the  society,  the  usual 
right  to  amend  them  was  reserved;  and  on  October  31,  1882, 
an  amendment  was  duly  adopted,  limiting  benefits  to  sick 
members  to  thirteen  weeks  in  each  year.  The  only  question 
in  the  case  was  whether  the  rights  of  Pellazzino  to  benefits 

i  Stohr  v.  Society,  82  Cal.  557;  22  *  Becker  v.  Society,  144  Pa.  St.  232; 

Pac.  Rep.  1125.  22  Atl.  Rep.  699. 


BY-LAWS.  55 

during  his  then  existing  inability  were  collected  by  this  amend- 
ment. He  was  not  present  at,  and  did  not  agree  to  its  adop- 
tion. The  court  thought  that  his  rights  were  not  affected  by 
the  amendment  and  said  :  "A  right  to  amend  was  reserved. 
But  it  was  a  right  to  amend  the  by-laws,  not  to  repudiate  a 
debt.  A  by-law  provides  what  the  rights  of  members  shall  be 
in  certain  events,  if  they  continue  to  pay  their  dues  until  such 
events  happen;  this,  of  course,  by  virtue  of  the  reserved  right, 
may  be  amended  or  repealed.  But  when  the  event  happens, 
what  was  a  contract  depending  on  a  contingency,  becomes  in 
law  a  debt.  The  right  to  modify  a  contract  does  not  include 
the  right  to  repudiate  a  debt,  anymore  than  the  reserved  right 
of  a  legislature  to  repeal  the  charter  of  a  corporation  gives  it 
the  power  to  confiscate  its  property.  The  rights  of  Pellazzino 
as  a  member,  including  his  contingent  right  to  benefits,  were 
subject  to  modification,  whether  he  consented  at  the  time  or 
not;  his  rights  as  a  creditor,  when  by  falling  ill  he  became 
one,  this  contingent  right  so  becoming  fixed,  are  not  made  so 
by  the  language  of  the  contract  between  him  and  defendant, 
and  therefore  can  not  be  surrendered  except  by  his  consent  " ' 
In  an  action  upon  the  by-laws  of  an  incorporated  societv,  it 
appeared  that,  on  the  1st  of  November,  1877,  plaintiff  was  in 
arrears  to  the  society  for  dues,  but  on  November  14,  1S77,  he 
discharged  the  indebtedness.  On  December  14,  1877,  plaint- 
iff fell  sick  and  became  entitled  to  benefits.  These  were  not 
paid,  and  on  February  3,  1878,  a  by-law  was  passed  declaring 
that  a  person  in  arrears  should  not  be  entitled  to  benefits  until 
three  months  after  the  deficiency  should  be  discharged,  The 
society  claimed  for  the  by-law  a  retroactive  force,  and  refused 
to  pay  benefits  for  sickness  within  three  months  from  Novem- 
ber 14,  1S77.  The  supreme  court  of  New  York  held  that  the 
benefits  due  for  the  sickness  from  December  14,  ls77,  to 
February  3,  1.878,  were  a  legal  debt  from  which  it  could  not 
relieve  itself  by  making  a  new  by-law;  that  the  by-law  passed 
February  :'>,  1878,  could  not  visit  a  punishment  upon  plaintiff 
for  a  fault  committed  months  before  it  was  enacted."  A  by- 
law of  a  society  contained  this  provision  :     "  Upon  the  death,  of 

1  Pellazzino  v.  Society,  lGCin.  Law    N.  Y.  Weekly  Dig.  17:  2!)  Hun  074. 
Bull.  27.  Not  reported  in  full  in  Hun'sreports. 

-Coylc  v.  Fr.  Mathew  Society,  17 


56  BY-LAWS. 

one  who  has  been  a  member  of  the  association  for  six  months 
last  prior  to  his  death,  his  widow  shall  be  entitled  to  receive 
the  sum  of  four  dollars  monthly  during  widowhood."  A  mem- 
ber who  had  been  such  for  more  than  six  months  immediately 
prior  to  his  death,  died,  leaving  a  widow  surviving  him.  At 
the  time  of  his  death,  and  during  his  membership  in  the  society, 
there  was  a  by-law  of  the  society  as  follows  :  "A  revision  or 
alteration  of  the  articles  of  the  association  can  be  had  at  a 
general  meeting  of  the  members  thereof  by  a  majority  of  the 
votes  of  the  members  present."  Subsequent  to  the  death  of 
the  member,  the  by-law  first  set  forth  above  was  revised  in 
conformity  with  the  by-law  concerning  revisions  and  altera- 
tions, and  was  made  to  read  as  follows :  "  Upon  the  death  of 
a  member  each  person  who  may  be  a  member  of  the  society 
shall  pay  to  the  widow  of  the  deceased  member  the  sum  of  one 
dollar."  The  widow  sued  upon  the  original  by-law  for  the 
arrears  due  at  the  bringing  of  the  suit,  claiming  that  she  was 
entitled  to  four  dollars  per  month,  and  that  the  revised  by-law 
did  not  affect  her  rights.  The  court  said :  "  The  main  ques- 
tion is,  whether  the  allowance  to  the  plaintiff  was  not  cut  off 
by  the  adoption  of  the  new  article  after  the  death  of  her  hus- 
band. It  does  not  attempt  to  do  so  by  any  language  which 
points  to  such  a  result.  It  is  not  in  form  retroactive,  and, 
upon  familiar  rules  of  interpretation,  ought  not  to  be  so  con- 
strued as  to  cut  off  rights  already  fixed. 

"  It  must  be  conceded,  I  think,  that  the  provision  in  favor  of 
the  plaintiff  was,  in  all  respects,  binding  as  a  contract  between 
her  husband  and  the  association.  The  association  undertook 
to  pay  to  his  widow  a  monthly  allowance  after  his  death,  if,  at 
the  time  of  his  death,  he  was  a  member,  and  had  been  such 
member  for  the  preceding  six  months.  After  his  death,  it  is 
not  perceived  how  the  association  can,  by  adopting  a  new  ar- 
ticle, or  by  repealing  the  old  one,  relieve  itself  from  this  obliga- 
tion. But,  independent  of  this  consideration,  it  is  safe  to  say 
that  the  new  article  does  not,  in  form  or  substance,  attempt  to 
repudiate  its  obligations  when  they  had  already  been  fixed  by 
the  death  of  one  of  its  members."  '  In  1862,  a  person  became 
a  member  of  a  voluntary  association.  The  by-laws  of  the  as- 
sociation then  provided  that  members  paying  the  regular  assess- 

1  Gundlach  v.  Association,  49  How.  Pr.  190. 


BY-LAWS. 


57 


merits  should  be  entitled  to  twenty-five  cents  per  day  daring 
their  sickness  ;  that  the  society  would  pay  twenty-five  cents 
per  day  to  the  widow  of  each  member,  so  long  as  she  remained 
a  widow ;  that  the  by-laws  might  be  amended  in  conformity 
with  certain  specified  rules.  In  1S6S,  said  association  was  in- 
corporated by  act  of  the  legislature,  which  provided  that  it 
might  alter  or  change  its  by-laws.  The  by-laws  in  force  at  the 
time  of  the  passage  of  said  act  were  continued  in  force  till 
August,  1809,  when  the  society  adopted  new  by-laws,  wherein 
it  was  provided  that  such  widows  should  receive  twenty-five 
cents  per  day,  until  they  had  received  $200.  Prior  to  the 
amendment  of  the  by-laws,  on  January  5,  1S09,  the  member 
died,  leaving  his  widow  surviving  him.  She  was  paid  $200 
in  all  by  the  society,  and,  upon  the  failure  to  pay  her  twenty- 
five  cents  a  day  after  she  had  received  the  sum  of  $200,  she 
brought  an  action  for  about  $200  against  the  society,  being 
the  arrears  due  her  at  the  rate  of  twenty-five  cents  a  day  from 
the  time  she  had  received  the  $200,  as  provided  in  the  amended 
b}r-laws,  to  date  of  bringing  the  action.  The  court  held  that 
the  society  had  the  right  to  amend  its  by-laws  as  set  forth,  and 
that  the  widow,  having  received  $200,  was  precluded  from 
further  recovery.  In  its  opinion  the  court  said:  "The  regu- 
lation limiting  the  widow's  share  in  this  charity  to  $200,  was 
made  by  a  general  law,  and  applicable  to- all;  and  there  is  no 
suggestion  of  fraud,  or  that  the  regulation  was  not  wise  and 
salutary.  We  think  the  society  were  competent  to  make  this 
by-law;  and  having  fully  performed  the  duty  imposed,  the 
plaintiff  can  not  recover.  But  in  this  case  there  was  an  express 
provision  in  the  constitution  of  the  society  that  the  by-laws 
might  be  changed, and  the  manner  of  doing  it  was  specifically 
pointed  out;  so  that  the  husband  voluntarily  became  party  in 
an  association,  and  contributed  his  money  with  full  knowledge 
of  all  the  provisions  in  the  articles  of  association,  and  fully 
assented  to  the  same.  There  is  no  good  reason,  therefore,  for 
claiming  that  the  widow  had  a  vested  right  which  the  society 
could  not  modify."1 

•Fugure  v.  Mutual  Society  of  St.  with  its  necessities.    This  proposition 

Joseph,  46  Vt.  362.      The  reasoning  can  not   lie  doubted.      Hut   to   hold 

in  this  opinion  is  all  to  the  effect  that  that  a  by-law  maj  be  changed  by  the 

a  society  should   have  the  right   to  society  after  the  member   lias  per- 

change  its    by-laws    in    accordance  formed  his  part  of  the  contract,  and 


58  BY-LAWS. 

§  25.  Even  though  a  certificate  of  membership  in  a  mutual 
benefit  society  contains  upon  its  face  the  explicit  statement 
that  the  contract  of  insurance  evidenced  thereby  is  subject  to 
its  by-laws  and  to  any  amendments  thereto  which  may  there- 
after be  made,  it  is  subject  to  the  implied  condition  that  any 
subsequent  amendment  shall  be  reasonable ;  and  any  amend- 
ment which  entirely  changes  the  scheme  of  insurance,  and 
makes  a  radical  departure  from  the  fundamental  plan,  is  not  a 
reasonable  exercise  of  the  reserved  power  of  amendment.  An 
amendment  designed  to  perfect,  in  matter  of  form  and  detail, 
the  original  plan,  will,  if  otherwise  unobjectionable,  be  within 
the  terms  of  the  contract,  but  one  calculated  to  defeat  or 
destroy  that  plan,  or  to  substitute  for  it  some  other  and  essen- 
tially different  scheme,  will  be  an  abuse  of  the  power,  a  viola- 
tion of  the  contract  and  an  unreasonable  and  invalid  amend- 
ment. In  most  cases  it  is  easy  to  determine  whether  the 
change  in  the  by-law  is  a  mere  matter  of  detail  or  whether  it 
affects  the  principle  of  insurance  on  which  the  society  is  based; 
but  occasionally  a  society  finds  that  it  must  make  some  changes 
in  the  terms  of  its  contract;  that  it  must  form  new  classes  of 
certificate  holders,  even  though  the  result  is  that  persons  are 
thereby  induced  to  leave  other  classes  and  join  the  new  one, 
or  that  it  must  in  some  way  reduce  the  benefits  and  advan- 
tages promised  in  its  original  plan,  and  it  is  in  these  cases  that 
the  difficulty  arises  of  determining  whether  there  has  been 
such  an  abandonment  of  the  original  scheme  as  is  unreasona- 
ble and  invalid.  Where  a  society  has  contracted  that  certain 
advantages  shall  be  given  from  the  guaranty  fund  to  all  mem- 
bers who  have  paid  their  assessments  for  a  certain  number  of 
years,  it  is  clear  that  it  may  not,  as  the  time  approaches  for 
the  continuing  members  to  receive  these  advantages,  pass  an 
amendment  to  its  by-laws  declaring  that  no  part  of  the  guar- 

clied,  and  when  his  beneficiary  is  the  fragile  and  illusory  obligations 
calling  upon  it  to  perform  its  part  of  for  which  they  are  paying  out  their 
the  contract,  is  to  sanction  the  repu-  money,  the  better  it  will  be  for  them, 
diation  of  a  debt.  If  a  society  may  Legislators  may  not  pass  laws  which 
repudiate  its  part  of  the  contract  in  impair  the  express  obligations  of  a 
the  manner  above  stated, the  contract  contract,  and  mutual  benefit  societies 
of  insurance  issued  by  it  is  a  sham  should  not  be  permitted  to  do  so. 
and  a  snare,  and  the  sooner  members  People  v.  Fire  Department,  31  Mich, 
of  such  societies  are  made  aware  of  458;  Kent  v.  Mining  Co.,  78  N.  Y.  159. 


BY-LAWS.  59 

anty  fund  shall  be  used  for  that  purpose.  But  the  cases  set 
out  in  the  sections  treating  of  the  alteration  and  amendment 
of  by-laws  show  how  difficult  it  is  to  lay  down  any  rules  for 
guidance  on  this  subject. 

It  has  been  held  that  a  change  by  a  society  of  its  system  of 
insurance,  in  good  faith,  under  a  reserved  power  of  amend- 
ment, whereby  the  number  of  persons  in  a  certain  class  is  re- 
duced by  the  creation  of  another  class  in  which  insurance  is 
given  on  more  favorable  terms  to  persons  under  a  certain  age, 
and  in  which  certificate  holders  are  permitted  to  become  mem- 
bers of  the  new  class,  and  whereby  the  amount  to  be  realized 
by  an  assessment  upon  the  members  of  the  old  class  is  cut 
down  by  reason  of  withdrawals  from  that  class,  is  not  such  a 
wrongful  act  or  breach  of  contract  as  renders  the  society  liable 
to  the  beneficiary  beyond  the  amount  which  will  be  realized 
from  such  an  assessment.  But  even  if  the  depletion  of  the 
class  mentioned  constituted  a  breach  of  contract,  the  damages 
are  too  remote  and  conjectural,  to  form  the  basis  of  a  recovery.1 

"Where  a  certificate  provides  for  its  payment  "  in  an  amount 
to  be  computed  according  to  the  laws  of  the  society,"  and 
these  provide  that  the  provisions  in  regard  to  the  payment  of 
such  certificates  may  be  changed  at  any  time,  a  member  is 
bound  by  a  change  made  in  such  laws  after  the  issue  of  his 
certificate  and  before  the  time  for  its  payment.2 

§  26.  Whether  or  not  a  member  is  bound  by  an  amendment 
to  the  by-laws  adopted  after  his  contract  of  insurance  was 
made,  depends  upon  the  terms  of  this  contract,  or  upon  his 
consent  to  the  change.  If  the  contract  provides  that  he  shall 
be  bound  by  any  such  amendment,  and  it  is  properly  passed, 
there  is  no  reason  why  it  should  not  be  valid  against  him.  In 
such  a  case,  the  change  is  not  made  in  violation  of  the  contract 

1  Supreme  Lodge  y.  Knight,  117  Ind.  only  where  then' is  an  abuse  of  dis- 

489;  20  N.  East.  Rep.  479.    [n  this  case  cretion   and    a   clear,   unreasonable 

it  was  said:    "The  duly  chosen  and  and   arbitrary    invasion    of    private 

authorized    representatives    of    the  rights  that  courts  wil]  assume  juris- 

membera  alone  are  vested  with  the  diction  over  such  societies  orcorpo- 

power  of  determining  when  a  change  rations."      Crossman  v.    A&s'n,   L48 

is  demanded,  and  with  their  discre-  Mass.  435;    Eussev   v.   Gallagher,  61 

tion  courts  can  not  interfere.     Were  Ga.  86;  see;  ill. 

it  otherwise,  courts  wonlil  control  all  -Howie   v.   Grand   Lodge,   99  Cal. 

benevolent    associations,    all    corpo-  892;  :'.  1  Pac.  hep.  103. 
rations,  and    all    fraternities.     It   is 


60  BY-LAWS. 

but  in  harmony  with  it.  Where  the  contract  provides  that 
the  by-laAVs  may  be  amended  so  as  to  affect  its  terms,  the  first 
and  primary  inquiry  is  whether  the  body  which  made  the 
change  has  done  all  that  was  necessary  to  give  it  the  right  to 
act,  or,  in  other  words,  whether  that  body  had  jurisdiction  to 
proceed  in  the  matter;  and  the  next  inquiry  is  whether  the 
amendment  was  passed  in  accordance  with  the  rales  and  by- 
laws. 

Where  the  by-laws  stipulate  that  members  may  alter  or 
amend  them  b}^  a  majority  vote  of  those  present,  provided  all 
the  members  shall  have  had  previous  notice  of  the  proposed 
alteration,  by  mail  or  otherwise,  notice  must  be  given  to  all 
the  members  in  order  that  changes  shall  be  binding  upon  those 
not  present  or  present  only  by  proxy.  In  such  a  case,  where 
the  by-laws  in  force  when  a  member  obtained  his  certificate 
are  afterward  amended  at  a  meeting  which  he  did  not  attend, 
such  amendments  are  not  binding  on  him  unless  it  is  affirma- 
tively shown  that  the  meeting  was  called  in  the  manner  pro- 
vided by  the  constitution.1 

Where  the  by-laws  of  a  society  provide  that  no  changes  in 
the  by-laws  shall  be  made  except  at  its  annual  meeting,  and 
that  none  shall  then  be  made  unless  two-thirds  of  the  members 
present  agree  thereto,  no  change  may  be  made  except  in  the 
manner  prescribed,  and  a  change  of  the  by-laws  at  the  annual 
meeting,  by  a  vote  of  less  than  two-thirds  of  the  members  pres- 
ent, is  invalid,  although,  after  the  meeting  is  adjourned,  enough 
other  members  to  make  up  the  requisite  number  request  in 
writing  to  be  permitted  to  record  their  votes  in  the  affirmative.2 
The  organic  law  of  a  society  provided  :  "  Every  by-law,  and 
every  repeal,  amendment  or  re-enactment  thereof,  unless  in  the 
meantime  confirmed  at  a  general  meeting  of  the  company  duly 
called  for  that  purpose,  shall  only  have  force  until  the  next 
annual  meeting  of  the  company,  and  in  default  of  confirmation 
thereof  shall  from  that  time  only  cease  to  have  force."  A  by- 
law of  the  society  provided  :  "  These  by-laws,  rules  and  regu- 
lations, and  the  plan  and  system  of  membership,  may  be 
annulled,  amended  or  changed  by  a  majority  vote  of  all  the  di- 

1  Metropolitan  Association  v.  Wind-  2  Torrey  v.  Baker,  1  Allen  (Mass.) 
over,  137  111.  417;  27  N.  East.  Rep.  538;  120;  Hochreiter's  Appeal,  93  Pa.  St. 
37  111.  App.  170;  see  §  108.  479. 


BY-LAWS.  61 

rectors  at  one  of  the  regular  meetings  of  the  association."  It 
was  held  that  a  by-law  as  changed  by  the  board  of  directors 
ceased  to  exist  after  the  next  annual  meeting,  at  which  it  was 
not  confirmed.1  Where  there  is  nothing  in  the  contract  of  in- 
surance which,  in  terms  or  by  implication,  authorizes  any 
change  in  its  provisions  or  conditions,  by-laws  subsequently 
passed  do  not  become  a  part  of  that  contract.  Of  course,  they 
may  be  made  a  part  of  it  by  the  consent  of  the  member,  and 
where  he  acts  under  them,  and  clearly  recognizes  them  as 
modifying  it,  he  will  be  estopped  to  deny  that  he  has  consented 
to  the  modification.  They  become  effective  in  this  case  by 
reason  of  his  conduct,  not  by  reason  of  their  enactment.  But 
a  mere  acquiescence  in  the  validity,  force  and  effect  of  by-laws 
passed  subsequent  to  the  issue  of  his  certificate  does  not  nec- 
essarily imply  that  he  consents  that  they  shall  modify  his  con- 
tract. Where  the  change  does  not  necessarily  affect  contracts 
Avhich  have  been  issued,  it  will  be  taken  for  granted  from  his 
acquiescence  in  them  that  he  recognizes  them  as  having  their 
ordinary  effect.  Ordinarily,  by-laws  operate  prospectively  only, 
and  it  will  be  presumed  that  they  are  not  intended  to  affect 
contracts  already  entered  into.  A  member  may  know  that 
certain  amendments  to  the  by-laws  have  been  passed,  or  he 
may  even  vote  for  them,  but  it  does  not  follow  from  this  that 
he  consents  that  they  may  have  a  retroactive  force,  and  may 
modify  a  contract  which  he  holds  with  the  society. 

After  the  issue  of  a  certificate,  a  society  passed  this  by-law  : 
"Death  executed  by  the  hand,  act  or  procurement  of  the 
member,  whether  voluntary  or  involuntary,  sane  or  insane  at 
the  time,  is  a  risk  not  assumed  by  the  association."  In  com- 
menting  upon  it  the  court  said:  "This  by-law  does  not, 
except  by  mere  implication,  refer  to  the  holders  of  certificates 
already  issued.  We  ought  not  to  construe  this  language  so  as  to 
refer  back  and  affect  certificates  then  existing,  but  rather  so 
•as  to  affect  those  issued  thereafter.  The  words  'not  assumed 
by  this  association'  should  be  construed  to  read  k  will  not  here- 
after.' Thus  construed,  the  by-law  would  not  cover  the  case 
of  the  certificate  here  involved.  The  fact  that  (the  member) 
had  notice  of  its  passage  could  not  enlarge  its  meaning."  a 

'Johnson  v.  Association,  2  Daily  •  North  western  Association  v.  Wau* 
R.-cord  ^Baltimore  Cir.  Ct.)  441.  ner,  24  111.  App.  359. 


62  BY-LAWS. 

Where  there  is  nothing  in  the  original  contract  which,  in 
terms  or  by  implication,  authorizes  any  change  in  its  provisions 
or  conditions,  by-laws  subsequently  passed  do  not  become  a 
part  of  that  contract.  A  member  of  a  society  was  present  at 
a  meeting  and  voted  for  the  adoption  of  a  new  article  of  the 
constitution  providing  that  members  should  not  be  permit- 
ted to  engage  in  extra-hazardous  occupations,  such  as  a  car- 
coupler.  The  article  was  adopted,  and  afterward  the  mem- 
ber became  a  car-coupler  and  was  killed  while  doing  duty  as 
such.  There  was  nothing  in  the  original  contract  which  pro- 
hibited him  from  becoming  a  car-coupler,  or  which  authorized 
any  change  in  its  provisions,  and  the  new  article  was  held  to 
apply  only  to  agreements  made  after  its  adoption,  as  it  was 
not  by  its  terms  retroactive.1 

§  27.  It  is  a  recognized  rule  in  the  construction  of  statutes 
that  they  shall  be  so  construed  as  to  give  them  a  prospective 
operation  only,  and  that  they  shall  be  permitted  to  operate 
retrospectively  only  where  the  intention  to  have  them  so 
operate  is  clear  and  undoubted.  The  same  canon  of  construc- 
tion should  be  applied  to  amendments  and  alterations  of  the 
by-laws  of  a  society.  They  should  not  apply  to  or  set  aside 
acts  already  done  under  the  sanction  of  the  by-laws,  unless  it 
clearly  and  unmistakably  appears  that  the  authority  adopting 
them  intended  that  they  should  do  so.  It  will  be  presumed 
that  an  amendment  to  the  by-laws  was  not  intended  to  affect 
a  contract  of  insurance  previously  issued  by  the  society.1 

A  certificate  was  issued  on  May  8, 1888,  payable  to  such  per- 
son as  it  should  be  assigned  to  by  the  member.  The  member 
at  once  assigned  it  and  made  it  payable  to  his  mother.  On 
October  5,  1888,  he  was  married.  On  October  17,  1888,  the 
society  duly  and  legally  changed  its  constitution  as  follows : 
"  Any  brother  desiring  to  make  a  transfer  of  his  benefit  policy 
can  do  so,  in  writing,  on  the  back  of  his  policy,  and  in  the 
form  prescribed  for  that  purpose,  to  be  attested  to  by  the  sec- 
retary of  the  lodge  under  the  lodge  seal.  Should  a  second 
transfer  be  desired,  a  duplicate  policy  shall  be  issued  by  the 
grand   secretary  and  treasurer,  upon   the  return  of   the  old 

1  Hobbs  v.    Association,   82    Iowa       9  §§  136,  137. 
107 ;  47  N.  W.  Rep.  983 ;  see  Morri- 
son v.  Ins.   Co.,  59   Wis.  165  ;  18  N. 
W.  Rep.  13. 


BY-LAWS.  63 

policy.  'Where  marriage  is  contracted  after  the  issuance  of 
policy,  and  said  policy  becomes  payable  through  death,  it  shall 
be  paid  to  the  widow,  or,  in  the  event  of  her  death,  to  their 
joint  issue,  if  any,  unless  otherwise  ordered.  All  transfers  of 
benefit  policies  shall  be  recorded  in  the  membership  and  policy 
register  of  the  subordinate  lodge  and  in  the  grand  lodge." 
Proof  of  the  death  of  the  member  was  made  and  served  Janu- 
ary 1,  1889,  by  the  mother  of  the  deceased,  but  the  society 
paid  the  fund  to  the  widow.  In  the  suit  of  the  mother  against 
the  society  it  was  expressly  admitted  at  the  hearing  that  the 
indorsement  made  by  the  member  on  his  certificate  at  the  time 
it  was  issued,  was  a  sufficient  designation  of  his  mother  as  his 
beneficiary,  under  its  then  existing  laws,  and  that  the  indorse- 
ment remained  as  it  was  made,  but  it  was  contended  by  the 
society  that  the  amended  constitution  of  October,  1888,  des- 
ignated a  new  beneficiary  for  the  member.  On  this  point  the 
court  said  : '  "  There  is  nothing  in  the  language  of  the  section 
of  the  amended  constitution  under  consideration  evidencing  an 
intention  to  give  it  a  retrospective  operation.  It  does  not  at- 
tempt, either  in  terms  or  by  necessary  implication,  to  abrogate 
or  set  aside  designations  of  beneficiaries  already  made  in  con- 
formity with  existing  rules,  but  it  merely  provides  that  'unless 
otherwise  ordered,' — that  is,  in  the  absence  of  any  other  des- 
ignation,— the  widow,  if  there  is  one,  shall  be  the  beneficiary. 
We  see  no  reason  why  the  words,  'unless  otherwise  ordered,' 
should  be  so  construed  as  to  require  a  new  designation  of  a 
beneficiary  after  the  adoption  of  the  amendment,  so  long  as  a 
valid  designation  was  already  in  existence.  The  words  apply 
just  as  readily  to  a  designation  already  made  as  to  one  there- 
after to  be  made.  If  the  convention  which  adopted  the 
amended  constitution  intended  to  make  the  widow  the  bene- 
ficiary unless  another  designation  should  be  thereafter  made, 
it  would  have  been  easy  to  employ  language  which  would 
clearly  express  thai  intention.  But  the  words  used  being  such 
as  apply  just  as  readily  to  a  past  as  to  a  future  designation, 
the  provision  should  not  be  so  construed  as  to  set  aside  valid 
designations  already  in  existence,  but  to  simply  mean  that,  if 
a  member,  after  obtaining  his  certificate,  marries,  and  the  cer- 
tificate becomes  payable  by  reason  of  his  death,  his  widow 

1  Benton  v.  Brotherhood,  143  HI.  370;  3-1  N.  East.  Rep.  939. 


64  BY-LAWS. 

shall  become  his  beneficiary  unless  he  has  otherwise  ordered ; 
that  is,  unless  there  is  in  existence  a  valid  designation  of  an- 
other beneficiary.  Here  the  member  had  designated  his 
mother  as  his  beneficiary,  and  that  designation  remained  in 
full  force  and  unrevoked  at  the  time  of  his  death.  This  clearly 
constituted  an  order  to  pay  the  money  to  his  mother,  within 
the  meaning  of  the  amended  constitution,  and  it  follows  that 
the  money  was  payable  to  her,  and  not  to  the  widow." 

Members  may  contract  in  reference  to  laws  of  future  enact- 
ment,— may  agree  to  be  bound  by  any  future  by-laws  or 
amendments  which  may  be  passed  by  the  society,  as  if  they 
were  existing  at  the  date  of  the  contract.  They  may  consent 
that  new  by-laws  or  amendments  shall  enter  into  and  form 
parts  of  their  contracts,  modifying  or  varying  them.  But  the 
fact  that  a  member  has  consented  to  be  bound  by  future  laws 
or  amendments  does  not  alter  the  rule  that  they  will  be  given  a 
prospective  operation  in  the  absence  of  a  clear  intent  that  they 
shall  act  retrospectively.1  A  contract  expressly  provided  that 
the  member  should  comply  with  all  the  laws,  regulations  and 
requirements  which  were  or  might  thereafter  be  enacted  by 
the  society.  He  made  a  valid  designation  of  a  beneficiary  who 
was  not  in  any  way  related  to  him  or  dependent  on  him. 
Afterward  the  law  relating  to  beneficiaries  was  changed,  and 
read  as  follows :  "  Each  member  shall  designate  the  person  or 
persons  to  whom  the  beneficiary  fund  due  at  his  death  shall 
be  paid,  who  shall  in  every  instance,  be  one  or  more  members 
of  his  family,  or  some  one  related  to  him  by  blood,  or  who 
shall  be  dependent  upon  him."  He  died  without  having  des- 
ignated a  new  beneficiary.  It  was  contended  on  the  part  of 
the  society  that  the  above  law  was  retroactive,  and  intended  to 
annul  the  appointment  of  beneficiaries  theretofore  made,  who 
did  not  belong  to  the  classes  specified  in  it;  and  that  the  contract 
of  the  member  was  to  comply  with  and  be  bound  by  the  laws 
of  future  enactment  as  if  they  were  already  existing.     But  it 

'§136;  Supreme  Commandery  v.  N.  Y.  Supp.  801;  Bowie  v.  Grand 
Ainsworth,  71  Ala.  436;  Northwestern  Lodge,  99  Cal.  392  ;  34  Pac.  Rep.  103; 
Association  v.  Wanner,  24  111.  App.  Hogan  v.  League,  99  Cal.  248 ;  33 
359  ;  Hobbs  v.  Association,  82  Iowa  Pac.  Rep.  924 ;  Stohr  v.  Society,  82 
107  ;  47  N.W.  Rep.  983  ;  Morrison  v.  Cal.  557  ;  22  Pac.  Rep.  1125  ;  Mont- 
Ins.  Co.,  59  Wis.  165  ;  18  N.W.  Rep.  gomery  Ins.  Co.  v.  Milner  (Iowa),  57 
13  ;  Hutchinson  v.  Supreme  Tent,  22  N.  Y.  Rep.  612. 


BY-LAWS.  65 

was  held  that  the  language  of  the  law  was  wholly  prospective 
in  its  operation,  affecting  the  power  to  appoint  beneficiaries 
after  it  was  passed  ;  that  it  applied  to  new  members,  of  course, 
but  only  to  such  old  members  as  changed  their  beneficiaries 
after  its  passage.1 

Ketroactive  by-laws  are  regarded  as  impolitic  and  unwise, 
and  the}^  may  often  be  said  to  be  unjust  and  oppressive. 
Although  they  may  in  a  given  case  be  valid,  they  will  always 
be  subjected  to  such  a  construction  as  will  circumscribe  their 
operation  within  the  narrowest  possible  limits,  consistent  with 
the  manifest  intention  of  the  society  as  indicated  by  the  lan- 
guage used.  When  it  can  be  avoided  they  will  not  be  per- 
mitted to  destroy  the  validity  of  a  certificate  and  to  deprive  a 
person  of  all  rights  under  it.  In  one  case  a  member  designated 
as  his  beneficiary  a  person  who  was  not  in  any  way  related  to 
him  or  dependent  on  him,  as  he  had  a  right  to  do  under  the 
c<  mtract.  Afterward  the  by-laws  were  changed  so  as  to  restrict 
the  beneficiaries  to  the  family  or  relatives  by  blood  of  the 
member  or  some  one  dependent  upon  him.  From  the  time  of 
the  designation  of  his  beneficiary  to  the  time  of  his  death, 
some  months  after  the  change  in  the  by-laws,  the  member  had 
no  family  or  relatives  by  blood  or  any  one  dependent  upon 
him.  The  court,  assuming  that  the  by-law  was  retroactive 
under  the  peculiar  terms  of  the  contract,  held  that  it  was 
addressed  retroactively  only  to  those  who  could  comply  with 
its  terms;  that  it  did  not  apply  in  the  case  before  it,  and  that 
the  beneficiary  was  entitled  to  the  fund.2 

§  28.  Repeal  of  by-laws. — It  is  evident  that  the  power  to 
enact  by-laws  implies  also  the  power  to  repeal  them,  and  every 
by-law  may  be  repealed  by  the  same  body  which  made  it.3  A 
by-law  which  can  be  passed  only  by  a  two-thirds  vote,  may 
not  be  rescinded  by  a  bare  majority;4  but  a  by-law,  requiring  a 
two-thirds  vote  to  alter  the  by-laws,  may,  nevertheless,  be 
repealed  by  a  majority.     Voluntary  societies  frequently  make 

1  Wist  v.  Grand  Lodge,  22  Oregon,        8  Rex  v.  Ashwell.  12  Easi  22;  Smith 
271;  29  Pac.   Rep.    610;  citing  End.    v.  Nelson,  18  Vt.  511;  see  §  ill. 
Interp.    Stat.    §273;    Sedgw.  St.    &       *Stockdale  v.    School   District,  47 
Const.    Law,    161;    Hedger  v.  Ren-    Mich.  220. 
oaker,    3  Mete.  (Ky.)258. 

•  Wist  v.  Grand  Lodge,  22   Oregon 
271;  29  Pac.  Rep.  610. 
5 


66  BY-LAWS. 

constitutions  and  pass  by-laws  and  declare  that  they  ma,j  not 
be  altered  or  amended  except  in  a  certain  mode  or  manner,  as 
by  a  two-thirds  vote,  or  by  votes  to  be  taken  at  two  different 
meetings.  In  such  cases,  alterations  or  amendments  must  be 
so  made.  But  their  constitutions  and  by-laws  may  at  any 
time  be  altered  or  abrogated  by  the  same  power  which  created 
them;  and  the  vote  of  any  subsequent  meeting  altering  or 
abrogating  them,  though  passed  only  by  a  majority,  has  as 
much  efficacy  as  a  previous  vote  establishing  them.1  In  a 
corporation  the  power  to  enact  by-laws  is  continuous,  and  no 
one  has  a  right  to  presume  that  by-laws  will  remain  unchanged. 
They  may  be  changed  whenever  the  welfare  of  the  corporation 
requires  it  and  the  change  is  not  forbidden  by  its  organic  law.2 

1  Smith  v.  Nelson,  supra;   Richard-       2  Supreme    Lodge  v.    Knight,    117 
son  v.  Union  Society,    58  N.  H.  187;    Ind.  489;  20  N.  East.  Rep.  479. 
Commonwealth  v.    Mayor  of    Lan- 
caster, 5  Watts  152;  see  §  105. 


CHAPTER  IV. 

MEMBERSHIP.— PART  I. 

§  29.  Admission  into  incorporated  societies. 

30.  Admission  into  unincorporated  societies. 

31.  Election  to  membership. 

32.  Who  are  members  of  a  mutual  benefit  society. 

33.  Membership  in  religious  corporations. 

34.  Expulsion,  amotion,  suspension. 

35.  Power  of  amotion  in  incorporated  societies. 

36.  Power  of  incorporated  societies  to  expel  members. 

37.  Modern  doctrine  of  expulsion. 

38.  Power  of  expulsion  conferred  by  the  charter. 

39.  Breaches  of  corporate  duty. 

40.  Expulsion  from  religious  corporations. 

41.  Surrender  of  right  to  expel  members. 

42.  Double  sentence  of  society. 

43.  Statute  of  limitations. 

44.  Right  to  trial  by  jury. 

45.  Regularity  of  proceedings. 

46.  Record  of  proceedings. 

§  29.     Admission   into   incorporated    societies. — As   the 

power  of  admitting  new  members  is  incidental  to  an  incorpo- 
rated society,  it  is  not  necessary  that  such  power  be  expressly 
conferred  by  the  statute  under  which  it  is  organized,  or  by  its 
charter.  When  the  organic  law  of  the  society  and  its  charter 
are  silent  as  to  its  powers  in  this  regard,  the  society  may 
admit  to  membership  any  number  of  persons;  but  when  such 
law  or  charter  limits  and  restricts  the  power  of  admission  to  a 
particular  number,  it  erects  a  barrier  beyond  which  the  society 
may  not  pass.  Where  the  charter  of  a  society  provides  that 
it  shall  consist  of  not  more  than  one  hundred  active  members, 
and  may  bestow  honorary  membership  <>n  active  members 
under  such  regulations  as  may  be  prescribed,  the  society  may 
not  create  honorary  members,  except  from  active  members. 
And  when,  in  such  ease,  the  active  membership  has  reached 
one  hundred,  the  election  of  "contributing"  members  in  the 

(67) 


68  MEMBEKSHIP. 

same  manner  as  active  members,  is  void  as  being  evasive  of, 
and  conflicting  with  its  charter,  even  though,  the  privileges  of 
such  "  contributing  "  members  be  greatly  limited.1  Where  the 
statute  of  a  state  under  which  a  mutual  benefit  society  is 
organized,  requires  that  all  members  shall  be  citizens  of  that 
state,  and,  of  course,  of  the  United  States,  a  clause  in  the 
charter  of  such  society,  authorizing  persons  who  have  declared 
their  intention  to  become  citizens  of  the  United  States  to  be- 
come members,  is  illegal.2  Where  the  articles  of  incorporation 
prescribe  the  conditions  of  membership,  no  additional  restric- 
tions may  be  imposed,  without  amending  the  articles.3 

It  may  be  stated,  as  a  general  rule,  that  when  a  person  has 
applied  for  membership  in  an  incorporated  society,  and  has 
been  refused  admission,  he  is  without  remedy  to  compel  the 
society  to  admit  him.  It  would  be  manifestly  unjust,  and 
destructive  of  the  harmony  and  efficiency  of  such  societies  to 
compel  them  to  admit  persons  into  the  societies  merely  because 
they  possessed  the  qualifications  set  forth  in  the  organic  law. 
These  qualifications  are  necessarily  expressed  in  very  general 
terms,  and  do  not  take  into  consideration  many  elements  of 
character  which  do,  or  do  not,  make  persons  desirable  associ- 
ates and  members.  The  succession  of  membership  in  the 
corporation  is  to  be  kept  up  by  the  election  of  proper  members 
by  those  already  admitted  to  membership,  and,  to  the  mem- 
bers clothed  with  this  power  and  duty,  the  law  gives  the  right 
to  judge  of  the  qualification  necessary  for  membership.  Not 
only  are  the  relations  between  the  society  and  its  members 
voluntary  on  the  part  of  the  latter,  but,  as  a  corollary  to  this 
principle,  no  person  is  required  to  become  a  member.  Having 
never  been  admitted  to  the  right  of  enjoyment  of  the  property 
of  the  society,  or  to  any  interest  therein,  and  being  under  no 
obligation  to  take  upon  himself  the  privileges  and  duties  of 
membership,  the  excluded  applicant  has  received  no  legal 
injury,  and  the  courts  have  no  jurisdiction  to  interfere,  even 
though  the  exclusion  may  seem  to  be  the  result  of  malice  and 
arbitrary  injustice.  This  power  to  determine  whether  an 
applicant  possesses  the  qualifications  necessary  to  entitle  him 

'Diligent     Fire   Co.    v.  Common-        8 People  v.  Society,  41  Mich.  67. 
wealth,  75  Pa.  St.  291. 

2  Alsatian  Beneficial  Society,  35  Pa. 
St.  79. 


MEMBERSHIP.  69 

to  membership  in  the  society,  is  judicial  in  its  nature ;  and,  in 
determining  this  question,  the  society  affects  no  civil  or  prop- 
erty right  of  the  applicant;  there  is  nothing,  therefore, 
to  invoke  the  visitorial  power  of  the  courts  over  the  society. 
This  rule  is  not  changed  by  the  fact  that  the  applicant  claims 
to  have  been  a  member  of  a  society  with  similar  objects  and  a 
similar  name.  A  man  who  claims  to  be  a  Mason  may  not  in- 
voke the  aid  of  a  court  to  compel  an  incorporated  society 
of  Masons  to  admit  him  to  membership  in  that  society.  The 
courts  will  not  undertake  to  determine,  as  to  this  person,  or 
that,  whether  he  is  a  Mason,  an  Odd  Fellow  or  a  member  of 
any  organization,  and  whether,  as  such,  he  ought  to  be  ad- 
mitted to  fellowship  with  an  incorporated  society  of  Masons, 
Odd  Fellows,  etc.  These  matters  must  be  judicially  determined 
by  the  society  itself.  This  power  of  judicial  determination  of 
the  qualifications  of  an  applicant  for  membership  is  inherent 
in  the  society,  and  exists  whether  recognized  in  its  charter,  or 
not.1  But  where  the  law  provides  for  the  formation  of  a 
society  for  objects  of  public  benefit,  and  makes  it  the  duty  of 
a  certain  class  of  citizens  to  become  members  of  the  society,  in 
order  to  enjoy  certain  privileges  granted  by  the  laws  of  the 
land,  an  entirely  different  case  is  presented.  It  is  evident  that 
such  a  society  is  not  voluntary.  A  duty  is  imposed,  and  a 
privilege  conferred  upon  a  certain  class  of  citizens,  and  the  vis- 
itorial power  of  the  court  may  be  invoked  to  inquire  into  the 
exclusion  of  an  applicant  from  the  rights  and  duties  of  mem- 
bership. When  a  party  having  a  clear  presumptive  title  to  its 
enjoyment  applies  to  be  admitted  to  the  exercise  of  a  franchise 
in  such  a  society,  the  application  should  not  be  denied,  unless 
the  right  of  immediate  expulsion,  for  causes  then  subsisting,  be 
plain  and  unquestioned.  The  exclusion  of  such  an  applicant 
can  be  justified  only  by  facts  repelling  the  presumption  that 
he  was  qualified  for  admission,  or  by  extraneous  facts,  show- 
ing that,  if  his  application  had  been  granted,  there  were  then 
subsisting  causes,  making  a  clear  case  for  immediate  expul- 
sion."    Where  the  law  made  it  the  duty  of  the  physicians  of 

1  State  v.  Odd  Fellows,  8  Mo.  App.       !  Bagg's  Case,  11  Coke  99;  Ex  parte 
148;  Burt  v.  Grand   Lodge,  66  Mich.    Paine,  1  Hill  665;  People  v.  Medical 
83;  33  N.  W.  Rep.  13;  Connelly  v.  As-   Society,  32  N.  Y.  187. 
sociation,  58  Conn.  552;   20  Atl.  Rep. 
671. 


70  MEMBERSHIP. 

each  county  in  the  state  to  form  an  incorporated  medical 
society  for  that  county,  and  provided  that  any  physician  who 
should  not  become  a  member  of  such  society  in  his  county, 
should  forfeit  his  license,  and  become  subject  to  the  disabili- 
ties of  unlicensed  physicians,  it  was  held  that  a  licensed 
physician,  having  the  qualifications  prescribed  by  the  by-laws, 
might  proceed  by  mandamus  to  compel  the  society  to  admit 
him  to  membership,  upon  its  refusal  to  do  so.  In  the  same 
case  it  was  held  that  a  licensed  physician,  having  the  pre- 
scribed qualifications,  could  not  be  excluded  from  the  franchise, 
on  the  ground  that,  at  a  period  antecedent  to  his  application, 
he  had  advertised  in  the  newspapers  in  a  manner  contrary  to 
the  conventional  rules  of  the  society.  As  he  was  not,  at  the 
time  of  the  advertisement,  a  member  of  the  society,  he  did 
not  violate  its  law.  "Where  there  is  no  law,  there  is  no  trans- 
gression." The  court  said :  "  Those  who  were  members  of  the 
society  could  not  lawfully  be  expelled  for  antecedent  deviation 
from  the  code.  Much  less  could  such  deviation  be  alleged  as 
cause  for  exclusion  against  one  who  never  agreed  to  be  bound 
by  it,  and  as  to  whom  it  was  not  merely  an  inoperative,  but 
an  unknown  law." ' 

§  30.  Admission  into  unincorporated  societies. — Unincor- 
porated voluntary  societies  come  into  existence  by  the  mutual 
agreement  of  the  persons  forming  it,  and  the  privilege  of  mem- 
bership is  not  given  by  statute,  or  derived  through  prescrip- 
tion, but  is  created  and  conferred  by  the  organization  itself. 
The  law  can  not  compel  such  a  society  to  admit  an  individual 
to  membership,  and  a  person  who  has  applied  for  admission 
and  been  excluded  is  utterly  without  remedy  at  law,  however 
arbitrary  and  unjust  he  may  regard  the  exclusion.  Such  soci- 
eties may  prescribe  the  conditions  upon  which  persons  may  be 
admitted  to  membership,  and  they  are  the  exclusive  judges  as  to 
the  existence  of  such  conditions.  The  right  of  admission  to 
membership  is  voluntary  and  mutual  between  the  society  and 
individuals  desiring  to  become  members.  No  one  can  be  com- 
pelled to  join  the  society,  or  to  remain  a  member  against  his 
wish,  nor  can  the  society  be  compelled  to  admit  a  person 
against  its  will.     This  principle  is  inherent  in  every  voluntary 

1  People  v.  Medical  Society,  supra;  Gay  v.  Farmers'  Mutual,  51  Mich.  2-15. 


MEMBERSHIP.  71 

society.1  A  person  may  become  a  member  of  an  unincorpo- 
rated voluntary  society  by  paying  in  the  prescribed  amount  of 
money,  and  by  acting,  and  being  treated  and  considered  as  a 
member,  without  simiin^  the  constitution,  although  the  consti- 
tution  provides  that  any  person  wishing  to  become  a  member 
shall  sign  it,  if  he  is  elected  to  membership.* 

§  31.  Election  to  membership. — If  there  be  no  form  pre- 
scribed for  electing  members,  every  candidate  must  be  pro- 
posed singly.  If  the  names  of  more  than  one  were  set  down 
in  a  list,  and  the  election  was  made  of  the  whole  list  by  a  sin- 
gle vote,  such  election  is  altogether  void,  although  the  names 
may  have  been  repeatedly  read  over,  and  an  offer  made  to 
strike  out  any  to  which  an  objection  should  be  made,  and  not- 
withstanding the  election  was  by  the  unanimous  consent  of 
the  entire  body.  For,  it  may  be  presumed  that,  instead  of 
using  his  judgment  as  to  the  propriety  of  admitting  an  indi- 
vidual, which  he  would  do  in  case  they  were  separately  pro- 
posed, each  member,  desiring  to  obtain  the  admission  of  some 
one  in  particular,  may  compromise  his  opinion  as  to  the  others, 
and  thus,  persons  may  be  introduced  who  would  otherwise 
have  been  rejected.3  If  a  person  procure  his  election  and  ob- 
tain membership  in  a  mutual  benefit  society  by  false  represen- 
tations and  suppression  of  facts  concerning  his  state  of  health 
at  the  time  of  his  application,  his  admission  to  membership  is 
void,  and  he  may  be  expelled.4  A  by-law  of  an  incorporated 
society  provided  that  the  object  of  a  special  meeting  should  be 
stated  in  the  call.  Another  by-law  provided  that  a  new  mem- 
ber must  be  approved  by  a  vote  of  the  society.  A  warranl 
which  called  a  special  meeting  of  the  society,  contained  no 
article  for  the  admission  of  new  members,  but  contained  the 
article:  "To  transact  any  other  business  that  may  legally 

•The  right  of  a  person,  duly  elected  funds,  the  alleged  fact  that  it  has  a 
thereto,  to  sit  as  a  new  member  of  a  fund  of  $4,000  does  not  give  him  any 
democratic  county  committee,  a  vol-  right  of  admission.  McKane  v.  Ad- 
untary  unincorporated  political  asso-  ams,  4  N.Y.  S.  401;  21  Abb.  N.C.  439; 
ciation,  provided  for  by  the  constitu-  51  Hun  629:  affirmed  123  N.  Y.  G09; 
tion  of  the  democratic  county  organ-  25  N.  East.  Rep.  1057. 
ization,  is  one  which  the  courts  will  'Tyrrell  v.  Washburn,  6  Allen  (88 
not  attempt  to  enforce.     Plaintiff,  not    Mass.)  466. 

having  been  admitted  as  a  member       3  Ang.  &  Ames  on  Corp.,  §  126. 
of  the  committee,  and  therefore  not       4  Morel  v.  Society,  13  Lower  Can. 
having  acquired  any    rights    in   its   Jur.  1. 


72  MEMBERSHIP. 

come  before  said  meeting."  At  this  called  meeting,  several 
persons  were  admitted  to  membership,  and  permitted  to  vote. 
It  was  held  that  the  election  of  such  persons  to  membership 
was  invalid.1 

§  32.  Who  are  members  of  a  mutual  benefit  society. — 
The  members  of  a  society  incorporated  for  the  mutual  protec- 
tion and  relief  of  its  members,  and  for  the  payment  of  stipulated 
sums  of  money  to  the  family  or  heirs  of  deceased  members, 
are  those  mutually  engaged  in  promoting  the  purposes  of  the 
organization,  and  who,  by  virtue  of  their  relation  to  the 
corporation,  are  entitled  to  the  mutual  protection  and  relief 
provided  or  whose  family  or  heirs  are,  in  case  of  death,  en- 
titled to  the  specific  relief  provided  for  them.  The  mem- 
bers of  such  a  corporation  are  the  elective  and  control- 
ling body,  authorized  to  elect  trustees  and  other  proper 
officers,  and  prescribe  regulations  for  the  government  of 
the  same.2  Membership  in  a  mutual  benefit  society  is 
frequently  limited  to  the  members  of  certain  subordinate  or- 
ganizations and  is,  by  the  by-laws,  made  to  depend  upon  the 
continuance  of  membership  in  such  organizations.  When 
such  is  the  case,  a  member  who  ceases  to  be  a  member  of  such 
organization,  also  ceases  to  be  a  member  of  the  mutual  benefit 
society.  The  fact  that,  after  the  withdrawal  of  the  member 
from  such  organization,  the  society  continues  to  carry  his 
name  on  the  roll  of  membership,  to  recognize  him  as  a  mem- 
ber, and  to  levy  and  collect  assessments  from  him,  gives  him 
no  rights  against  the  society.  Such  acts  on  the  part  of  the 
society  do  not  operate  as  an  estoppel,  for  the  by-law  setting 
forth  the  qualification  of  membership  is  as  binding  upon  the 
member  as  upon  the  society,  and,  in  such  a  case,  the  by-law 
declares  that  he  is  no  longer  a  member.3  The  society  and  the 
member  may  agree  upon  some  method  by  which  the  question 
of  his  being  and  remaining  a  member  of  a  certain  organiza- 
tion shall  be  determined  so  as  to  be  binding  upon  both;  but  in 
the  absence  of  any  such  agreement,  it  will  be  presumed  that 
these  questions  are  to  be  decided  by  that  organization.  Where 
such  an  organization  has  an  orderly  system  of  laws  governing 

1  Gray  v.  Society,  137  Mass.  329.  3Burbank  v.  Association,  144  Mass. 

2  State  v.  Association,  38  Ob.  St.  434;  Springmeier  v.  Association,  5 
281.  Cin.  Law  Bull.  516. 


MEMBERSHIP.  73 

the  admission  into  and  expulsion  from  membership,  its  act  de- 
termining the  status  of  a  member  will,  in  the  absence  of  con- 
trary provisions,  be  binding  on  a  mutual  benefit  society,  in 
which  membership  is  contingent  upon  continued  membership 
in  that  organization.  The  custom  of  a  mutual  benefit  society 
to  accept  as  conclusive  a  certificate  of  another  organiza- 
tion stating  that  the  person  named  therein  is  a  member  of 
that  organization,  or  that  he  died  while  a  m^mbsr  thereof, 
clearly  indicates  that  it  is  a  part  of  the  contract  that  the  offi- 
cers or  proper  tribunal  of  the  organization  shall  settle  the 
question  of  membership  in  that  body.1  To  prove  that  a  per- 
son is  a  member  of  a  society,  it  is  competent  to  show  that  his 
name  is  on  its  records,  or  that  he  has  stated  that  he  was  a  mem- 
ber.4 Eeceipts  from  the  society  for  dues  or  assessments,  de- 
mands upon  a  person  for  assessmsnts,  and  including  him  in 
the  list  of  members,  are  facts  tending  to  show  that  he  was  at 
the  time  a  member  in  good  standing.3  But  after  a  member 
has  resigned,  or  been  expelled,  the  mere  fact  that  his  name  is 
carried  on  the  rolls  of  the  society  does  not  continue  his  rela- 
tions with  it.4 

"Where  by-laws  provide  that  a  member  may  at  any  time 
withdraw  from  the  society  by  giving  notice  in  writing  of  his 
intention  to  do  so,  a  notice  of  withdrawal  by  him  severs  his 
connection  with  the  society.  No  assent  or  dissent  on  its  part 
is  necessary.5  In  an  action  on  a  certificate  where  the  question 
of  membership  is  in  issue,  evidence  showing  that  the  deceased 
was  not  a  member  of  the  society  at  his  death  is  admissible. 
though  his  resignation  or  withdrawal  is  not  specially  pleaded.' 

A  by-law  of  a  Masonic  mutual  benefit  society,  passed  in  view 

1  Connelly  v.  Association,  58  Conn.  Turnbull  v.  Payson.  95    IT.    S.  418; 

552;  20  All.  Rep.  671;    but  see  Odd  New  Era  life  v.  Rossiter,  182  Pa.  St. 

Fellows  v.   Hook,  10  Cim  Law  Bui-  814;  19  Atl.  Rep.  140. 

letin,  39!.    See  Pfeiffer  v.  Mt.  Ho-  » Bankere'  Association  v.  Stapp,  77 

reb   Encampment,  13  Daly  161;  Vi-  Texas.  517;  14  S.  W.  Rep.  168;  New 

var  v.  Supreme  Lodge,  52  N.  J.  L.  455:  Era  v.  Rossiter.  supra. 

20  Atl.  Re]>.  86;  Burbank  v.  Associa-  'Rood  v.  Association.  31  Fed.  Rep. 

tion,  144  Mass.  434;  Springmeier  v.  62;   Cramer    v.    Masonic  Life.  '.)  N. 

Association,  5  Cin.    Law    Bull.  516;  Y.  Supp.  356. 

Ellerbe    v.    Faust    (Mo.),   25    S.    W.  5  Cramer  v.   Masonic  Life.  9  N.  Y. 

Rep.  890.  Supp.    856;    Borgraefe    v.    Supreme 

8Do\vs  v.  Naper,  90  111.  44;  Minne-  Lodge,  26  Mo.  App.  218. 

apolis,  etc.,  v.  Libby,  24  Minn.  327;  6 Cramer  v.  Ma  onic  Life,  sujora. 


74 


MEMBERSHIP. 


of  a  by-law  of  the  Masonic  lodges  excluding  saloon  keepers 
from  the  privileges  of  the  lodges,  and  providing  that  any 
member  becoming  a  saloon  keeper  shall  forfeit  his  member- 
ship in  the  society,  applies  to  those  who  are  and  continue,  as 
well  as  to  those  who  become,  saloon  keepers  after  its  passage. ' 

"Where  a  by-law  of  a  society  provides  that  any  member  ex- 
pelled from  the  Masonic  lodge  to  which  he  belongs  shall  forfeit 
his  membership  in  the  society,  such  membership  is  forfeited  by 
his  being  debarred,  against  his  will,  of  the  privileges  of  his 
lodge,  though  not  in  form  expelled  therefrom.2 

Under  laws,  1S83,  Chap.  175,  of  New  York,  providing  for 
the  incorporation  of  co-operative  or  assessment  life  and  casu- 
alty insurance  associations,  and  declaring  each  policy  holder  a 
member  of  the  association,  with  a  voice  in  the  management  of 
its  affairs,  only  adult  persons  were  contemplated  as  entitled  to 
membership,  as  membership  is  founded  on  mutual  contract 
between  the  members.3 


1  Ellerbe  v.  Faust  (Mo.),  25  S.  W. 
Rep.  390. 

2  Ellerbe  v.  Faust,  supra. 

3  In  re  Globe  Mutual  Ben.  Associa- 
tion, 135  N.  Y.  280  ;  32  N.  East.  Rep. 
122;  affirming  17  N.  Y.  Supp.  852. 
In  so  holding,  the  court  said  :  ' '  The 
defendant  was  a  co-operative  asso- 
ciation under  the  act,  a  continuing 
membership  in  which  is  made  de- 
pendent on  the  member  keeping  up 
his  dues.  Each  holder  of  a  certificate 
is.  by  virtue  thereof,  a  member  and 
corporator  in  the  association,  and  so 
remains  until  by  nonpayment  of  dues 
his  membership  is  forfeited.  The 
statute  contemplates  a  meeting  of  the 
associates  in  annual  meeting,  at 
which  reports  of  receipts  and  expend- 
itures are  to  be  submitted,  and  the 
associates,  assembled  at  a  meeting 
duly  notified,  are  to  consider  and  pass 
upon  by-laws  or  amendments  pro- 
posed for  adoption.  It  is  plain  that 
the  powers  conferred  upon  members 
can  not  be  exercised  by  children  of 
tender  years,  such  as  have  been  per- 
mitted to  become  members  of  the 


corporation  defendant.  The  children 
insured  by  the  defendant,  whose  ages 
are  given  in  the  schedule,  were  in- 
capable of  exercising  any  choice  in 
becoming  members,  or  of  appointing 
a  beneficiary,  or  of  exercising  the 
powers  with  which  members  are  in- 
vested by  the  statute.  They  could 
take  no  part  in  the  co-operative 
scheme  upon  which  the  corporation 
rests,  and  which  implies  the  volun- 
tary association  of  persons  capable  of 
acting  in  the  administration  of  the 
affairs  of  the  corporation.  There  is 
nothing  in  the  statute  which  permits 
the  inference  that  a  child  may  be 
made  a  member  of  the  corporation 
upon  the  application  of  the  parent, 
or  that  a  beneficiary  may  be  desig- 
nated or  changed  by  any  person  ex- 
cept the  member  himself.  It  has 
been  held  that  where  a  statute  au- 
thorizes persons  to  form  a  corpora- 
tion, it  is  implied  that  they  shall  be 
persons  of  full  age.  Road  Co.  v. 
Townsend,  13  0nt.  App.  534  ;  16  Am. 
&  Eng.  Corp.  Cas.  645.  Infants  ad- 
mitted as  members  by  the  defendant 


MEMBERSHIP.  75 

§  33.  Membership  in  religious  corporations. — A  right  as 
a  corporator  in  a  religious  society  is  obtained  by  a  stated  at- 
tendance on  divine  worship  and  contributing  to  its  support  by 
renting  a  pew,  or  by  some  other  mode  usual  in  the  congrega- 
tion. Such  a  right  can  not  be  derived  by  descent  from  the 
founders  of  the  society,  or  from  the  former  contributors  to, 
or  worshipers  in  it.  The  association  between  a  religious  in- 
corporation and  its  incorporators  is  voluntary  on  the  part  of 
the  latter,  and  is  dissolved  by  their  withdrawing  from  attend- 
ance on  its  worship,  omitting  to  contribute  to  its  support,  and 
uniting  in  the  establishment  of  another  like  incorporation. 
Aliens  may  be  corporators  and  trustees  in  a  religious  corpora- 
tit  >n.1  Membership  in  a  church,  however,  is  to  be  distinguished 
from  membership  in  a  religious  corporation.  The  church  is  an 
unincorporated  voluntary  society,  having  power  to  adopt  its 
own  rules  for  admission.  It  is  entirely  independent  of  the  re- 
ligious corporation,  and  a  person  may,  by  stated  attendance  at 
public  worship,  and  contributing  to  its  support,  become  a 
member  of  the  religious  corporation,  without  becoming  a 
member  of  the  church,  for  whose  wants  the  corporation  pro- 
vides. This  distinction  between  membership  in  a  religious 
corporation  and  membership  in  a  church  whose  wants  are  sup- 
plied by  the  corporation's  an  important  one,  and  must  be  kept 
m  view  in  determining  the  respective  rights  of  membership. 

•".+.      Expulsion^     amotion,    suspension. — Expulsion  is 
the  act  of  depriving  a  member  of  a  society  of  his  right  of 

became  members  of  the  corporation)  clothed  with  general  legal  capacity, 
it'  legally  entitled  to  admission,  and  anil  while,  in  many  cases,  youths  un- 
may  be  elected  I  rustees  or  directors,  der  twenty-one  years  of  age  arecapa- 
and  it  might  happen  that  manage-  hie  of  exercising  an  intelligent  judg- 
ment of  the  affairs  of  the  corporation  ment  and  might  properly  i>e  admitted 
would  become  vested  Id  persons  who  to  the  advantage  of  membership  in  a 
could  not  have  organized  it.  We  company  like  thai  of  the  defendant, 
place  our  assent  to  the  judgment  be-  in  many  others  they  would  be  w  holly 
low  on  the  ground  that  it  appears  unfitted  to  act  as  members  of  such 
from  a  consideration  of  the  statute  of  an  organization.  We  think  the  order 
1883,  and  the  nature  and  object  of  co-  below  is  right,  and  it  should  be  af- 
operative  insurance  companies,  and  firmed."  But  see  Chicago  Mutual  v. 
the  relation  which  members  hold  to  Hunt,  127 HI.  857;  80  X.  East.  Kep.  55. 
the  corporation,  that  adult  persons  'Cammeyer  v.  United  Church,  8 
only  were  contemplated  as  entitled  Sand.  Ch,  (N.  Y.)  186  ;  People  v. 
to  membership.  The  law  fixes  an  ar-  Tuthill,  31  N.  Y.  550. 
bitrary  period  when  persons  become 


76  MEMBERSHIP. 

membership  therein,  by  the  vote  of  such  society,  for  some  vio- 
lation of  his  duty  as  such,  or  for  some  offense  which  renders 
him  unworthy  longer  to  remain  a  member  of  the  same.  In 
an  incorporated  society  there  is  a  distinction  between  what  is 
called  amotion,  or  the  right  to  remove  an  officer,  which  is  a 
power  inherent  in  every  corporation,  and  disfranchisement. 
The  former  may  be  exercised  without  interfering  with  the 
franchise,  as  the  officer,  when  removed,  still  continues  to  be  a 
member;  but  disfranchisement  is  an  actual  expulsion  of  the 
member  from  the  body,  and  the  taking  away  of  his  franchise. 
This  distinction  is  not  generally  regarded  in  the  books,  and 
the  term  "amotion"  is  frequently  used  as  a  synonym  for  ex- 
pulsion. It  is  well,  however,  in  view  of  the  increasing  impor- 
tance of  the  subject  of  expulsion  from  voluntary  societies,  to 
preserve  and  recognize  the  distinction  as  laid  down.  Suspen- 
sion is  a  temporary  expulsion,  and  the  law  regarding  the  sus- 
pension of  members  from  their  privileges  is  in  all  respects  the 
same  as  the  law  governing  their  expulsion  from  membership, 
While  this  is  true,  there  is  still  a  well  defined  distinction  be- 
tween suspension  and  expulsion.  Expulsios  severs  the  connec- 
tion between  the  expelled  member  and  the  society,but  suspen- 
sion from  membership,  being  the  temporary  privation  of  rights 
and  benefits,  does  not  otherwise  affect  the  relation  of  the  parties. 
The  suspended  member  becomes  entitled  to  his  privileges  by 
lapse  of  time,  or  by  some  act  on  his  part,  as  the  payment  of  dues, 
assessments  or  fines,  etc.;  but  the  expelled  member  may  be  re- 
admitted only  on  the  terms  and  conditions  of  a  new  member. 
It  is  evident,  therefore,  that  a  member's  duty  to  the  society, 
in  the  absence  of  contrary  provisions  in  the  contract  of  mem- 
bership, remains  undiminished  during  the  time  of  his  suspen- 
sion. He  must,  during  all  of  such  time,  perform  all  the  duties 
required  of  other  members,  and  he  is  liable  for  all  dues  and 
assessments  levied  under  the  by-laws.  The  deprivation  of  all 
privileges  and  benefits  by  suspension  does  not  determine  the 
liability  of  a  member  for  such  clues  and  assessments  by  remov- 
ing the  consideration  necessary  to  support  the  contract  to  pay 
them.  The  consideration  of  any  undertaking  to  pay  them  is 
his  admission  into  the  society  as  a  member.  While  cer- 
tain privileges  and  benefits  are  incident  to  membership,  there 
are    also  certain   conditions   upon    which  the   enjoyment  of 


MEMBERSHIP.  77 

them  is  made  to  depend.  The  suspended  member  is,  then, 
subject  to  the  duties  of  membership,  even  while  debarred 
from  the  enjoyment  of  its  rights  and  benefits.1  It  is  some- 
times argued  that  the  power  to  expel  a  member  implies 
the  power  to  suspend  him,  on  the  principle  that  the  greater 
includes  the  less.  But  the  power  to  expel  can  not  justly 
be  held  to  include  the  power  to  suspend,  for  the  suspen- 
sion of  a  member  might  work  great  injustice,  by  depriv- 
ing him  of  the  benefits  of  membership,  while  leaving  him 
subject  to  the  payment  of  dues  and  assessments.  Such  a 
punishment  should  only  be  inflicted  when  it  is  provided  for  in 
the  contract  of  membership,  for  the  quasi-judicial  powers  of 
societies  should  be  exercised  in  exact  conformity  with  such 
contract.2  The  right  to  fine  or  expel,  given  in  a  contract  of 
membership,  does  not  include  the  right  to  suspend. 

§  35.  Power  of  amotion  in  an  incorporated  society. — 
Incorporated  societies  have  inherent  power  to  expel  members 
in  certain  cases,  and  it  follows  that  they  have  power  to  amove 
an  officer  of  the  society  from  the  station  to  which  he  has  been 
assigned,  before  the  expiration  of  his  term  of  office,  when  the 
interest  and  good  government  of  the  society  require  it.  It  is 
well  settled  that  the  inherent  power  of  amotion  may  be  exer- 
cised for  three  causes :  First,  such  as  have  no  immediate  rela- 
tion to  the  office,  but  are  in  themselves  of  so  infamous  a  nature 
as  to  render  the  offender  unfit  to  execute  any  public  franchise. 
St  conMy,  such  as  are  only  against  his  oath  and  the  duty  of 
his  office  as  a  corporator,  and  amount  to  breaches  of  the  tacit 
condition  annexed  to  his  office.  Tkirdly^svLoh  as  are  of  a  mixed 
nature,  as  being  not  only  against  the  duty  of  his  office,  but 
also  indictable  under  the  law.  Before  he  can  be  amoved  for 
the  first  offense  above  specified,  he  must  have  been  convicted 
in  the  courts  of  the  land.  But  if  he  lias  Bed  the  country  before 
conviction,  he  may  be  removed  as  if  convicted.  In  case  of  a 
mere  ministerial  officer  appointed  to  bold  office  during  the 
pleasure  of  the  appointing  power,  he  may  be  removed  al  the 
mere  pleasure  of  those  appointing  him,  without  notice  or 
charges;  and  the  appointment  of  a  new  officer  to  serve  in  bis 
stead  is  a  sufficient  amotion  of  such  an  officer.     But  notice, 

'Palmetto  Lodge    v.    Hubbell,   24       'Schasslii-rgcr      v.      Staendel,      9 
S.  C.  (2  Strob.)  457.  W< n si  ly  Not< a  of  Cases,  379. 


78  MEMBERSHIP. 

and  an  opportunity  to  be  heard,  are  necessary  where  the 
appointment  is  during  good  behavior,  or  for  a  specified  time, 
or  where  charges  are  preferred  against  the  officer.  Mere  acts, 
which  are  a  cause  for  amotion,  do  not  create  a  vacancy  until 
the  amotion  actually  takes  place.  Where  the  organic  law  of 
a  society  and  its  by-laws  are  silent  as  to  the  mode  of  proceed- 
ing in  amoving  an  officer,  reference  must  be  had  to  the  nature 
of  the  case  to  determine  what  course  justice  requires  the 
removing  power  to  pursue  in  exercising  its  jurisdiction. 
Where  the  statute  under  which  the  society  is  organized  pro- 
vides a  cause  for  which  an  officer  may  be  removed,  it  is  not 
necessary  that  the  cause  assigned  for  removal  should  be  stated 
in  the  precise  language  of  the  statute.  If  the  charge  sub- 
stantially embraces  the  cause  as  set  forth,  it  is  sufficient.1 
The  power  of,  and  proceedings  in  amotion  rest  upon  the  same 
principles  as  in  expulsion  and  will  not  be  separately  treated  of 
at  length. 

§36.  Power  of  incorporated  societies  to  expel  members. — 
A  member  of  a  corporation,  whether  it  be  municipal,  eleemosy- 
nary or  private,  is  in  the  enjoyment  of  a  franchise,  the  right 
to  which  is  not  derived  from  the  body,  but  is  created  by  stat- 
ute, or  exists  by  prescription,  and,  therefore,  can  not  be  taken 
away  by  the  act  of  the  corporation,  except  in  certain  extreme 
cases.  As  membership  is  a  right  conferred  by  statute,  or 
derived  from  immemorial  custom  which  implies  the  existence  of 
a  grant,  it  can  neither  be  taken  away  by  act  of  the  corporation, 
nor  withheld  by  the  act  of  the  corporation,  from  any  one  eligi- 
ble to  the  enjoyment  of  it.2  Where  corporations  are  for 
business  purposes,  are  founded  upon  private  capital,  and  own 
property,  the  modern  cases  are  very  unanimous  in  holding  that 
no  stockholder  may  be  disfranchised,  and  thereby  be  deprived 
of  his  interest  in  the  property  of  the  corporation,  without  an 
express  authority  for  the  purpose  in  the  charter.  There  is  a 
power  of  expulsion  inherent  in  every  incorporated  voluntary 
society.  But,  as  held  by  Lord  Mansfield  in  the  case  of  Eex  v. 
The  Mayor  of  Liverpool,3  and  as  has  been  held  in  a  long  line 
of  subsequent  cases,  both  in  this  country  and  in  England,  this 

1  Peoples  v.  Higgins,  15  111.  110.         (N.  S.)(N.Y.)  162  :  People  v.  Medical 

2  Gay  v.  Farmers'  Mutual,  51  Mich.    Society,  32  N. Y.  187. 
245  ;  White  v.  Brownell,  4  Abb.  Pr.        32  Burr.  723. 


MEMBERSHIP. 


79 


power  is  limited  to  three  causes :  First,  offenses  as  a  citizen 
against  the  laws  of  the  land;  when  an  offense  has  been  com- 
mitted, which  has  no  immediate  relation  to  a  member's  cor- 
porate duty,  but  is  of  so  infamous  a  nature  as  to  render  him 
unfit  for  the  society  of  honest  men.  Such  are  the  offenses  of 
perjury,  forgery,  etc.  But  before  an  expulsion  is  made  for  a 
cause  of  this  kind,  it  is  necessary  that  the  member  shall  have 
been  convicted  of  the  offense  by  a  court  or  jury,  according  to 
the  law  of  the  land.  Second,  violation  of  duty  to  the  society, 
as  a  member  and  incorporator  thereof,  such  as  the  obliteration 
or  alteration  of  its  records,  or  acts  tending  to  impair  or  de- 
st  n  >y  its  title  to  its  property,  rights  or  privileges.  In  this  case 
he  may  be  expelled  on  trial  and  conviction  by  the  corporation. 
Third,  breach  of  duty  in  respect  alike  to  the  corporation  and 
the  laws.  This  is  an  offense  of  a  mixed  nature,  against  the 
member's  duty  as  a  corporator,  and  also  indictable  by  the  law 
of  the  land.  In  these  cases  the  expulsion  of  the  member  is 
but  the  exercise  of  a  power  incident  to  the  right  of  self-pres- 
servation.  It  has  been  laid  down  as  a  rule  that  offenses  against 
corporate  duty  consist  of  "  things  done  that  work  to  the  de- 
struction of  the  body  corporate,  or  to  the  destruction  of  the 
liberties  and  privileges  thereof."1  As  observed  in  one  case,5 
this  rule  may  be  somewhat  too  restricted  in  some  special  cases, 
but  it  is  the  general  and  leading  rule,  and  is  rarely  departed 
from.  If  the  member  does  acts  which  are  calculated  to  de- 
stroy  the  corporation,  or  its  liberties  and  privileges,  he  may 
be  disfranchised.  He  thus  forfeits  his  right  to  membership. 
It  is  very  clear  that  the  character  of  the  act  considered  as  an 
offense  against  the  corporation,  depends  materially  upon  the 
nature  and  purpose  of  the  corporation  itself .  The  duties  of 
membership  should  be  liberally  construed  with  reference  t<> 
the  objects  for  which  the  society  was  incorporated.  Such 
duties,  according  to  Lord  Mansfield,  are  tacit  conditions 
annexed  to  the  franchise  of  a  member.  Whether  an  act  is  a 
breach  of  corporate  duty,  or  not,  should  be  judged  entirely  by 
its  effect  on  the  objects  of  the  society.  "Where  a  member  per- 
forms an  act  in  direct  contravention  of  the  purposes  [or  which 
the  charter  was  obtained,  he  may  be  expelled.     The  authority 

1  Ang.    &    Ames    on   Corp.  349;   2       '2  People  v.  Medical  Society,  24  Barb. 
Kent's  Com.  297.  (N.  Y.)5T1. 


80  MEMBERSHIP. 

of  an  incorporated  society  to  expel  its  members  is  a  matter 
demanding  the  serious  and  careful  consideration  of  the  courts 
in  each  particular  case.  While  the  individual  rights  of  those 
who  are  members  should  be  carefully  guarded  and  protected, 
and  the  courts  should  see  that  the  powers  conferred  are  not 
exceeded  and  abused,  they  should,  at  the  same  time,  sustain 
any  legitimate  and  proper  action  which  may  have  been  taken 
by  the  society,  within  the  scope  of  its  charter,  to  maintain 
and  uphold  the  objects  of  its  creation.  Societies,  clubs  and 
voluntary  associations  of  all  kinds  are  increasing  with  great 
rapidity  in  this  county,  and  the  power  of  expulsion  is  natu- 
rally developing  in  its  application  to  these  widely  different 
organizations.  It  seems  to  have  been  the  policy  of  courts  for 
many  years  to  restrict  the  jurisdiction  of  societies  over  the 
rights  of  their  members,  but  courts  are  now  inclined  to  sustain 
the  action  of  societies  in  expelling  members  for  causes  which 
tend  to  militate  against  their  good  government  under  their 
charters.  Societies  may  set  forth  in  their  by-laws  the  offenses 
for  which  they  will  exercise  this  inherent  power  of  expulsion, 
and  if  these  offenses  fall  reasonably  within  the  rule  laid  down 
in  the  preceding  paragraph,  the  courts  will  hold  the  by-laws 
to  be  reasonable,  valid  and  binding. 

§  37.  Development  of  the  doctrine  of  the  inherent  power 
to  expel — Modern  doctrine. — The  rules  just  laid  down  con- 
stitute the  modern  doctrine  on  the  power  of  expulsion  of 
members  from  incorporated  voluntary  societies.  A  com- 
parison of  the  modern  rule  with  the  early  English  cases  Avill 
show  the  growth  and  development  of  this  power  under  the 
liberal  application  of  sound  principles.  The  famous  case  of 
James  Bagg  was  reported  by  Lord  Coke.1  In  Bagg's  Case  it 
was  held  by  the  court  of  King's  Bench  that  the  power  of 
expulsion,  being  judicial  in  its  nature,  must  be  exercised  by  the 
courts  of  the  land  in  all  cases,  except  where  authority  to  expel 
its  members  was  expressly  conferred  upon  the  society  by  its 
charter,  or  was  derived  by  prescription,  and  that  where  no 
such  express  authority  existed,  there  must  be  a  conviction  of 
some  offense  in  a  court  of  law  before  the  offending  member 
might  be  disfranchised.  But  in  applying  this  rule,  it  was 
found  to  be  too  narrow  and  restricted  to  enable  corporations 

1  11  Rep.  93. 


MEMBERSHIP.  81 

properly  to  govern,  their  internal  matters  of  discipline,  and  to 
attain  the  objects  for  which  they  were  created,  and  afterward. 
Lord  Mansfield  held  the  doctrine  to  be  as  has  been  stated.1 
While  the  more  modern  cases  have  added  no  new  causes  for 
which  the  inherent  power  of  expulsion  may  be  exercised,  the 
tendency  is  to  hold  the  member  to  a  rigid  observance  of  his 
duty  as  a  corporator,  and  to  look  with  more  favor  upon  the 
charge  against  a  member,  of  breach  of  corporate  duty. 

§  38.  Power  of  expulsion  conferred  by  the  charter. — The 
power  of  expulsion  for  the  three  causes  above  specified  being 
inherent  in  an  incorporated  society,  any  express  power  of  ex- 
pulsion for  certain  defined  causes,  conferred  upon  a  society  by 
its  charter,  is  to  be  regarded  as  cumulative.  A  society  may 
not  expel  members  for  minor  offenses  without  an  express  pro- 
vision of  its  charter  conferring  upon  it  that  right ;  and  a  gen- 
eral provision  that  the  society  shall  have  power  to  expel  its 
members,  confers  upon  it  no  greater  power  than  it  inherently 
possesses.  While  a  general  provision  in  the  charter,  that  the 
society  shall  have  power  to  expel  its  members,  in  fact  confers 
upon  it  no  other  or  greater  power  than  is  inherent  in  it,  the 
courts,  in  some  cases,  seem  to  be  inclined  to  give  a  broader 
and  more  liberal  construction  to  its  powers  when  they  are  thus 
recognized  in  the  charter.  Where  the  charter  confers  upon  a 
society  the  right  to  expel  its  members,  under  such  rules  and 
regulations  as  it  shall  adopt,  this  power  may  not  be  used  in  an 
arbitrary  and  unjust  manner,  and  without  regard  to  the  objects 
and  necessities  of  the  societ}7-.  When  a  person  becomes  a  mem- 
ber of  an  incorporated  voluntary  society,  he  does  so  with  ref- 
erence to  the  main  objects  of  its  existence,  as  pointed  out  in 
the  charter.  When  an  offense  is  totally  unconnected  with  the 
affairs  and  objects  of  the  society,  disfranchisement  can  not 
be  necessary  for  the  good  government  of  the  corporation. 
The  authority  is  conferred  for  the  purpose  of  enabling  the 
incorporated  society  to  accomplish  the  objects  of  its  cre- 
ation, and  the  power,  in  its  exercise,  is  to  be  limited  to 
such  objects  and  purposes.  But  corporations  inherently 
have  the  power  of  self-protection,  and  the  right  to  do 
those  things  which  are  necessary  to  accomplish  the  objects 
of    its   existence,   and,   hence,   it    will    be    seen    that    these 

1  Rex  v.  Richardson,  1  Burr.  517. 
6 


S2  MEMBERSHIP. 

general  powers  of  expulsion,  which  are  conferred  upon 
societies,  in  reality  add  nothing  to  their  inherent  powers. 
Courts,  in  their  desire  to  give  to  societies  a  sound  discretion 
in  determining  what  constitutes  a  breach  of  a  member's  duty 
as  a  corporator,  have  sometimes  referred  to  the  fact  that,  in 
the  case  at  bar,  the  power  of  expulsion  was  conferred  by  the 
charter ;  but  while  this  tendency  to  be  liberal  in  denning  the 
offenses  which  fall  within  the  breach  of  a  member's  corporate 
duty  is  in  the  right  direction,  it  can  not  rightly  be  placed  upon 
the  ground  that  the  power  of  expulsion  has  been  extended  by 
any  general  recognition  in  the  charter.  It  may  be  confidently 
stated  that  there  is  no  instance  in  which  the  expulsion  of  a 
member,  under  the  general  power  conferred  by  charter,  has 
been  sustained,  where  the  offense  did  not,  with  a  reasonable 
and  liberal  construction,  come  within  the  second  cause  for  ex- 
pulsion as  above  set  forth,  viz.,  a  breach  of  the  member's  duty 
to  the  society.  In  Pennsylvania,  where  the  approval  of  the 
supreme  court  of  the  state  to  the  provisions  of  the  charter  is 
required  before  a  society  can  become  incorporated,  it  has  been 
held  that  the  court  will  not  approve  a  charter  for  the  incor- 
poration of  a  society  where  the  articles  of  incorporation  con- 
tain an  indefinite  statement  of  the  offenses  for  which  a  mem- 
ber may  be  expelled.  The  court  refused  to  approve  a  charter 
which  provided  that  "  an3r  member  may  be  expelled,  who 
commits  any  misdemeanor,  or  any  other  act  which  may  prove 
injurious  to  his  character  or  standing." '  It  refused  to  approve 
one  which  gave  to  the  majority  of  the  members  the  power  to 
expel  any  member  "  guilty  of  any  offense  against  the  law,"  2 
and  one  which  gave  to  the  society  power  to  expel  any  member 
who  should  be  "guilty  of  actions  which  may  injure  the  as- 
sociation." 3  In  one  case  it  was  held  that  a  charter  should  not 
be  approved  which  provided  that  membership  in  the  society 
should  be  forfeited  by  enlistment  in  the  army  or  navy.  The 
court  said :  "  It  is  against  public  policy.  A  corporation  which 
is  a  creature  of  the  law  ought  not  to  proscribe  its  members  for 
aiding  the  government  which  creates  and  protects  it."  4     But 

1  Butchers' Beneficial  Association,  3 Butchers'   Beneficial  Association, 
38  Pa.  St.  293.  35  Pa.  St.  151. 

2  Beneficial    Association  of  Broth-  *Inre  Society,  10  Phila.  Repts.  19. 
erly  Unity,  38  Pa.  St.  299. 


MEMBERSHIP.  83 

it  has  been  held  that  a  by-law  of  an  incorporated  benefit  so- 
ciety, providing  that  any  member  who  shall  enlist  as  a  soldier, 
or  enter  on  board  any  vessel  as  a  seaman  or  mariner,  slut  11 
thenceforth  lose  his  membership,  is  valid  and  reasonable,  in 
view  of  the  purposes  of  the  organization,  and  "  is  not  forbid- 
den by  any  principle  of  public  policy." ' 

§  39.  Breaches  of  corporate  duty. — Where  one  of  the  ob- 
jects of  an  incorporated  society  is  to  provide  assistance  and 
sick  benefits  for  sick  members,  it  is  subversive  of  the  funda- 
mental objects  of  the  society, — an  act  which  tends  to  its  de- 
struction,— for  a  member  to  feign  sickness,  and  draw  money 
from  the  benefit  fund  on  account  of  such  feigned  sickness,  and 
the  society  has  power  to  expel  a  member  for  such  an  offense.2 
Where  the  main  object  of  an  incorporated  mutual  benefit  so- 
ciety is  to  furnish  life  indemnity,  or  pecuniary  benefits  to 
widows,  orphans  and  heirs  of  deceased  members,  indemnity 
for  accidents,  sickness  or  permanent  disability  to  members 
thereof,  the  non-payment  of  dues  and  assessments  is  subversive 
of  the  fundamental  object  of  the  society,  tends  to  its  destruc- 
tion, and  is  a  violation  of  the  member's  duty  as  a  corporator. 
Not  only  has  such  a  society  an  inherent  right  to  expel  mem- 
bers for  non-payment  of  dues  and  assessments,  but,  from  its 
nature  and  necessities,  it  has  a  right  to  provide  in  its  laws, 
that  such  non-payment,  within  a  stipulated  time  after  notice, 
shall,  without  personal  or  other  notice  to  the  delinquent  mem- 
ber, ipso  facto,  work  a  forfeiture  of  all  the  members  rights  of 
membership.'  AVhere  an  officer  or  a  member  of  an  incorpo- 
rated society,  in  account  with  the  society,  charges  it  with 
money  which  he  has  never  paid  out  and  disbursed,  and  seeks 
to  obtain  credit  from  the  society  for  such  fraudulent  items,  he 
is  guilty  of  an  offense  against  his  duty  as  a  corporator, and 
may  be  expelled.4  Though  a  person  who  is  not  a  member  of 
an  incorporated  mutual  benefit  society  owes  to  it  no  corporate 
duty,  yet  a  person  who  applies  for  membership  and  insurance 
therein  is  required  to  act  in  the  utmost  good  faith.      If  he 

'Franklin  v.    Commonwealth,    10  Lewin,  29  Hun  (N.  V.)   87;   Benevo- 

Barr  (Pa.)  359.  lent  Society  v.  Baldwin,  86   111.  479  ; 

'Society  v.  Meyer,  52  Pa.  St.  125;  Equitable  v.  McLennon,  6  Ins.  L.  J. 

Schweiger  v.  Society,  13  Phila.  113.  124. 

3Rood  v.   Benefit -Association,   81  4King  v.  Mayor,  2  Ld.  Raym.  1566; 

Fed.  Rep.   62  ;    McDonald    v.    Ross-  King  v.  Chalke,  1  Ld.  Raym.  226. 


84  MEMBERSHIP. 

procure  admission  to  membership  on  the  false  representation 
that  he  is  in  good  health,  and  by  suppression  of  the  fact  that 
he  has  an  hereditary  or  incurable  sickness,  he  commits  an 
offense  against  his  corporate  duty  by  the  acceptance  of  mem- 
bership and  of  the  contract  of  insurance  so  procured  by  fraud, 
and  may  be  expelled.1  When  in  his  application  for  member- 
ship in  such  a  body  he  knowingly  misrepresents  his  age  as  less 
than  it  really  is,  he  may  be  expelled.2  Where  the  charter  of 
an  association  stated  that  it  was  formed,  among  other  things, 
"to  inculcate  just  and  equitable  principles  in  trade,"  it  was 
held  that  a  member  might  be  expelled  for  obtaining  goods 
under  false  pretenses,  though  the  offense  was  not  committed 
within  the  local  jurisdiction  of  the  corporation,  nor  against  a 
member  of  the  association.  The  court  said :  "  When  a  person 
became  a  member,  and  subscribed  to  the  articles  of  the  asso- 
ciation, he  agreed  as  a  condition  of  his  being  associated  with 
the  company  that  he  would,  by  his  example  and  his  practice, 
aid  in  this  great  object  and  leading  purpose  of  the  corporation. 
This  could  most  effectually  be  accomplished  by  a  practice  of 
integrity,  honesty  and  fairness  in  commercial  dealings,  both  in 
reference  to  the  acts  of  the  association  and  its  members,  at  its 
place  of  business  and  elsewhere,  at  all  times  and  on  all  occa- 
sions when  engaged  in  trade.  *  *  He  had  no  right  to  make 
a  distinction  between  dealing  with  members  and  strangers."  3 
Where  a  medical  society,  both  by  its  charter  and  by-laws, 
has  jurisdiction  to  inquire  into  and  pass  judgment  upon  the 
conduct  of  its  members,  and,  in  a  proper  case,  to  expel  a  mem- 
ber, gross  immorality  in  a  professional  transaction,  having  a 
tendency  to  bring  the  profession  into  dishonor  before  the  com- 
munity, if  distinctly  charged  and  proved,  is  sufficient  to  justify 
the  exercise  of  its  power.  And  where  a  member  of  such  a  so- 
ciety sold  out  his  practice  and  good  will  to  another  physician, 
and  agreed  not  to  practice  medicine  in  the  community,  but 
soon  afterward  began  to  practice  in  the  community,  in 
violation  of  his  agreement,  and  the  society  expelled  him 
therefor,  the  court  refused  to   restore   him   to   membership.1 

1  Morel  v.  LaSociete,  1  Lower  Can.  Abb.  Pr.  271;  Dickenson  v.  Cbamber 
Jurist,  1.  of  Commerce,  29  Wis.  45. 

2  Vivar  v.  Supreme  Lodge,  52  N.  J.  4  Barrows  v,  Mass.  Medical  Soc,  12 
L.  455  ;  20  Atl.  Rep.  36.  Cush.  402. 

3  People  v.  N.  Y.  Com.  Ass'n,   18 


MEMBERSHIP.  85 

A  medical  society,  having  power  by  charter  to  expel  its 
members,  passed  a  by-law  providing  that  no  homeopathic 
physician  should  be  admitted  as  a  member,  and  passed  another 
by-law  providing  that  any  member  might  be  expelled  for  any 
conduct  unbecoming  and  unworthy  an  honorable  physician 
and  member  of  the  society.  Under  this  last  by-law,  a  member 
was  charged  with  practicing  medicine  according  to  home- 
opathy, and  the  court  held  the  charge  sufficient  under  the 
powers  and  objects  of  the  society.1  A  member  of  a  society, 
in  resisting  the  unlawful  authority  of  the  society,  commits  no 
offense  against  his  duty  as  a  member.2  Where  the  charter  of 
a  chamber  of  commerce  conferred  upon  the  association  the 
power  to  expel  members  as  it  should  see  fit.  the  court  held 
that  the  association  had  no  power  to  expel  a  member  because 
he  refused  to  submit  to  the  arbitrament  of  the  association, 
according  to  the  by-laws,  a  claim  against- a  fellow  member. 
The  court  said :  "  Is  it  necessary  -for  the  good  government 
and  management  of  the  affairs  of  the  corporation,  that  it 
should  have  power  to  compel  him  to  do  any  such  act '{  We 
can  not  see  that  it  is.  On  the  contrary,  the  assumption  and 
exercise  of  the  power  in  this  case  strikes  us  very  unfavor- 
ably." 3  A  board  of  trade  or  chamber  of  commerce,  the 
object  of  which,  as  expressed  by  its  charter,  is  to  inculcate  just 
principles  in  trade,  may  expel  a  member  for  gross  violation  of 
a  contract  entered  into  by  him,  even  though  the  contract  be 
between  the  member  and  one  who  is  not  a  member,  and 
even  though  the  contract  may  be  void  by  the  Statute  of 
Frauds/  The  charter  of  the  Board  of  Trade  of  Chi- 
cago provides  that  "  said  corporation  shall  have  the  right 
to  admit  or  expel  such  persons  as  they  may  see  fit,  in 
the  manner  to  be  prescribed  by  the  rules,  regulations,  or 
by-laws  thereof."  Under  that  power  the  corporation  adopted 
a  by-law  providing  that  if  a  member  fails  to  comply  with 

1  Gregg  v.  Mass.  Medical  Society,  4  Dickenson  v.  Chamber  of  Coin- 
Ill  Mass.  185.  merce,  29  Wis.  45;   Blumenthal  v. 

'Leech  v.  Harris,  2  Brewster  (Pa.)  Cincinnati  Chamber  of  Commerce,  7 

571.  Cin.   Law  Bui.  327;  People  \.  N.  Y. 

3  State  ex  rel.   v.  Chamber  of  Com-  Commercial  Association,  18  Abb.  Pr. 

merce,  20  Wis.  63  ;  see  State  v.  Mer-  271. 
chants   Exchange,   2  Mo.    App.   96; 
Sweeney  v.  Beneficial  Society,  14  W, 
N.  C.  460-186. 


86  MEMBERSHIP. 

a  business  contract  made  with  another  member,  upon  satis- 
factory evidence  of  such  fact,  he  shall  be  expelled.  The 
court  held  that,  although  the  discretion  granted  by  the 
charter  to  expel  members  is  not  purely  arbitrary,  and  can  be 
exercised  only  for  some  just  and  reasonable  cause,  yet,  as  this 
rule  was  germane  to  the  purposes  for  which  the  corporation  was 
created,  a  member  might  be  expelled  for  non-compliance  with 
such  a  contract.1  A  member  having  been  expelled  from  the 
common  council  of  the  city  of  Liverpool  applied  to  the 
Kind's  Bench  for  a  mandamus  to  restore  him.  The  return  of 
the  mayor  showed,  as  cause  for  expulsion,  that  the  member 
had  become  a  bankrupt.  The  court  held  that  the  cause  was 
insufficient,  as  bankruptcy  was  no  ground  for  disfranchising 
a  member  of  a  municipal  common  council. 2  A  member  had 
vilified  a  fellow  member,  in  violation  of  a  by-law,  and  had 
been  expelled  therefor.  The  society  was  created  for  the  pur- 
pose of  aiding  its  members  when  in  need,  and  of  relieving  dis- 
tressed Irishmen  emigrating  to  the  United  States.  The  ex- 
pelled member  applied  to  the  court  to  be  reinstated  to  the 
privileges  of  membership.  The  court  said  :  "  My  opinion  will 
be  founded  on  the  great  and  single  point  on  which  the  case 
turns.  Is  this  by-law  necessary  for  the  good  government  and 
support  of  the  affairs  of  the  corporation  ?  I  can  not  think 
that  it  is.  *  *  On  mature  reflection  it  appears  to  me 
that,  without  an  express  power  in  the  charter,  no  man  can  be 
disfranchised  unless  he  has  been  guilty  of  some  offense 
which  either  affects  the  interests  or  good  government  of  the 
corporation,  or  is  indictable  by  the  law  of  the  land." s  In 
Earl's  Case,  Carthew,  173,  it  was  held  that  a  member  of  a  cor- 
poration may  not  be  disfranchised  for  any  personal  offense 
of  one  member  to  another.  Two  members  of  an  incorpo- 
rated club  were  sitting  together  in  conversation  in  the  bar- 
room of  the  club-house,  when  a  third  member  came  in 
and  used  insulting  language  which  was  understood  by  one 
of  the  two  to  be  applied  to  himself.  He  thereupon  struck 
the  offender,   and    was    afterward   expelled  for   the  offense. 

'People  v.Chicago  Board  of  Trade,  3  Commonwealth   v.  St.  Patrick's 

45  111.  112.  Benevolent  Society,  2  Binney  (Pa.) 

2  Rex  v.  The  Mayor  of  Liverpool,  2  448. 
Burr.  732. 


MEMBERSHIP.  87 

The  court  held  that  the  act  of  striking  his  fellow  mem- 
ber was  not  such  as  would  justify  his  expulsion  from  the 
club  by  the  members  thereof, — that  mere  offenses  against 
decorum,  personal  offenses  of  one  member  against  another,  so 
long  as  they  do  not  tend  to  the  subversion  of  the  government  of 
the  corporation  and  the  management  of  its  affairs,  do  not 
justify  disfranchisement  on  the  ground  of  being  against  the 
duty  of  the  corporator.1  The  libel  of  one  member  by  another 
is  no  ground  of  expulsion.2  Where  a  society  is  incorporated 
under  a  general  law  providing  for  the  incorporation  of  benefit 
societies,  its  object  is  obviously  civil  and  benevolent,  and  not 
religious,  and  it  may  not  be  made,  directly  at  least,  the  pro- 
moter of  religious  discipline.  While  it  can  refuse  admittance 
to  persons  who  do  not  believe  in  certain  religious  doctrines,  by 
rejecting  their  applications,  yet  it  may  not  compel  a  person 
who  has  once  been  admitted  to  membership,  to  continue  in 
that  faith,  and  to  continue  to  observe  the  discipline  of  any 
church,  on  pain  of  expulsion  from  the  society.  Such  religious 
faith  and  discipline  are  totally  unconnected  with  the  objects  of 
benevolent  societies.  The  law  permits  religious  societies  to 
establish  rules,  regulations  or  articles  of  faith  for  the  govern- 
ment of  their  own  bodies,  and  he  who  becomes  a  member  of 
such  a  religious  society  agrees  to  these  rules,  regulations  and 
articles  of  faith,  and  to  the  mode  of  discipline  and  trial  pro- 
vided by  it.  But  where  a  society  is  organized  and  incorpo- 
rated for  beneficial  and  benevolent  purposes,  under  the  statute 
ot'  the  state,  a  member  may  not  be  deprived  of  his  rights  in 
the  society  by  a  by-law  not  necessary  for,  or  connected  with 
the  purposes  and  objects  of  the  society,  and  relating  to  relig- 
ious discipline,  even  though  he  may  have  assented  to  it.  In 
such  a  society,  a  by-law  providing  for  the  expulsion  of  any  mem- 
ber who  shall  not  twice  during  each  year  attend  to  his  duty  of 
private  confession  and  reception  of  the  Holy  Communion,  is 
vltra  /•//v.vaiid  void.3  In  one  case  the  court  held  that  a  society 
chartered  merely  Eor  the  promotion  of  medical  science  had  no 
right  to  decide  what  fees  its  members  should  charge  for  their 

'Evans  v.    Philadelphia  Club,   50       3  People  v.    Society,    24   How.   Pr. 
Pa.  St.  107.  (N.  Y.)    210;     People    v.    Society,   41 

8AUunt  v.  High   Court,  62  Mich.    Mich.  67. 
110:  28  N.W.  Rep,  802;  Mulroy  v.  Su- 
preme Lodge,  28  Mo.  App.  403. 


88  MEMBERSHIP. 

professional  services,  and  to  expel  a  member  who  had  disre- 
garded such  a  regulation.  The  court  said :  "  Can  it  be  said  with 
any  plausibility  that  the  establishment  of  a  tariff  of  prices  for 
medical  services  was  a  legitimate  object  of  the  creation  of  the 
corporation,  or  that  it  was  necessary,  or  in  any  degree  contrib- 
uted to  the  accomplishment  of  the  purposes  or  objects  for  which 
the  law  authorized  the  corporation  ? " '  A  member  of  a  society, 
the  charter  and  by-laws  of  which  contain  no  definition  of 
offenses  against  the  society,  or  provisions  for  imposing  penal- 
ties, may  not  be  expelled  or  suspended  for  non-payment  of  a 
fine  imposed  by  the  society.2 

An  incorporated  voluntary  society  has  a  right  to  provide  in  it  s 
by-laws  for  the  levying  of  reasonable  fines  for  breaches  of 
duty  to  the  corporation,  and  the  nonpayment  of  any  fine 
which  may  be  imposed  under  the  by-laws  may  be  made  the 
ground  of  dismissal  and  expulsion.3  Where  the  laws  of  a  so- 
ciety do  not  make  such  an  offense  a  specific  cause  for  expul- 
sion, "  being  drunk  while  drawing  benefits  "  from  the  society 
is  not  a  sufficient  ground  for  the  expulsion  of  a  member, 
where  it  is  not  claimed  that  he  was  feigning  illness  at  the  time 
he  became  intoxicated.4 

§  40.  Expulsion  from  religious  corporations. — From  the 
principles  and  authorities  above  set  forth,  it  is  evident  that  a 
corporation,  the  object  of  which  is  merely  to  hold  the  title  to 
property,  can  neither  admit  nor  expel  members.  As  voluntary 
societies  frequently  make  use  of  corporations  to  hold  their 
property,  while  they  themselves  perform  acts  entirely  inde- 
pendent of  such  corporations,  it  is  necessary  that  the  distinc- 
tion between  those  acts  which  are  corporate,  and  those  which 
are  merely  the  acts  of  these  societies,  should  be  thoroughly 
understood  and  constantly  kept  in  view.  In  most  of  the 
states,  the  laws  provide  for  the  incorporation  of  religious  so- 
cieties. There  is,  of  course,  great  difference  between  the  pro- 
visions of  these  laws,  but  they  are,  in  the  main,  drawn  upon 
the  same  general  plan.  Persons  desiring  to  form  themselves 
into  a  religious  society  may  sign  articles  of  association  for  that 

'People  v.  Medical  Society ,  24  Barb.  3  State  v.  Association,  43  La.  Ann. 

(N.Y.)  571.  1098;  10  So.  Rep.  169. 

2Erd  v.  Association,  67  Mich.  233;  4 Commonwealth  v.  Association,  1 

34  N.W.  Rep.  555;  Otto  v.  Union,  75  Mont.  Co.  L.Rep.  (Pa.)  101. 
Cal.  313;  17  Pac.  Rep.  217. 


MEMBERSHIP.  89 

purpose,  agree  upon  a  name,  elect  trustees,  and  put  their  arti- 
cles on  record  when  duly  perfected.  They  thereby  become  a 
corporation  by  the  name  agreed  upon,  and  may  take,  hold  and 
convey  property,  and  exercise  the  ordinary  functions  of  cor- 
porate bodies.  The  corporators  are  not  necessarily  profess- 
ors of  any  particular  belief  or  faith,  or  members  of  any 
church.  Corporate  succession  is  kept  up  by  conferring  the 
privileges  of  corporators  on  all  who  regularly  attend  wor- 
ship in  the  society,  and  contribute  to  its  support.  The 
trustees  who  are  to  manage  the  temporal  affairs  of  the 
corporation  may,  or  may  not,  be  church  members.  Con- 
nected with  the  corporation  there  is  a  church  organization. 
This  is  spiritual  in  its  objects.  Its  name  may,  or  may  not,  be 
identical  with  the  name  of  the  corporation.  This  church  has 
its  voluntary  members  who  are  supposed  to  hold  certain  relig- 
eous  dogmas.  It  is  not  incorporated,  and  has  nothing  whatever 
to  do  with  the  temporalities.  It  does  not  control  the  property 
or  the  trustees.  Membership  in  the  corporation  arises  by 
operation  of  law  from  attendance  at  public  worship,  and 
contributing  to  the  support  of  the  corporation.  The  church 
can  admit  members  into  fellowship  with  it,  according  to  its 
rules  of  admission,  but  it  can  not  receive  a  person  into  the  cor- 
poration, nor  can  it  expel  a  person  from  the  incorporated  soci- 
ety. On  the  other  hand,  the  corporation  has  nothing  to  do 
with  the  church,  except  as  it  looks  after  the  temporalities,  and 
provides  for  the  wants  of  the  church.  It  can  not  alter  the 
church  faith;  it  can  not  receive  members;  it  can  not  expel  mem- 
bers; it  can  not  prevent  the  church  from  receiving  or  expel- 
ling whomsoever  that  body  shall  see  fit  to  receive  or  expel.1 
A  religious  corporation  has  no  spiritual  capacity;  it  is  given 
capacity  in  respect  to  temporalities  only.  The  rules  of  the 
church  as  to  the  discipline  of  members  have  no  relation  to  the 
corporate  property  or  corporate  matters.  It  has  no  power  to 
try  a  corporator  for  moral  delinquency,  or  to  disfranchise  him 
in  consequence  thereof.1  Immoral  men  may  not  usually  attend 
divine  worship,  contribute  to  the  support  of  religious  corpora- 

1  Hardin  v.  Baptist  Church,  51  58N.Y.  108;  Livingston  v.  Trinity 
Mich.  137;  Calkins  v.  Cheney,  92  Church,  16  Vroom  280 ;  Sale  v.  Bap- 
Ill  164.  ti-t  Church,  62  Iowa  26. 

3 People  v.   German,  etc.,  Church, 


90  MEMBERSHIP. 

tions,  and  insist  upon  their  rights  in  such  societies,  but  when 
they  do,  the  law  does  not  distinguish  between  them  and  those 
who  have  been  regularly  admitted  into  the  church.  The  ex- 
pulsion of  members  from  unincorporated  societies  will  be 
treated  of  further  along  in  this  chapter,  but  sufficient  has 
already  been  said  to  show  that  a  religious  corporation,  the  sole 
object  of  which  is  to  hold  and  administer  property,  may  not 
expel  its  members. 

Expulsion  from  membership  in  the  church  is  effectual  to 
exclude  the  member  from  the  spiritual  privileges  enjoyed  by 
its  members,  but  it  does  not,  in  the  least,  affect  his  status  as  a 
member  of  the  incorporated  society.  If,  because  of  his  ex- 
pulsion from  the  church,  any  one  should  exclude  him  from  the 
proper  enjoyment  of  the  property  of  the  corporation  for  re- 
ligious worship  and  instruction,  he  may  maintain  an  action 
therefor,  and,  in  fixing  his  damages,  the  injury  to  his  feelings 
may  be  considered.  The  same  course  may  be  taken  if  pre- 
vented from  exercising  his  right  to  vote  when  entitled  to 
such  right  by  the  statute.1  But  the  excluded  member  must, 
in  such  cases,  sue  the  persons  who  illegally  excluded  him. 
An  action  in  damages  for  expulsion  from  the  church  and  de- 
privation of  church  privileges  will  not  lie  against  the  religious 
corporation  connected  with  the  church.  While  it  is  true  that 
the  church  is  an  integral  part  of  the  corporation,  it  by  no 
means  follows  that  the  corporation  is  chargeable  with  the 
wrongful  acts  of  members  of  the  church  in  expelling  its  mem- 
bers. Counties,  towns,  and  school  districts  are  integral  parts 
of  the  state,  but  the  state  is  not  for  that  reason  liable  for  their 
torts.  The  incorporated  society  may  neither  expel  members 
from  the  church,  nor  prevent  such  expulsion,  and  it  is  neither 
liable  in  damages  for  a  wrongful  expulsion  from  the  church, 
nor  can  it  be  proceeded  against  by  mandamus  to  restore  an 
expelled  member  to  his  spiritual  privileges.2 

§  41.  Surrender  by  a  society  of  its  right  to  expel  its 
members. — While  it  is  not  competent  for  an  incorporated 
society,  by  its  constitution  or  by-laws,  to  surrender  absolutely 
its  inherent  power  of  expulsion — its  right  to  perform  an  act 
necessary  to  the  preservation  of  its  existence,  it  may,  never- 

1  People  v.  German  Church,  53  N.  Mich.  137;  People  v.  German  Church, 
Y.  103.  supra, 

2  Hardin    v.     Baptist    Church,   51 


MEMBERSHIP.  91 

theless,  by  proper  laws,  qualify  and  abridge  that  right,  by 
pointing  out  the  manner  in  which,  and  the  occasions  on  which, 
it  will  exercise  such  right.  A  limitation  which  does  not  de- 
prive the  incorporated  society  of  the  right  to  protect  and  pre- 
serve its  franchise  is  unobjectionable.  Where  the  constitution 
of  such  a  society  provides  that "  the  manner  of  suspension  for 
the  non-payment  of  dues  and  assessments  s  ball  be  detailed  in 
the  by-laws, "  and  no  by-law  is  adopted  by  the  society  on  the 
subject  of  suspension,  the  neglect  of  the  society  to  provide  a 
mode  and  manner  of  suspension,  prohibits  it  from  exercising 
its  inherent  power  to  expel  a  member  for  failure  to  perform 
his  corporate  duty  in  the  payment  of  dues  and  assessments.1 

§  4l\  Double  sentence  of  society. — A  society  may  in  proper 
cases  provide  in  its  by-laws  for  the  imposition  of  a  fine,  sus- 
pension, or  expulsion.  It  may  provide  for  a  double  punish- 
ment, as  for  a  fine  and  suspension.  But  it  is  well  settled  that 
in  the  absence  of  direct  provisions,  the  power  to  give  an  alterna- 
tive sentence  does  not  authorize  a  double  one,  and  that  such  a 
sentence  is  void. 

§  43.  Statute  of  limitations. — In  the  absence  of  any  pro- 
vision on  the  subject  in  the  constitution  and  by-laws  of  a 
society,  there  is  no  limitation  as  to  the  time  within  which  an 
inquiry  may  be  made  by  it  into  offenses  against  its  laws.  The 
statutes  of  limitation  of  a  state  do  not  govern  such  an  inquiry, 
unless  they  are  made  a  part  of  the  laws  of  the  society.2 

I L.  Bight  to  trial  by  jury  does  not  apply  to  proceedings 
in  expulsion. — The  constitutional  provisions  relative  to  the 
right  of  trial  by  jury  do  not  apply  to  proceedings  taken  bvan 
incorporated  society  for  the  expulsion  of  a  member  for  offenses 
within  its  jurisdiction,  but  only  to  trials  of  issues  of  fact  in  civil 
and  criminal  proceedings  in  courts  of  justice.  They  have  no 
application  to  incorporated  societies  which  have  the  power  of 
expulsion  or  disfranchisement,  or  to  any  bodies  not  exercising 
the  ordinary  jurisdiction  of  courts;  or  to  collateral  or  incidental 
proceedings  which  are  disciplinary  in  their  character,  by  asso- 
ciations authorized  by  law,  as  to  the  conduct  of  their  members 
who  have  voluntarily  submitted  themselves  to  their  juris- 
diction.8 

1  District  Grand  Lodge  v.  Cohn,  20       s  People  v.  Association.  18  Al>l>.  Pr. 
111.  App.  83ft.  271;  In  re  Newell  Smith,  10  Wend 

*  Chase  v.  Cheney,  58  111.  509.  449. 


92  MEMBERSHIP. 

§  45.  Regularity  of  proceedings  in  expulsion. — A  member 
of  a  mutual  benefit  society  has  a  right  to  demand  a  substantial 
compliance  with  its  rules  governing  proceedings  in  expulsion. 
"When  a  rule  prescribes  that  the  vote  on  the  expulsion  of  a 
member  shall  be  given  in  writing,  it  is  an  irregularity  vitiating 
the  proceedings  to  take  a  vote  by  casting  white  and  black 
balls.1  Where  articles  providing  for  the  appointment  of  a  com- 
mittee of  investigation  by  the  presiding  officer  do  not  direct 
how  or  when  it  shall  be  made,  an  appointment  made  immedi- 
ately after  the  adjournment  of  the  meeting  which  passed  the 
resolution  of  reference,  by  the  second  vice-president  who  had 
presided  at  that  meeting,  and  a  subsequent  appointment  by  the 
first  vice-president  to  the  places  of  two  members  first  appointed 
who  had  refused  to  act,  are  not  open  to  objection  as  to  the 
source  or  time  of  the  appointments.2  A  member  was  notified 
that  on  a  certain  night  he  would  be  tried  by  his  lodge  upon 
certain  charges.  He  thereupon  notified  the  principal  officer  of 
the  lodge  that,  owing  to  certain  duties  which  he  was  obliged  to 
perform  as  county  surveyor,  he  could  tnot  be  present  at  the 
time  and  place  fixed  for  the  trial  of  the  charges.  He  made  no 
application  for  a  continuance  based  on  proof  of  the  fact  that  he 
had  public  duties  to  perforin  at  that  time.  He  was  tried  at  the 
time  set,  and  expelled.  The  court  held  that  the  notice  to  the 
principal  officer  was  not  of  itself  sufficient  to  oust  the  lodge  of 
jurisdiction  to  try  him  on  the  charges  at  the  appointed  time 
and  place.3  A  society  has  no  right  to  expel  a  member  merely 
because  he  does  not  appear,  and  without  proving  the  charges 
against  him.  Even  though  the  party  charged  does  not  appear, 
still,  proof  of  his  offense  should  be  required."  The  return  to  a 
mandamus  was  quashed  because  the  member  had  been  expelled 
without  proof  of  the  offense  with  which  he  was  charged,  his 
presence  and  failure  to  deny  the  charge  having  been  taken  by 
the  society  as  sufficient  evidence  of  his  guilt.5 

Where  an  incorporated  society  in  its  by-laws  adopts  the  rules 
in  Cushing's  Manual  for  the  government  of  all  debates  of  its 
members,  and  no  other  provision  is  made  on  that  subject  in 

'Hoeffnerv.  Grand  Lodge,  41  Mo.  4  People  v.  Society,  65  Barb.  357; 

App.  359.  Strempel  v.   Rubing,  4  N.  Y.  Supp. 

2  People  v.  Society,  28  Mich.  261.  534. 

3  Robinson  v.  Yates  City  Lodge,  86  5Rex  v.  Faversbam,  8  T.  R.  356. 
111.  598. 


MEMBERSHIP.  93 

the  by-laws,  Cushing's  Manual  must  control  the  members  of 
the  society  in  that  matter.  That  provides  that  if  offensive 
words  are  not  taken  notice  of  at  the  time  they  are  spoken,  but 
the  member  is  permitted  to  finish  his  speech,  and  then  any 
other  person  speaks,  or  any  other  matter  of  business  inter- 
venes before  notice  is  taken  of  the  words  which  gave  offense, 
the  words  are  not  to  be  written  down  or  the  member  using 
them  censured.  Therefore,  where  a  member  in  debate  at  a 
meeting  of  the  society  uses  what  are  considered  offensive  and 
improper  words  which  are  not  objected  to  or  noticed  at  the 
time,  or  during  the  meeting,  he  may  not  be  tried  and  expelled 
for  using  those  words,  upon  charges  made  at  a  subsequent 
meeting,  even  though  the  use  of  such  words  Avas,  under  the 
charter  and  by-laws,  a  sufficient  cause  of  expulsion.  An  expul- 
sion under  such  circumstances  is  irregular  and  without  author- 
ity.1 When  a  member  has  been  tried  before  an  incorporated 
society  in  which  a  two-thirds  vote  of  the  members  present 
was  required  to  expel  a  member,  and  more  than  one-third  of 
those  present  voted  against  the  resolution  to  expel  him,  this 
amounted  to  an  acquittal.  A  subsequent  trial  and  expulsion, 
on  the  same  charges,  for  the  same  offense,  is  irregular  and 
void.  A  member  who  has  been  regularly  tried  and  acquitted 
by  a  society  may  not  be  twice  put  in  jeopardy  before  the 
society  for  the  same  offense.2  But  where  a  member  has  been 
irregularly  and  illegally  expelled  from  a  society,  it  may  set 
aside  and  annul  the  void  proceedings,  restore  the  member, 
and  proceed  against  him  regularly  for  the  same  offense.3 

When  the  laws  of  a  society  provide  that  a  member  may  be 
expelled  for  refusing  to  comply  with  the  decision  and  order  of 
its  tribunal  in  any  matter  submitted  to  the  tribunal  under  the 
by-laws,  it  is  error  to  expel  a  member  for  such  refusal,  when 
he  has,  under  the  by-laws,  appealed  from  the  decision  of  the 
tribunal  to  the  society  at  large.  When  a  member  has  submit- 
ted a  controversy  to  such  tribunal,  and  appealed  from  its 
decision,  under  provisions  of  the  by-laws  giving  him  the  right 
of  appeal,  the  society  has  no  right  to  proceed  against  him  for 

'People  v.  American  Institute,  44  47  Wis.  670.     But  see  Otto  v.  Union, 

How.  Pr.  468.  75  Cal.  S18,  IT  Pac.  Rep.  217,  where 

2  Commonwealth  v.  Guardians  of  the  reinstatement  of  the  member  for 
Poor,  6  Ser.  &  R.  (Pa.)  469.  the  purpose  of  expelling  him  again 

3  State  v.  Chamber  of  Commerce,  was  taken  as  evidence  of  bad  faith 


94  MEMBERSHIP. 

a  failure  to  comply  with  such  decision,  and  the  denial  to  him 
of  his  right  of  appeal  from  such  decision  is  an  irregularity 
and  an  error,  from  the  effects  of  which  a  court  of  equity  will 
afford  him  relief.1 

The  requirements  and  provisions  of  the  constitution  and  by- 
laws of  a  society  are  intended  as  safeguards  for  the  members 
against  improper  suspension  and  expulsion,  and  their  office  is 
to  secure  to  its  members  a  fair  and  impartial  trial.  The 
neglect  or  refusal  of  the  society  to  comply  with  them  in  any 
substantial  particular  in  a  proceeding  in  expulsion  will  be 
irregular  as  against  a  protesting  member.  A  society  was 
authorized  under  its  by-laws  to  expel  members  for  the  non- 
observance  of  its  constitution,  by-laws  or  rules,  provided  that 
"  no  such  expulsion  *  *  shall  be  made,  except  on  charges 
preferred,  a  copy  of  which  shall  be  served  upon  the  member 
so  charged."  Under  such  provisions,  a  notice  summoning  the 
relator  to  attend  a  meeting  of  the  board  of  directors,  at  a  time 
and  place  therein  stated,  to  show  cause  why  he  should  not  be 
expelled  from  membership  for  a  violation  of  a  certain  by-law, 
does  not  comply  with  the  provision  of  the  by-law,  requiring 
charges  to  be  made  and  a  copy  to  be  served,  if  the  member 
refuses  to  answer  the  charge.  He  has  a  right,  under  such  a 
contract  of  membership,  to  a  trial  on  charges  and  specifica- 
tions which  he  shall  have  full  opportunity  to  answer.3  The 
constitution  of  a  society  directed  that  charges  against  a  mem- 
ber should  be  referred  to  a  committee  of  five  members ;  that 
this  committee  should  reduce  to  writing  its  opinion  as  to  the 
guilt  or  innocence  of  the  accused,  and  present  it  to  the  lodge ; 
that  at  the  next  meeting  after  the  presentation  of  the  report, 
a  ballot  should  be  taken,  and  if  a  majority  of  the  votes  cast 
were  in  favor  of  the  report,  it  should  be  recorded  as  the  judg- 
ment of  the  lodge.  There  was  no  provision  as  to  the  pro- 
cedure when  a  majority  of  the  ballots  were  cast  against  the 
report.  It  was  charged  against  a  member  that  he  gave  a  false 
age  upon  entering  the  lodge.  The  committee,  to  whom  the 
charges  were  referred,  examined  into  them  and  reported  in 
writing:  to  the  lodg;e  that  all  the  members  of  the  committee 
believed  that  a  false  age  had  been  given,  but  that  three  of  its 

1  Powell   v.Abbott,  9    W.    N.    C.       2  People  v.  Musical  Union,  47  Hun 
231.  273. 


MEMBERSHIP.  95 

members  did  not  believe  that  the  false  statement  had  been 
made  with  any  malicious  intent,  or  intent  to  defraud.  At  the 
next  meeting  the  motion  that  the  charge  be  sustained,  and 
that  the  accused  be  suspended  for  ninety -nine  years  was  carried 
by  a  large  majority.  This  proceeding  was  held  to  be  irregular 
and  void,  because  the  report  of  the  committee  practically  ex- 
onerated him  from  guilt,  and  the  suspension  was  beyond  the 
authority  of  the  lodge  under  the  constitution.1 

Where  a  society  has  jurisdiction  to  expel  its  members  but  no 
mode  of  procedure  is  specified,  it  may  adopt  such  mode  of 
trial  as  it  pleases,  subject  only  to  the  implied  limitation  that 
it  be  fair.2 

§  46.  Record  of  proceedings  in  expulsion. — It  is  a  maxim 
of  the  law  that  a  corporation  speaks  by  its  records.  It  will  be 
presumed  that  entries  made  in  the  minutes  of  meetings  of  a 
society  have  been  made  by  the  proper  officer.  The  entry  of 
an  order  of  suspension  on  the  minutes  of  the  society  is  prima 
facie  evidence  of  its  legality,  but  parol  evidence  is  admissible 
to  show  that  it  was  merely  the  order  of  an  officer,  without  the 
requisite  vote  of  the  members.3  The  records  and  minutes  of  a 
private  corporation  are  admissible  to  prove  its  acts,  but  they 
are  not  the  only  mode  of  proof.  They  are  prima  facie  admis- 
sible, but  may  be  rebutted  by  parol.4  While  the  records  of  a 
society  may  be  contradicted,  and  it  may  be  shown  that  they  do 
not  fully  disclose  all  the  proceedings  which  ought  to  have 
been  recorded,  yet  it  is  clear  that  proof  of  that  kind  must  be 
so  convincing  and  satisfactory  as  to  leave  no  doubt  but  that 
tin'  matter  attempted  to  be  interpolated  into  the  records  of  the 
proceedings  of  the  society  actually  occurred.  Where  the  rec- 
ords of  each  meeting  are  read  at  each  succeeding  meeting,  and 
are  subject  to  correction  at  such  succeeding  meeting,  the 
presumption  will  be  strong  in  favor  of  their  truth  and 
exactness.6  The  expulsion  of  a  member  from  an  incor- 
porated society  should  be  shown  by  its  minutes,  proceed- 
ings  or  records,   and  not  by  the   statements  of  its  officers 

•Vivar  v.   Supreme  Lodge,  K.  of      4  Partridge  v.  Badger,  25  Barb.  147; 

P.,  52  N.  J.  L.  4.").-,;  20  Ail.  Rep.  36.       Whart  Ev.  §  661  :  Abbott's  Trial  Evi- 

8  Spillman  v.  Supreme  Council,  157   dence,  pg.   16,  §56;  pp.  51,  52,  §65. 

Mass.  128;  31  N.  East.  Rep.  776.  Hawkshaw  v.  Supreme  Lodge,  29 

3 Knights  of  Honor  v.  Wi.kser,  72   Fed.  Rep.  770. 
Tex  ss,  2ol  ;  12  S.  \V.  Rep.  175. 


96  MEMBERSHIP. 

or  members ;  in  other  words,  it  should  be  shown  by  some 
official  action  or  corporate  act  on  the  part  of  the  society.1 
The  records  which  every  corporation  is  supposed  and  bound  to 
keep,  must  show  upon  their  face  the  exact  cause  of  expulsion, 
and  all  of  the  proceedings  necessary  to  authorize  action  upon  its 
part.  These  facts  should  be  determined  by  the  record  itself 
in  case  they  are  brought  in  question.2  Where  the  laws  of  the 
society  require  that  charges  preferred  against  a  member  be 
read  in  open  lodge,  that  a  copy  of  them  be  furnished  to  him 
under  the  seal  of  the  lodge,  and  that  he  be  cited  to  appear  to 
answer  them,  the  record  should  show  that  these  requirements 
were  fulfilled ;  and  a  mere  record  of  a  sentence  of  expulsion, 
or  suspension,  without  any  record  of  the  proceedings  to  found 
this  sentence  upon,  is  a  nullity.3  The  minutes  and  reports  in 
writing  are  the  best  evidence  of  what  took  place  in  meet- 
in  o-s  of  the  tribunal  which  expelled  a  member,  for  upon  them 
the  resolution  of  expulsion  is  based.  In  an  action  by  a  mem- 
ber of  a  society,  who  has  been  expelled,  to  have  the  resolution 
of  expulsion  adjudged  null  and  void,  a  member  of  that  tri- 
bunal may  not,  as  a  witness,  make  any  statement  as  to  what 
particular  conduct  on  the  part  of  the  expelled  member  was 
deemed  by  the  tribunal  improper  and  prejudicial.  Such  a 
statement  would  be  his  opinion  merely.  What  is  wanted  in 
such  an  action  are  the  facts,  not  the  conclusions  or  judgment 
of  the  witness.  It  would  clearly  not  be  permitted  to  the  wit- 
ness to  place  his  interpretation  upon,  or  give  his  opinion  of, 
the  proceedings  and  actions  of  the  tribunal  which  are  evidenced 
by  such  minutes  and  reports.  Nor  may  such  a  witness  be 
asked  to  state  what  conduct  on  the  part  of  the  expelled  mem- 
ber, he,  as  a  member  of  the  tribunal,  deemed  to  be  improper 
and  prejudicial  to  the  society.  When  the  witness  voted  upon 
the  resolution  of  expulsion,  he  performed  a  judicial  act,  and  he 
may  no  more  be  asked  the  particular  ground  upon  which  he 
based  his  judgment  than  a  judge,  a  juror  or  arbitrator  could, 
after  judgment,  be  questioned  as  to  the  reason  or  basis  of  his 
determination.  Inquiry  into  what  was  said  by  members  of 
the  tribunal  during  the  investigation  about  the  charges  and  the 

1  High  Court  v.  Zak,  136  111.  185.  3  Lazensky  v.   Supreme  Lodge,  31 

2  Roehler  v.  Society,  22  Mich.  86;    Fed.  Rep.  592. 
Medical    Society  v.   Weatherly,    75 

Ala.  248. 


MEMBERSHIP.  97 

guilt  of  the  accused  member,  would  violate  the  sanctity  of 
such  proceedings,  and  weaken  their  efficiency.  Such  inquiry 
is  clearly  opposed  to  the  policy  out  of  which  such  investiga- 
tions originate,  and  by  which  they  are  to  be  conducted.  Such 
investigations  are  in  their  nature  judicial.  If  the  conduct  and 
action  of  the  members  of  the  tribunal,  in  the  discussion  and 
decision  of  questions  before  it,  are  to  be  the  subject  of  public 
discussion  and  comment,  it  would  greatly  embarrass  them,  and 
prove  to  be  a  restraint  upon  a  free  debate  on  the  questions 
involved.  What  member  of  the  society  would  be  willing  to 
serve  on  such  a  tribunal,  if  his  remarks  concerning  the  mat- 
ters for  discussion  and  decision  could  be  made  public  ?  "With 
the  result  of  the  discussion,  as  expressed  by  a  proper  and  suf- 
ficient vote,  the  parties  must  be  satisfied.1  It  is  evident  that 
the  records  of  a  society  are  as  much  the  records  of  one  member 
as  of  another,  and  that  they  are  evidence  against  him.2  They 
are  evidence  in  disputes  between  members  of  the  society,  but 
not  against  strangers.3  They  are  competent  to  show  who  are 
its  members. 

1  Loubat  v.  Leroy,  65  N.  Y.  138.  Grand  Lodge,  131  111.  498;  22  N.  East 

2Diehl  v.  Adams  County  Mutual,  Rep.  487,  at  §  252. 

58   Pa.  St.  443;  Washington   Society  3  Commonwealth  v.  Woelper,  3  Ser 

v.  Bacher,  20  Pa.  St.  425;  Bagley  v.  &  R.  (Pa.)  28. 

7 


CHAPTER  IT. 

MEMBERSHIP.— PART  II. 

§  47.  Reinstatement  of  member;  remedies  in  society  must  be  exhausted. 

48.  Jurisdiction  of  appellate  tribunal  when  appeal  is  irregular. 
48a.  Subordinate  society  refusing  to  obey  order  of  superior  body. 

49.  When  decision  of  appellate  tribunal  is  final. 

50.  Death  pending  appeal  to  courts  of  the  society. 

51.  Injunction  to  restrain  illegal  expulsion. 

52.  Action  for  benefits  where  expulsion  of  the   member  is  inquired 

into. 

53.  Action  for  damages  for  unlawful  expulsion. 

54.  Injunction  to  reinstate  expelled  member. 

55.  Reinstatement  by  courts  of  justice. 

56.  Mandamus  the  proper  remedy. 

57.  Mandamus  a  discretionary  writ. 

58.  Delay  in  applying  for  restoration. 

§47.  Reinstatement  of  member  to  Lis  rights;  remedies 
provided  for  the  expelled  member  in  the  laws  of  the  so- 
ciety.— Where  a  voluntary  society  provides,  in  its  charter, 
constitution  or  by-laws,  a  mode  for  reviewing  and  correcting 
any  error  or  injustice  on  the  part  of  any  subordinate  tribunal 
bv  which  a  member  has  been  tried  and  expelled,  he  is  bound 
to  avail  himself  of  the  remedy  so  provided,  before  he  may  ask 
a  court  of  law  or  equity  to  investigate  the  regularity  of  the 
proceedings.  These  proceedings,  being  subject  to  review,  may 
be  annulled  by  the  action  of  the  tribunals  created  in  the  so- 
ciety and  clothed  with  authority  to  investigate  the  proceed- 
ino-s  of  such  subordinate  tribunals:  and  those  who  fail  to  avail 
themselves  of  the  opportunity  thus  offered  to  correct  these  ir- 
regularities within  the  society,  will  be  repelled  from  the  courts. 
Courts  will  not  in  any  wise  interfere  with,  or  inquire  into 
the  affairs  of  such  a  society  until  they  are  obliged  to  act,  and 
until  the  aggrieved  member  has  exhausted  all  the  remedies  pro- 
vided in  its  laws.  It  is  not  necessary  that  its  laws  shall  pro- 
vide in  express  terms  that  the  member  must  appeal  from  the 

(98) 


MEMBERSHIP. 


99 


decision  expelling  him  to  a  higher  tribunal  in  the  society, 
before  seeking  restoration  by  a  court  of  justice;  the  mere 
right  to  appeal  from  such  decision,  for  the  reasons  just  stated, 
creates  a  duty  on  the  part  of  the  expelled  member  to  exhaust 
his  right  of  appeal  in  the  society.1 

A  by-law  providing  that  a  member  Avho  has  been  expelled  may 
be  reinstated  at  any  regular  quarterly  meeting  of  the  society  by 
a  two-thirds  vote  of  all  the  members  present,  after  having  paid 
all  dues  and  fines  standing  against  him,  and  an  extra  fine  of 
fifty  dollars,  is  not  intended  to  provide  a  method  of  reviewing 
the  proceedings  instituted  to  remove  the  member,  and  he  is 
not  obliged  to  resort  to  it  before  instituting  proceedings  to  pro- 
cure a  peremptory  mandamus  restoring  him  to  his  rights  and 
privileges  as  a  member.3  Such  a  provision  has  reference  to  a 
lawful  expulsion,  and  to  cases  where  the  society  may  exercise 
its  discretion  in  the  restoration  of  a  member.  After  having 
submitted  his  rights  to  a  tribunal  of  the  society,  or  after  having 
appealed  from  a  lower  to  a  higher  tribunal  in  the  order,  a 
member  may  not,  before  the  decision  is  announced,  apply  for 
relief  to  the  courts  of  the  land.3 

It.  has  been  held  that  the  rule  requiring  a  member  to  exhaust 
his  remedies  in  the  society  before  resorting  to  the  courts  ap- 
plies, in  its  strictness,  only  to  those  cases  in  which  the  right  is 
given  to  appeal  to  an  officer  or  to  a  tribunal  other  than  the 
tribunal  which  convicted  and  expelled  him.  When  the  rem- 
edy provided  in  the  society  is  not  in  the  nature  of  an  appeal  to 
a  higher  officer  or  body,  or  to  a  superior  tribunal,  but  is  merely 
in  the  nature  of  a  petition  for  a  rehearing  to  the  same  per- 
sons who  convicted  and  expelled  the  member,  the  court  will 
examine  into  facts  concerning  the  trial  and  expulsion,  and  de- 
termine  whether,  under  all  the  circumstances,  the  aggrieved 
member  should  have  applied  to  them  for  a  reconsideration  of 
the  case  upon  its  merits  before  resorting  to  the  court.  A  reso- 
lution of  expulsion  was  adopted  by  the  governing  committee 

'Karcher  v.   Supreme   Lodge  K.  2  People  v.  Musical  Union,  47  Hun 

ofH.,  187  Mass.  868;  Harrington  v.  278;  People  v.  Protective  Union,  118 

Workingmen's  Ben.    Association,  70  N.  Y.  101;  23  N.  East.  Rep.  129;  af- 

Ga.  340;    Poultney  v.  Bachman,  81  firming  43  Hun 454. 

Hun  (N.  Y.)  49:  White  v.  Brownell,  2  8Strempelv,  Rubing,  4  N.  Y.  Supp. 

Daly  329;  Lafoncl  v.  Deems,  81  N.  Y.  534. 
507;  see  §§  111,  311. 


100  MEMBERSHIP. 

of  a  society,  by  a  vote  of  fourteen  to  four,  upon  the  report  of 
a  committee  of  five  of  its  members,  who  had  been  appointed 
to  investigate  and  report  as  to  the  facts.  The  by-laws  of  the 
society  provided  that  in  cases  of  expulsion  the  expelled  mem- 
ber might  make  an  application  to  the  governing  committee  for 
a  rehearing.  The  expelled  member,  however,  without  making 
such  an  application  as  he  was  authorized  to  do  by  the  by-laws, 
resorted  to  the  court.  It  was  claimed  that,  before  bringing 
the  action,  the  plaintiff  should  have  applied  to  the  committee 
to  have  the  resolution  of  expulsion  reconsidered  and  revoked, 
and  that,  in  consequence  of  his  failure  to  do  so,  the  court 
would  refuse  to  interfere  in  his  behalf.  But  the  court,  in 
considering  this  question,  said:  "The  resolution  which  they 
(the  members  of  the  governing  committee)  adopted  conclu- 
sively establishes  the  fact  that  they  had  formed  and  acted 
upon  convictions  adverse  to  the  plaintiff,  and,  after  that,  the 
probability  is  extremely  slight,  indeed,  that  they  could  have 
been  induced  to  change  their  views  and  act  differently  upon 
an  application  for  the  reconsideration  of  the  resolution.  The 
probability  that  favorable  action  might  in  this  manner  have 
been  secured  by  the  plaintiff  is  so  extremely  remote  that, 
in  the  reasonable  administration  of  the  law,  he  should  not  be 
held  to  be  required  to  apply  for  such  reconsideration  before 
commencing  an  action  to  restrain  the  enforcement  of  the  reso- 
lution against  him  if  that  should  turn  out  to  have  been  un- 
lawfully adopted."  '  This  distinction  is  not  sustained  by  anal- 
ogy to  proceedings  in  courts  of  law,  for  a  motion  for  a  new 
trial  is  required  to  be  made  before  the  tribunal  in  which  the 
trial  took  place,  before  an  appeal  may  be  prosecuted.  It  is 
but  fair  that  the  tribunal  in  which  the  trial  took  place  should 
have  an  opportunity  to  correct  its  errors,  and  it  is  to  be  pre- 
sumed that  such  tribunal  will  act  in  good  faith  upon  the  appli- 
cation. Because  the  members  of  a  tribunal  have  formed,  and 
acted  upon,  convictions  adverse  to  a  member,  it  must  not  be 
assumed  that  they  will  continue  to  hold  those  convictions  after 
they  have  looked  carefully  into  an  application  for  a  recon- 
sideration of  their  acts  in  the  premises.  Every  presumption 
is  in  favor  of  the*  fairness  and  honesty  of  a  tribunal  which  has 
expelled  a  member  from  a  society.     The  interests  of  the  fellovv- 

1  Loubat  v.  Union  Club,  40  Hun  546. 


MEMBERSHIP.  101 

members  are,  naturally,  that  the  rights  of  each  individual 
member  shall  be  sedulously  guarded,  as  the  same  measure  they 
apply  to  others  may  in  the  end  be  administered  to  themselves. 
The  obligation  to  appeal  to  the  higher  tribunals  within  the 
society  is  not  imposed  where  the  judgment  is  void  for  want  of 
jurisdiction.  Such  a  judgment  of  expulsion  may  be  likened 
to  a  judgment  rendered  by  a  court  which  has  no  jurisdiction 
of  the  subject-matter  or  of  the  person.  No  appeal  or  writ  of 
error  is  necessary  to  get  rid  of  such  a  judgment;  it  is  void  in 
all  courts,  and  in  all  places.  Thus,  a  suspension  of  a  lodge  by 
an  officer  not  vested  by  the  laws  of  the  order  with  that  power, 
without  notice  and  opportunity  to  the  lodge  for  a  hearing,  is 
absolutely  void,  and  cannot  affect  the  legal  rights,  or  change 
the  legal  status  of  the  lodge  or  any  of  its  members,  and  from 
such  an  order  of  suspension  no  appeal,  in  the  mode  provided 
in  the  laws  of  the  order,  is  necessary  to  save  the  rights  of  the 
Lodge  or  its  members.1 

Where  the  expulsion  of  a  member  by  his  lodge  was  without 
jurisdiction,  as  where  it  was  founded  on  a  charge  on  which  the 
lodge  had  no  jurisdiction  to  try  him,  his  expulsion  is  null  and 
void,  and  it  is  not  incumbent  on  him  to  take  steps  to  have  it 
reversed  in  a  higher  judicatory  of  the  society.2  If  when  he 
has  appealed  to  a  superior  tribunal,  the  member  is  practically 
deprived  of  the  benefit  of  such  remedy,  by  evasion,  intentional 
delays,  or  other  unjust  procedure  on  the  part  of  such  tribunal. 
he  may  resort  to  the  courts,  alleging  and  proving  such  eva- 
sion, delays,  or  other  unjust  procedure,  as  an  excuse  for  not 
having  exhausted  his  remedy  in  the  society.  But  it  must 
clearly  appear  in  such  a  case  that  the  appellate  tribunal  is  act- 
ing in  bad  faith  and  in  practical  disregard  of  the  member's 
right  of  appeal.'  There  is  no  presumption  thai  there  is  open 
to  the  expelled  member  a  remedy  under  the  constitution  and 
Laws  of  the  association  itself,  for  a  review  of  the  proceedings 
in  his  expulsion,  ami,  in  case  of  error,  for  his  reinstatement. 
This  must  be  made  to  appear.4 

§48.    Jurisdiction  of  appellate  tribunal  when  appeal  is 

'Hall  v.  Supreme  Lodge,  24 Fed.       ■  Carles  ▼.  Drury,  i  7ea.  &  Beames 
Rep.  160;  Mulroy  v.  Supreme  Lodge,    164;  White  \.  Brownell,  2  Daly  829, 
29  Mo.  App.  488.  *01erj  v.  Brown,  61  How.  Pr.  92. 

4  Glardon  v.  Supreme  Lodge,  50  Mo. 
App.  45. 


102  MEMBERSHIP. 

irregularly  taken. — "When  the  laws  of  a  society  give  to  its 
superior  tribunal  the  right  to  hear  complaints  and  appeals 
and  to  redress  grievances  arising  in  subordinate  lodges  or 
councils,  the  validity  of  the  action  of  that  tribunal  in  revers- 
ing and  setting  aside  a  judgment  of  expulsion  rendered  in 
such  lodge  or  council  may  not  be  disputed  on  the  ground  that 
the  appeal  was  not  taken  and  presented  in  the  exact  manner 
prescribed  by  its  laws.  While  the  superior  tribunal  may  not 
be  required  to  act  on  an  appeal,  taken  without  regard  to  the 
prescribed  rules,  it  may  certainly  waive  all  such  requirements. 
Prescriptions  with  regard  to  appeals  are  designed  for  the 
government  of  subordinate  lodges  or  councils  and  their  mem- 
bers, but  they  are  not  limitations  upon  the  authority  of  the 
superior  tribunal.  Where  the  general  authority  to  redress 
grievances  is  conferred  upon  some  higher  body  or  committee 
of  the  society,  it  undoubtedly  has  the  power,  even  when  no 
appeal  has  been  taken,  to  summon  before  it  the  necessary 
members  and  subordinate  officers,  and  give  such  redress  as  a 
grievance  may  imperatively  demand.' 

§  48a.  Subordinate  society  refusing  to  obey  order  of 
superior  boily. — In  an  action  by  a  benefit  society  against  a 
member  for  money  loaned,  the  defense  was  that  the  defendant 
had  been  wrongfully  deprived  of  membership  in  the  lodge  and 
money  privileges  thereto  appertaining,  exceeding  plaintiff's 
claim,  and  that,  upon  defendant's  appeal  from  such  expul- 
sion to  the  grand  lodge,  according  to  the  rules  of  the  society, 
his  reinstatement  was  ordered,  which  order  the  local  lodge 
refused  to  obey.  It  was  held  that  a  court  of  equity  would 
refuse  to  aid  plaintiff  until  the  order  of  reinstatement  was 
obeyed,  according  to  the  rules  of  the  society,  although  the 
grand  lodge  itself  had  no  mandatory  powers  to  enforce  its 
superior  authority ;  that  the  court  would  grant  relief  in  equity 
by  refusing  to  enforce  payment  of  the  claim  of  the  society 
against  such  member,  until  the  case  was  heard  on  its  merits.2 

§49.  Appeal  to  superior  tribunal  "whose  decision  shall 
be  final." — It  is  a  question,  upon  which  the  authorities  do  not 
agree,  whether  a  society  may  create  judicial  tribunals  for  the 
final  and  conclusive  settlement  of  controversies  arising  under 

1  Vivar  v.  Supreme  Lodge,  52  N.  J.  2  Schmidt  v.  Lodge,  84  Ky.  490  ;  2 
L.  455  ;  20  Atl.  Rep.  36.  S.  W.  Rep.  156. 


MEMBERSHIP.  103 

its  contracts  of  membership  or  its  contracts  of  insurance. 
Some  cases  hold  that  it  may,1  and  others  hold  that  it  may  not.a 
The  constitution  of  an  unincorporated  society  provides  that 
"  any  member  having  a  grievance,  shall  have  the  right  to  lay 
his  case  before  the  central  body,  who  shall  take  action  thereon, 
and  whose  decision  shall  be  final."  A  member  of  the  society, 
who  had  been  expelled,  applied  to  the  central  body  for  rein- 
statement to  membership,  but  his  application  was  denied.  He 
then  instituted  a  proceeding  for  reinstatement  in  the  courts. 
It  was  urged  that  the  court  had  no  jurisdiction,  and  upon  this 
question  the  court  said  :  "  No  doubt  when  action  is  properly 
taken  in  the  manner  indicated,  it  is  final,  and  the  courts  will 
not  interfere,  but  when,  under  the  guise  of  remedying  the 
grievance  of  a  member,  the  central  body  acts  in  bad  faith,  and 
maliciously  makes  the  subject  of  the  grievance  a  pretext  for 
oppression  and  wrong,  its  actions  may,  however,  to  that  extent, 
be  the  subject  of  review."  3 

§  50.  Death  of  the  member  pending  his  appeal  to  the 
higher  courts  of  the  society. — A  member  was  expelled  by 
his  lodge.  He  appealed  under  its  laws  to  the  grand  dictator, 
and  pending  the  appeal  he  died.  Subsequently  the  judgment 
of  expulsion  was  reversed  by  the  grand  dictator.  He  was 
reinstated  by  a  vote  of  the  lodge,  as  required  by  the  by-laws, 
and  the  assessments  due  at  the  time  of  his  death  were  paid  as 
]  provided  in  the  by-laws.  The  court  said :  "  If  the  analogies  of 
the  common  law  are  to  be  regarded,  the  appeal  did  not  abate  by 
the  death  of  (the  member).4     By  the  reversal  of  the  sentence 

•Fritz  v.  Muck,  62  How.   Pr.    70;  Lodge    v.    Schmidt,     98     Ind.    374; 

Toramv.  Association,  4  Pa.  St.  519;  Supreme   Council   v.  Forsinger,    125 

Cincinnati    Lodge    v.     Littlebury,  0  Ind.")-':  25  N.  East.  Rep.  129;  Austin 

cin.  L.  Pull.  237;  Mohawk  Lodge  v.  v.  Searing,  16  N.  Y.  112;  Strasser  v. 

Wentworfh,  4    Cin.     L.    Bull.    513;  Staats,  13  N.  Y.  Supp.  167;  Poultney 

Anacosta  Tribe  v.  Murbach,  1.')  Bid,  v.  Bachman,  10  Abb.  New  Cases,  252; 

91;  Osceola  Tribe  v.  Schmidt,  57  Md,  Stephenson    %-.  Ins.  <\>..  54   Me.  70; 

98;  Rood  v.  Benefit  Society.  :;i  Fed-    H [ns.  Co.  v.  Morse, 20 Wall. 445; 

Rep.  62;  Van  Poucke  v.  Society,  63  Barron  v.  Burnside,   L21    U.  S.  186; 

Mich.  378;   6  Western    Rep    L32;   29  Scott   v.   Avery,    •">  House  of    Lords 

N.  W.  Rep.    863;  Canfield  v.   Great  Cases  811;  see  §§  816,  317. 

Camp,  87  Mich.  626.  3Otto  v.    Union,   75  Cal.    313;    17 

*Dolan  v.  Court  of  Good  Samari-  Pac.  Rep.  217. 

tan.   L28  Mass.  4:37:    Elkhart  Mutual  'Green  v.  Watirins,  6  Wheat.  260. 
v.  Houghton,  98  Ind.  149;   Supreme 


104  MEMBERSHIP. 

of  expulsion,  and  by  the  action  of  the  lodge,  he  was  reinstated 
as  at  the  date  of  his  expulsion,  and  was  entitled  to  his  benefit. 
It  may  be  added  that  such  was,  at  the  time,  the  law  of  the 
order,  which  had  held,  by  its  supreme  dictator,  that  if  a  decis- 
ion of  expulsion  was  reversed  on  final  appeal,  the  appellant 
stands  a  member  as  if  there  had  been  no  such  judgment,  and 
he  must  pay  all  back  dues  and  assessments;  and  if,  pending  the 
appeal,  he  die,  had  regularly  tendered  his  dues  and  assess- 
ments, and  after  death  the  appeal  is  decided  in  his  favor,  his 
benefit  will  be  paid  as  one  who  died  in  good  standing,  less  the 
amount  of  his  tendered  and  unpaid  dues  and  assessments."  ' 
A  mutual  benefit  society  was  open  to  members  of  a  certain 
order  only.  Its  laws  provided  that  if  any  member  should  be 
suspended  from  his  subordinate  lodge,  his  membership  in  the 
society  should  cease  at  the  time  of  such  suspension  ;  but  that 
if  his  suspension  should  be  set  aside  by  higher  authority  in 
the  order,  his  standing  in  the  society  should  be  the  same  as  if 
no  action  had  been  taken,  and  he  must  pay  all  assessments 
made  during  such  suspension.  A  member  was  suspended 
from  his  subordinate  lodge.  He  appealed  to  higher  au- 
thority in  the  order,  and  after  his  death  the  suspension  was 
reversed.  It  was  held  that  the  member  was  in  good  standing 
at  his  death,  and  that  his  beneficiary  was  entitled  to  recover 
the  benefit  fund  from  the  society.  The  court  said :  "  The  sec- 
ond ground  on  which  the  validity  of  the  action  of  this  com- 
mittee is  denied  is  that  (the  member),  being  dead  at  the  time, 
could  not  be  restored  to  membership.  But  it  was  not  required 
that  he  should  be  actually  restored  to  membership.  It  was 
enough,  in  the  words  of  the  constitution,  *  if  the  '  action  of 
the  subordinate  lodge  was  reversed  by  higher  authority.'  His 
death  in  no  way  prevented  such  a  reversal.  The  rights  to  be 
impaired  by  that  action  survived  him,  and  the  persons  in  whom 
those  rights  vested  were  as  really  aggrieved  thereby  as  he 
would  have  been  had  he  lived.  Their  grievance,  arising  in 
the  (lodge),  the  grand  lodge  had  power  to  redress.  It  is  an 
every-day  occurrence  to  reverse  judgments  erroneously  ren- 
dered against  those  who  have  since  died,  and  although  such  a 

1  Marck  v.  Supreme  Lodge  K.  of  H. ,    733;  Connelly  v.  Association,  58  Conn. 
29  Fed.  Eep.  896;  see  Jackson  v.  As-    552;  20  Atl.  Rep.  671. 
sociation,  78  Wis.  4C3;  47  N.  W.  Rep. 


MEMBERSHIP.  105 

reversal  can  not  restore  the  status  of  the  decedent  in  fact,  it 
may  do  so  in  legal  contemplation."  ' 

§  51.  Injunction  to  restrain  illegal  expulsion. — Courts 
of  chancery  have  jurisdiction  in  a  great  variety  of  cases  to  en- 
join parties  from  proceeding  in  courts  of  law.  Their  juris- 
diction extends  as  well  to  proceedings  in  the  highest  as  in  the 
lowest  and  most  limited  tribunals;  and  courts  of  one  state  may 
enjoin  parties  from  proceeding  in  the  courts  of  other  states. 
But  injunctions  issue  against  parties,  and  not  against  courts; 
and  the  jurisdiction  in  this  respect  has  legal  limits  which  ap- 
ply to  proceedings  in  all  courts  and  tribunals.  The  proceed- 
ings of  a  society  in  expelling  members  are  judicial  in  their 
character,  and,  in  such  proceedings,  the  society  performs  the 
functions  of  a  court  of  limited  and  special  jurisdiction.  A 
court  of  chancery  has  no  more  power  over  the  proceedings  of 
a  court  of  special  and  limited  jurisdiction  than  over  proceed- 
ings of  courts  of  general  jurisdiction.  Where  the  inferior  tri- 
bunal has  jurisdiction  of  the  subject-matter,  a  bill  in  equity 
will  not  lie  to  correct  and  restrain  alleged  irregularities  in  the 
pleadings  and  procedure  before  it;  nor  will  it  lie  to  enjoin 
the  tribunal  from  a  judicial  determination  of  the  matter  before 
it,  in  order  that  the  court  may  inquire  into  the  alleged  im- 
proper constitution  of  the  tribunal.  The  general  principle  is, 
that  a  court  of  chancery  is  not  the  proper  tribunal  to  correct 
the  errors  and  irregularities  of  inferior  tribunals,  and  that  in 
ordinary  cases  the  court  may  not  interfere/  A  medical  so- 
ciety, incorporated  under  a  charter  empowering  it  to  expel  its 
members,  summoned  the  plaintiffs,  who  were  members,  to  ap- 
pear before  a  board  of  trial  composed  of  members,  to  answer 
charges  preferred  by  a  committee,  that  the  plaintiffs  had  vio- 
lated the  by-laws  of  the  society  by  conduct  unworthy  of  hon- 
orable physicians  and  members  of  the  society,  in  practicing 
according  to  a  certain  exclusive  theory  or  dogma,  and  that 
plaintiffs  belonged  to  an  association  whose  purpose  was  at 
variance  with  the  principles  of  the  society.  Plaintiffs,  there- 
upon, filed  a  bill  in  equity  against  the  society,  the  board  of 
trial,  and  the   committee   preferring  charges,  alleging  that  it 

1  Vivar  v.  Supreme  Lodge,  52  N.  J.    cases  there  cited:  Mooers  v.   Sraed- 
L.  455;  20AU.  Rep.  36.  ley.   (5  Johns.   Ch.    88;  Hey  wood  v. 

5 Kerr    on    Injunctions,  C.  3,  and    Buffalo.  4  Kern.  5:;). 


108  MEMBERSHIP. 

was  the  defendants'  intention  to  expel  the  plaintiffs  only  and 
solely  for  practicing  homeopathy;  that  the  body  to  try  them 
was  wrongfully  constituted;  and  that  the  proceedings  were 
irregular  and  void.  The  supreme  court  of  Massachusetts  held 
that  the  court  had  no  jurisdiction  to  interfere  by  injunction 
with  the  proceedings  before  a  court  of  limited  and  special 
jurisdiction.1  It  was  held,  in  one  case,  by  the  judge  of  the 
court  of  common  pleas  for  Philadelphia,  that  an  injunction 
will  lie  to  restrain  a  contemplated  illegal  expulsion.  In  stat- 
ing the  grounds  of  this  decision,  the  court  said  :  "  Equity  pre- 
vents mischief.  It  does  not  wait  until  it  is  consummated.  It 
does  not  even  measure  the  paces  by  which  it  advances.  It 
meets  it  at  the  threshold,  and  seeks  to  prevent  a  meditated 
wrong  more  often  than  to  redress  an  injury  already  done. 
Courts  of  equity  constant!}7-  decline  to  lay  down  any  rule 
which  shall  limit  their  power  and  discretion  as  to  the  partic- 
ular cases  in  which  special  injunctions  shall  be  granted  or 
withheld."  2  The  right  of  a  court  of  equity  to  interfere  in 
this  class  of  cases,  at  least  where  the  society  is  unincorpo- 
rated, has  been  maintained  by  other  courts.3 

Where  a  member  of  a  society  has  been  cited  to  appear 
before  one  of  its  officers  and  show  cause  why  his  rights  of 
membership  should  not  be  forfeited  for  failure  to  pay  assess- 
ments, injunction  to  restrain  the  forfeiture  will  not  lie  before 
the  member  has  appeared  before  such  officer  and  asserted 
his  defense.4 

§  52.  Action  for  benefits  where  the  expulsion  of  the 
member  is  inquired  into. — Where  a  person,  formerly  a  mem- 
ber of  a  mutual  benefit  society,  sues  the  society  for  benefits,  and 
the  question  of  his  proper  expulsion  is  inquired  into  and  deter- 
mined under  any  of  the  issues  presented  in  the  case,  both  the 
plaintiff  and  the  society  are  concluded  by  such  determination, 
unless  the  decision  is  appealed  from.  An  expelled  member 
commenced  an  action  against  the  society  for  the  recovery  of 

"Gregg  v.  Society,  111  Mass.  185;  Rep.  217;  Huston  v.  Rentlinger,    91 

see  Sturges  v.  Board  of  Trade,  86  111.  Ky.  208;  15  S.  W.  Rep.  867. 

441.  4  Whiteside    v.  Association,  23  N. 

2  Leech  v.  Harris,  2  Brewster  (Pa.),  Y.  Supp.  63  ;  68  Hun  565  ;  citing 
571 ;  citing  Story's  Equity  Jurispru-  Thomas  v.  Union,  121  N.  Y.  50 ;  24 
dence,  §  862.  N.  East.  Rep.  24. 

3  Otto  v.  Union,  75  Cal.  313;  17  Pac. 


MEMBERSHIP.  107 

weekly  allowances.  His  claim  embraced  a  period  before  his 
alleged  expulsion,  and  extending  beyond  it.  Among '  the 
defenses  interposed  to  his  right  to  recovery  was  that  of  his 
expulsion  prior  to  the  bringing  of  the  suit  upon  his  claim.  A 
judgment  was  rendered  in  this  action  for  weekly  allowances 
up  to  the  date  of  his  expulsion,  but  his  claim  for  benefits  after 
that  period  was  rejected.  Upon  the  trial  the  record  of 
plaintiff's  expulsion  was  given  in  evidence,  and  other  evidence 
was  also  given  touching  the  regularity  of  the  expulsion  under 
the  rules  of  the  society.  The  plaintiff  might,  perhaps,  have 
avoided  a  decision  upon  the  question  of  his  expulsion,  had  he 
limited  his  claim  to  the  time  of  the  alleged  expulsion,  and 
could  then  have  properly  invoked  the  aid  of  the  court  to  annul 
the  record  of  his  expulsion,  if  he  had  sufficient  cause  therefor ; 
but  by  including  in  his  claim  for  weekly  allowances  a  period 
beyond  his  expulsion,  and  by  submitting  the  question  of  its 
regularity  to  the  decision  of  the  court  upon  the  trial  of  the 
claim,  he  became  bound  by  its  decision,  and  his  only  remaining 
remedy  was  by  appeal  from  the  judgment. 

Upon  application,  made  after  the  rendition  of  this  judg- 
ment, for  restoration  to  membership,  the  court  dismissed  the 
plaintiff's  complaint  upon  the  sole  ground  that  the  question  of 
his  expulsion  had  been  determined  against  him  on  the  trial  of 
his  claim.1 

When  a  matter  is  regularly  determined,  in  whatever  form, 
by  a  competent  tribunal,  it  is  not  open  to  inquiry  in  any  other 
proceeding  between  the  same  parties.  A  judgment  at  law 
is  conclusive  in  equity  upon  the  same  subject  between  the 
same  parties.  And  where  the  legality  of  the  expulsion  of  a 
member  is  once  judicially  determined  in  a  legal  or  equitable 
controversy  between  the  parties,  in  which  an  issue  involving 
the  question  has  been  distinctly  raised,  the  door  to  further 
inquiry  upon  that  subject  is  forever  closed. 

§  53.  Action  against  the  society  for  damages  for  unlawful 
expulsion. — As  a  general  principle  it  may  be  laid  down  that 
a  member  of  a  corporation  may  lawfully  sue  the  corporate 
body  for  an  injury  which  he  has  sustained  from  the  miscon- 

1  Bachman  v.  Arbeiter  Bund,  64  "Woolsey  v.  Odd  Fellows,  61  Iowa 
How.  Pr.  442;  see  §g    310,  319;  see   492;  10  N.  W.  Rep.  570. 


108  MEMBERSHIP. 

duct  of  its  officers  or  agents,1  and  that  where  a  power  to  act  in 
certain  matters  has  been  delegated  to  a  select  body,  such  as  a 
committee  or  board  of  directors,  and  has  been  exercised  by  it, 
the  corporation  is  to  be  considered  as  having  done  all  that 
the  select  body  did  in  the  proceeding.  But  it  is  exceedingly 
doubtful  whether  a  member  of  a  mutual  benefit  society,  who 
has  been  illegally  expelled,  may  waive  his  right  to  a  mandamus 
for  restoration  to  membership,  and  sue  the  society  for  damages 
for  the  unlawful  expulsion.  Such  a  member  undoubtedly  has 
property  interests,  to  which  he  is  entitled  to  protection  from 
the  courts,  but  if  he  has  not  been  lawfully  expelled,  he  is  entitled 
to  be  restored  to  his  rights.  It  is  manifest  that  the  most  exact 
and  complete  remedy  is  by  restoration,  for  in  this  way  he  is 
not  only  vindicated  in  his  character,  but  is  also  re-established 
in  the  very  rights  which  belong  to  him.  An  action  for  dam- 
ages, however,  assumes  the  illegal  expulsion,  waives  the  wrong, 
and  demands  compensation  for  the  injury.  If  he  waives  the 
wrong,  acquiesces  in  the  expulsion,  and  forfeits  his  right  to 
restoration,  it  does  not  follow  that  he  is  entitled  to  compen- 
sation. One  may  not  always  waive  a  tort  for  the  purpose  of 
maintaining  an  action  which,  without  the  tort,  would  have 
no  foundation.  In  an  action  for  assault  and  battery,  if  one 
waive  the  tort,  there  is  nothing  to  sue  for.  Members  of  the 
society  alone  have  rights  in  its  property,  and  if  a  member 
waives  the  illegality  of  the  act  of  expulsion,  and  acquiesces  in 
it  as  a  legal  and  accomplished  fact,  he  must  take  it  with  its 
consequences;  and  the  consequences  of  an  expulsion,  with  the 
element  of  illegality  dropped  out  of  it,  are  a  valid  deprivation 
of  membership,  for  which  no  action  lies.3  Ordinarily  a  mutual 
benefit  society  has  no  fund,  which  may  be  applied  to  the  pay- 
ment of  a  judgment  for  damages,  and  it  would  seem  that  one 
who  had  voluntarily  given  up  his  right  to  restoration  to  the 
rights  and  privileges  of  membership  should  not  be  permitted 
to  recover  such  a  judgment  against  it.  It  is  a  serious  question 
whether  any  measure  of  damages  can  be  laid  down  in  an  action 
for  compensation  for  an  unlawful  expulsion.  Members  of  a 
mutual  benefit  society  have  no  severable  interest  in  the  fund 

•Gray  v.  Bank,  3  Mass.  385.  Cal.  240;  27  Pac.   Rep.  191;  Cooley, 

2Lavalle  v.  Societe,  17  R.  1.680:  24   Torts,  2d  Ed.,  107-111;  see  Blumen- 

Atl.  Rep.  467;    Peyre  v.  Society,  90    feldt  v.  Korschuck,  43  Bl.  App.  434. 


MEMBERSHIP.  109 

or  property.  It  can  not  be  determined  whether  they  will  con- 
tinue to  pay  dues  or  assessments  and  thus  continue  their  mem- 
bership. The  payments  to  be  made  by  them  may  far  exceed 
the  value  of  the  property  or  funds  of  the  society,  and  there 
may  be  a  loss  to  them  if  they  continue  in  membership. 
Matters  of  speculation  and  guessing  are  too  uncertain  to  form 
a  basis  for  the  measure  of  damages.  It  must  be  stated,  how- 
ever, that  the  few  decisions  on  the  question  as  to  the  right  of 
one  who  has  been  illegally  expelled  to  maintain  an  action  for 
damages  are  not  in  accord.  It  has  been  squarely  held  that 
such  an  action  may  be  maintained,  though  nominal  damages 
only  were  given  in  that  case.1 

In  some  cases  there  are  dicta  that  such  an  action  may  be 
maintained,  but  there  is  no  discussion  of  the  grounds  on  Avhich 
the  right  of  action  rests.  It  is  assumed  that  compensation 
should  be  given  for  an  injury  caused  by  a  violation  of  a  right.2 
In  a  suit  for  damages  for  wrongful  expulsion,  it  is  not  suf- 
ficient for  plaintiff  to  aver  that  the  proceedings  in  expulsion 
were  irregular  and  void,  or  that  the1  charges  against  him  were 
not  such  as  he  might  lawfully  be  expelled  for  under  the  contract 
of  membership,  or  that  he  had  no  notice  of  the  meeting  at 
which  lie  was  expelled,  or  of  the  charges  against  him.  lie  may 
not  sue  for  loss  of  membership  if  the  adjudication  is  void.  In 
such  a  case  his  remedy  would  clearly  he  to  enforce  by  umn- 
da/mus  his  restoration,  a  right  lie  still  has.  His  remedy  would 
nol  !)•'  t<»  obtain  damages  for  its  loss.3  An  action  may  not  lie- 
maintained  againsl  a  society  by  a  person  to  recover  damages 
on  account  of  his  suspension  for  misconduct,  when  the  pro- 
ceeding was  had  under  the  provisions  of  its  by-laws  and 
was  affirmed  on  appeal  taken  by  himself  under  the  by-laws, 
and  it,  is  immaterial  whether  the  tacts  upon  which  the  deter- 
mination was  predicated  justified  the  suspension  or  not.1 
Where  an  organization,  such  as  a  chamber  of  commerce,  act- 
ing on  a  void  adjudication  of  expulsion,  deprives  a  member  of 
his  rights  as  such,  it  commits  a  trespass  upon  him.  and  is  liable 

'  Ludowiski  v.  Society,  29  Mo.  App.  'Lavalle  v.  Societe,   IT  i:    l.  680; 

337.  -M    Ail.    Rep.    W7;    Blumenthal    v. 

1  Society  v.  Bacher,  20  Pa.  St  125;  Chamber  of   Commerce,   7  ('in.   L. 

People   v.  German  Church,  58  N.  T.  Bull.  827. 

103.  *  Peyre  v.  Society,  90  Cal.  240. 


110  MEMBERSHIP. 

in  damages  for  the  trespass.  It  is  not  necessary  for  him  to 
show  that  he  was  assaulted  and  put  out  of  a  meeting  or  ses- 
sion, or  that  in  attempting  to  enter,  he  was  violently  laid  hold 
on  and  kept  out.  It  is  sufficient  to  show  that  he  was  physic- 
ally kept  out ;  that  he  could  not  have  gone  in  without  bring- 
ing about  a  breach  of  the  peace  or  an  assault.  He  need  not 
put  the  matter  to  a  test.1 

The  bringing  of  an  action  by  a  person  who  has  been  ille- 
gally expelled  from  an  incorporated  society,  to  recover  dam- 
ages for  deprivation  of  his  rights  and  privileges,  is  a  waiver 
of  his  right  to  a  mandamus  to  restore  him  to  membership.  A 
member  of  an  incorporated  society  was  expelled,  without  any 
notice  to  him  or  knowledge  on  his  part.  After  such  expulsion 
he  brought  an  action  to  recover  damages  for  the  loss  of  his 
rights  and  privileges  as  a  member  occasioned  by  such  expul- 
sion, and  in  the  action  he  recovered  a  verdict  and  judgment  for 
$275.  While  this  cause  was  pending  in  error  in  an  appellate 
court,  the  member  sought  by  mandamus  to  be  restored  to 
membership  in  the  society.  In  considering  the  effect  of  the 
action  for  damages  upon  the  application  for  the  writ  of  man- 
damus, the  court  said  :  "  The  gravamen  of  this  action  is,  that 
by  the  expulsion  he  has  lost  all  the  rights  and  privileges  of 
membership.  That  being  true,  the  satisfaction  of  his  judg- 
ment is  compensation  for  all  he  has  lost,  and  nothing  remains 
for  which  he  can  complain  further.  But  without  such  judg- 
ment, if  he  brings  his  action  for  these  causes,  that  action  is 
based  upon  the  theory  that  he  has  lost  membership  and  all  his 
rights,  and  that  he  can  not  be  restored  thereto ;  otherwise  he 
has  no  cause  of  action.  If  his  rights  are  not  gone,  and  gone 
irrevocably,  his  petition  is  not  true  when  it  says  he  has  been 
deprived  of  those  rights.  In  bringing  such  action,  therefore, 
in  order  to  maintain  it  he  necessarily  abandons  all  interest  in 
the  society."  a 

§  51.  Injunction  to  reinstate  expelled  member. — There 
are  several  cases  in  the  books,  in  which  expelled  members 
have  exhibited  bills  in  equity  against  their  societies  complain- 
ing of  their  illegal  expulsion,  and  praying  an  injunction  to 

1  Blumenthal  v.  Chamber  of  Com-       2  State  v.  Slavonska  Lipa,  28  Oh. 
merce,  7   Cin.  L.  Bull.  327.     But  see    St.  665. 
Innes  v.  Wylie,  1  Car.  &  Kir.  262. 


MEMBERSHIP.  Ill 

restrain  the  society  from  interfering  in  any  manner  with  the 
full  enjoyment  of  their  rights,  privileges  and  franchises  of 
membership.  It  is  evident,  however,  that  in  these  cases  the 
members  have  mistaken  their  remedy.  Injunction  is  a  pre- 
ventive remedy.  It  comes  between  the  complainant  and  the 
injury  he  fears  or  seeks  to  avoid.  If  the  injury  be  already 
done,  the  writ  can  have  no  operation,  for  it  can  not  be  applied 
correctively  so  as  to  remove  it,1  Xor  will  such  a  bill  for  an 
injunction  be  aided  by  an  allegation  that  a  petition  for  man- 
damus  has  been  tiled  in  a  court  of  law,  praying  that  the  soci- 
ety show  cause  why  a  writ  of  mandamus  should  not  be  issued, 
requiring  it  to  restore  the  complainant  to  all  his  rights,  privi- 
leges and  functions  of  membership.  Resort  may  not  be  had 
to  the  writ  of  injunction,  either  directly  or  indirectly,  to  ob- 
tain affirmative  relief.  "Where  a  party  is  excluded  from  mem- 
bership in  an  incorporated  society,  the  rightfulness  of  his 
expulsion  must  be  tried  at  law,  and,  until  his  rights  are  thus 
settled,  a  court  of  equity  will  not  interfere,  by  injunction,  to 
restore  him  to  his  position,  even  though  he  may  suffer  a  loss 
of  profits  which  he  might  make  through  his  membership  be- 
fore the  action  at  law  can  be  determined.  An  injunction 
should  not  be  awarded  in  doubtful  cases.  Its  use  is  the  exer- 
cise of  a  delicate  power,  which  should  not  be  encouraged  by 
courts,  except  in  clear  and  well  defined  cases  falling  within 
principles  of  equity  jurisprudence,  sanctioned  by  well  adjudi- 
cated precedents.  The  injury  which  an  expelled  member  of  a 
board  of  trade  or  chamber  of  commerce  may  suffer  in  tin1  loss 
of  profits  which  he  might  make  by  reason  of  the  privileges  of 
membership,  can  ool  be  regarded  assufficienl  t<>  justify  a  court 
of  equity  to  interfere  by  injunction  and  place  the  expelled 
member  in  the  full  enjoyment  of  the  rights  and  privileges  of 
membership,  without  stopping  to  inquire  whether  the  expul- 
sion was  Legal  or  illegal.'  Th<  plaintiff,  who  had  been  expelled 
from  the  Board  of  Trade  of  the  city  of  Chicago  by  its  board  of 
directors,  brought  suit  in  equity  to  obtain  an  injunction  to  re- 
strain said  board  from  interfering  with  his  access  into  the  hall 
of   the   association,   and   with   his   carrying   on  his   business 

'Wangelin  v.  Gtoe,50  111.468;  Me-   v.  Board  of  Trade,  80  Til.  sr>:  Baxter 
nard  v.  Hood.  (5s  111.  122.  v.  Board  of  Trad.,  88  111.  HO. 

'Wangelin  v.  Goe,  supra;  Fisher 


112  MEMBERSHIP. 

therein.  He  alleged  that  two  of  the  directors  were  not  nat- 
uralized citizens  of  the  United  States;  that  two  of  them  were 
prejudiced  and  unfair;  that  some  did  not  hear  the  evidence, 
but  read  it  after  it  had  been  written  out;  that  the  prosecuting 
witness  was  improperly  sworn  before  a  notary  public,  and  that 
plaintiff  was  not  guilty  of  the  charges  brought  against  him. 
The  court  held  that  such  a  proceeding  was  not  proper,  as  it 
was  an  attempt  to  attack  collaterally  the  judgment  of  ex- 
pulsion.1 

§  55.  Reinstatement  to  membership  in  an  incorporated 
society  by  courts  of  justice. — Where  the  charter  of  a  society 
provides  for  an  offense,  directs  the  mode  of  proceeding  and 
authorizes  the  society  on  conviction  of  a  member  to  expel  him, 
this  expulsion,  if  the  proceedings  are  not  irregular,  is  conclu- 
sive, and  can  not  be  inquired  into  collaterally  by  mandamus  or 
any  other  proceeding.  The  courts  have  jurisdiction  to  keep 
such  tribunals  in  the  line  of  order,  and  to  prevent  abuses,  but 
they  do  not  inquire  into  the  merits  of  what  has  passed  in  rem 
adjudicatam  in  a  regular  course  of  proceeding.  The  society 
in  such  a  case  acts  judicially,  and  its  sentence  is  conclusive 
like  that  of  any  other  judicial  tribunal.  This  is  nothing  more 
than  the  application  to  the  decrees  of  these  societies,  affecting 
their  members,  of  the  familiar  principles  which  obtain  in  rela- 
tion to  the  validity  and  effect  of  judicial  determinations  of 
controversies  between  citizens  in  the  courts.  If  the  court  has 
jurisdiction  of  the  subject-matter  and  the  parties,  its  judg- 
ment, however  erroneous  on  the  law  and  the  facts,  concludes 
the  parties  unless  appealed  from.  When  an  expelled  member 
resorts  to  a  court  of  justice  to  compel  the  society  to  reinstate 
him,  he  does  not  appeal  from  the  judgment  of  the  society; 
courts  of  justice  have  no  appellate  jurisdiction  in  such  cases. 
All  that  he  can  ask  the  court  to  decide  is,  whether  or  not  the 
charge  against  him  was  sufficient  under  the  powers  of  the 
society,  and  whether  the  necessary  steps  for  his  expulsion 
were  regularly  taken  after  notice  and  opportunity  to  be  heard. 
The  supervision  which  courts  maintain  over  the  right  of  ex- 
pulsion in  corporate  societies  is  derived  from  what  is  termed 
the  visitorial  power  of  courts.  In  this  country,  the  visitorial 
power  of  correcting  the  abuses  and  irregularities  of  incorpo- 

1  Pitcher  v.  Board  of  Trade,  121  111.  412;  13  N.  East.  Rep.  187. 


MEMBERSHIP.  113 

rated  societies  is  vested  in  the  courts  of  general  jurisdiction. 
The  assent  of  the  members  to  the  provisions  of  the  charter 
and  by-laws  is  a  fundamental  requisite  of  membership,  and 
where  the  right  of  expulsion  for  certain  causes  is  conferred 
upon  the  incorporated  society,  it  may  be  exercised  in  the  man- 
ner and  for  the  purposes  prescribed  in  its  laws.  But  while 
courts  will  not  inquire  into  the  merits  of  the  decisions  of  in- 
corporated societies  in  expelling  a  member  in  the  regular 
course  of  proceedings,  yet,  if  the  expulsion  has  been  irregu- 
larly conducted,  without  due  authority,  sufficient  cause  or 
proper  notice,  the  courts  will  interfere  by  mandamus  to  com- 
pel the  restoration  of  the  member  to  his  corporate  franchise.1 
It  has,  in  one  or  two  cases,  been  doubted  whether  membership 
in  an  incorporated  society  which  is  purely  literary,  social, 
scientific,  benevolent  or  religious,  and  owns  no  property,  is 
such  a  right  as  the  court  will  protect,  and  whether  the  right 
of  meeting  the  other  members,  and  enjoying  their  companion- 
ship, is  such  a  vested  right  as  courts  will  take  cognizance  of.2 
But  it  is  clearly  settled,  both  upon  principle  and  authority, 
that  the  franchise  which  is  vested  in  each  member  of  a  corpo- 
ration is  a  vested  right  and  privilege  which  the  courts  will  not 
permit  such  societies  to  abuse  or  destroy.  In  this  country  the 
franchise  is  granted  by  the  state,  and  it  will  be  presumed  in 
the  courts  of  the  state  that  its  grant  is  of  value  to  its  citizens. 
Tims,  in  one  case  it  was  held  that  the  place  of  trustee  in  an 
eleemosynary  corporation,  though  no  emoluments  are  attached 
to  it,  is  yet  a  franchise  of  such  a  nature  that  a  person  improp- 
erly dispossessed  of  it  is  entitled  to  restoration,  and  a  peremp- 
tory mandamus  was  awarded.3  Such  a  franchise  is  an  incor- 
poreal   hereditament.      All    immunities   and    franchises   are 

'People  v.  Mechanics'  Aid  Society  wealth,  52  Pa.  St.  V2~t\  Smiths 
32  Mich.  86;  State  v.  Chamber  of  Society  v.  Vandyke,  2  Whart.  (Pa.) 
Commerce,   20    Wis.   63;    Common-   308. 

wealth  v.  German  Society,  15  Pa.  St.  'People  c.r  rd.  Hire  v.  Board  of 
251;  People  v.  Medical  Society,  Ml  Trade, 80  111.  134;  Waring  v.  Medical 
Barb.  570;  Commonwealth  v.  Guar-  Society,  8  Am.  L.  Reg.  ."»:!:'». 
dians  of  Poor,  6  Ser.  &  K.  Hi!)-.  'Fuller  v.  Trustees,  6  Conn.  532; 
Commonwealth  v.  Pa.  Beneficial  So-  Bee  state  v.  Society,  88  Ga.  608; 
ciety,  2  Ser.  &  R.  141;  Common-  Manning  v.  San  Antonio  Club,  63 
wealth  v.  St.  Patrick's  Ben.  Soc,  3  Texas,  166, 
Binney    448;     Society   v.    Common- 

8 


114:  MEMBERSHIP. 

deemed  valuable  in  law.  The  owners  have  a  legal  estate  and 
property  in  them,  and  legal  remedies  to  support  and  recover 
them,  in  case  of  any  injury  to,  or  obstruction  of  them. 

A  member  has  a  right  to  insist  that  proceedings  for  his  ex- 
pulsion were  not  conducted  in  substantial  compliance  with  the 
rules  of  the  society  governing  such  proceedings.  Voting  on 
the  question  of  his  expulsion  by  casting  white  and  black  balls, 
when  the  rules  prescribe  that  votes  shall  be  given  in  writing 
is  an  irregularity  which  will  invalidate  the  proceedings.1  In 
the  absence  of  any  fixed  rules  of  procedure  in  the  constitution 
and  by-laws  of  a  society,  the  question  is  not  whether  the  pro- 
ceedings for  the  hearing  and  expulsion  of  a  member  might 
not  have  been  conducted  differently,  and  more  in  conformity 
with  those  which  obtain  in  courts,  under  statutes  and  fixed 
rules,  but  whether  or  not  the  principles  of  natural  justice  have 
been  violated  in  withholding  from  him  a  fair  and  impartial 
hearing,  before  the  passage  of  the  resolution  for  his  expulsion. 
So  long  as  he  has  had  notice,  and  an  opportunity  to  be  fully 
heard,  he  can  have  no  reasonable  ground  of  complaint  on 
account  of  this  or  that  omitted  step  or  form,  on  the  part  cf 
the  tribunal  thus  acting  quasi-judiciallv.2  Courts  will  take 
cognizance  of  the  right  of  a  tribunal  to  proceed  with  the  trial 
of  a  member,  but  not  of  matters  which  relate  to  the  mode  of  pro- 
cedure.3 They  will,  therefore,  take  no  cognizance  of  a  refusal 
of  the  tribunal  to  issue  a  commission  to  take  testimony,  of  its 
refusal  to  grant  a  new  trial  or  of  the  alleged  misconduct  of 
a  member  of  the  tribunal.  These  are  matters  which  relate  to 
the  mode  of  proceeding,  and  not  to  the  right  to  proceed. 
And  for  the  same  reason,  they  will  not  consider  the  fact  that 
the  witnesses  were  not  sworn  when  examined  by  the  tribunal, 
where  the  contract  does  not  expressly  provide  that  they  shall 
be  sworn.4  A  member  of  a  society  was  charged  with  being 
guilty  of  fraud  and  improper  practices.  He  appeared  before 
the  governing  committee  which  tried  him,  made  statements 
and  explanations,  cross-examined  the  witnesses  who  were  pro- 
duced, and  read  his  defense  at  great  length.     At  a  subsequent 

1  Hoeffner  v.  Grand  Lodge,  41  Mo.    486;  Chase    v.   Cheney,   58  111.    509. 
App.  359.  Connelly  v.   Association,   58    Conn. 

2  Hutchinson     v.      Lawrence,     67    552;   20  Atl.  Rep.  671. 

How.  Pr.  38.  4  Walker   v.    Wainwright,    sujira, 

8  Walker  v.  Wainwright,  16  Barb.    State  v.  Verein,  3  Cin.  Law  Cull.  295. 


MEMBERSHIP.  115 

meeting,  in  his  absence,  two  accusing  witnesses  were  examined 
by  the  committee.  The  accused  member  afterward  demanded 
that  these  witnesses  be  recalled  to  be  cross-examined  by  him, 
but  the  committee  refused  to  recall  them,  and  expelled  him. 
The  court  held  that  the  action  of  the  committee  at  the 
subsequent  meeting  was  not  just  or  fair  to  the  accused  in 
either  a  legal  or  equitable  sense,  and  that  it  was  an  irregu- 
larity of  procedure  of  which  he  had  a  right  to  complain.1 
A  benevolent  order  contained  three  grades  of  member- 
ship, to  the  highest  of  which,  the  supreme  council,  peti- 
tioner belonged.  The  laws  of  the  order  provided  for  the 
expulsion  of  a  member,  and  gave  the  method  of  procedure 
in  expelling  members  of  the  two  subordinate  councils  only. 
The  supreme  council  was  vested  with  original  jurisdiction  in 
cases  of  its  own  members,  and  had  appellate  jurisdiction  as  to 
matters  emanating  from  the  two  lower  councils.  Petitioner 
A\as  expelled  by  the  supreme  council,  and  petitioned  for  a 
mandamus  to  compel  his  reinstatement,  on  the  ground  that 
the  procedure  followed  in  expelling  him  did  not  conform  to 
the  method  provided  by  the  laws  of  the  society.  It  was  held 
that  the  mode  of  procedure  provided  in  the  case  of  the  expul- 
sion of  members  of  the  two  lower  councils  did  not  apply  to 
proceedings  by  the  supreme  council  to  expel  one  of  its  mem- 
bers, and  that  that  body  might  adopt  any  method  of  trial 
which  it  might  choose,  subject  to  the  implied  limitation  that 
it  must  he  fair.5 

The  judgment  of  a  proper  tribunal  of  a  society  againsl  ;i 
member  on  charges  which  by  its  constitution  and  by-laws  it 
was  authorized  to  investigate  and  act  upon  will  not  be  exam- 
ined into  by  a  court  on  the  weight  or  the  competency  of  the 
evidence  introduced  to  snst;iin  the  charges.1  The  exclusion  of 
a  competent  witness  offered  by  the  accused,  on  the  ground 
that  he  is  incompetent,  is  a  mistake  of  judgment,  and  not  an 
irregularity  of  procedure.     If.  od  appeal  to  the  higher  tribu- 

1  Hutchinson  v.  Lawrence,  67  How,  144  Mass.  484;    11   X.  Bast.  Rep.  691; 

Pr.  47.  Society  v.  Commonwealth.  53  Pa.  St. 
•  Spillman  v.  Supreme  Council,  167  125;  Gray  v.  Society.  L87  Ma—.  :;j:t. 
Mass.  128;,  81  N.  Bast.  Rep.  776;cit-  5  Blumenthal  v.  Chamber  of  Com- 
ing Grosvenor  v.  Society,  IIS  Mass.  mercc.  7  ('in.  Law  Bull.  ;'>'-'?:  Con- 
78;  Karcher  v.  Supreme  Lodge.  137  nelly  v.  Association,  58 Conn.  552;  20 
Mass.  368;  Burbank   v.    Association.  Atl.  Rep.  671. 


116  MEMBERSHIP. 

rials  of  the  lodge,  the  expelled  memher  omits  to  com- 
plain of  this  mistake,  he  waives  any  right  to  have  the 
error  inquired  into  in  a  court  or  equity.1  But  it  is  cer- 
tainly true,  as  urged  in  the  dissenting  opinion  of  Justices 
Green  and  Trunkey,  in  the  case  just  cited,  that  where 
it  is  evident  from  the  whole  facts  surrounding  the  case 
that  the  exclusion  of  the  witness  took  place,  not  as  a  mis- 
take of  judgment,  but  as  a  part  of  a  plan  to  exclude  the  mem- 
ber from  benefits  to  which  he  was  justly  entitled,  and  in  bad 
faith  toward  the  accused,  then  the  court  should  reinstate  the 
expelled  member.  While  every  presumption  is  in  favor  of  the 
fairness  of  proceedings  in  expulsion,  still  where  a  member's 
judges,  jurors,  accusers  and  debtors,  are  one  and  the  same — 
namely,  the  society  to  which  he  belongs,  mistakes  of  judgment 
upon  the  trial  must  not  be  so  gross  and  inexcusable  as  to  lead 
to  the  conclusion  that  they  were  intentional.  If  they  are,  the 
member  should  be  reinstated.  When  a  member  charged  with 
violating  its  rules  appears  before  the  tribunals  of  a  society 
and  submits  his  case  without  objecting  to  the  mode  of  its 
proceeding,  all  irregularities  of  procedure  are  waived.8  Where, 
under  the  constitution  and  by-laws  of  an  unincorporated 
mutual  benefit  society,  charges  are  preferred  against  a  mem- 
ber who  is  apparently  and  actually  of  unsound  mind,  his 
failure  to  appear  and  answer  is  not  excused  by  his  insanit}-, 
and  the  society  may  regularly  proceed,  according  to  its  laws, 
to  convict  him  of  neglect  to  appear,  and  punish  him  by  expul- 
sion and  the  loss  of  all  rights  in  the  society.  In  considering 
this  question  the  court  said :  "  It  is  claimed  that  Pfeiffer,  be- 
ing apparently  and  actually  of  unsound  mind,  could  not  be  duly 
summoned  or  convicted  of  neglect  to  appear,  and  punished  by 
expulsion  and  the  loss  of  all  rights  in  the  society.  There  is  no 
force  in  this  point.  A  person  who  has  even  been  adjudged  a 
lunatic,  and  of  whom  a  committee,  both  of  person  and  estate, 
has  been  appointed,  may  be  sued  at  law,  and  the  judgment  re- 
covered against  him  is  not  void.  It  would  be  a  contempt  of 
the  court  which  appointed  the  committee  to  sue  without  leave, 
but  the  judgment  is  valid.  There  was  no  reason  why  the 
lodge  should  not  proceed  against  a  person  not  adjudged  a  lu- 

1  Sperry's  Appeal,  116  Pa.  St.  391;       'Pitcher  v.  Board  of  Trade,  121  111. 
9  Atl.  Rep.  478.  412;  13  N.  East.  Rep.  187. 


MP2MBEESHIP. 


117 


natic.  He  could  have  been  defended  and  his  rights  protected. 
If  they  were  not,  the  lodge  might  regularly  proceed  according 
to  its  laws.  His  alleged  insanity  did  not  excuse  his  failure  to 
appear."  '  The  expulsion  of  a  member  of  a  mutual  benefit  so- 
ciety, when  the  tribunal  had  no  jurisdiction  for  want  of  proper 
service  of  a  notice  and  a  copy  of  the  charges  against  him, 
and  while  he  is  insane  and  incapable  of  giving  jurisdiction  by 
consent,  is  void,  and  is  no  bar  to  a  suit  by  the  beneficiary  of  a 
certificate  of  insurance,  issued  by  it.3  Where  an  insane  mem- 
ber appears  before  a  tribunal  of  a  society  trying  him,  and  ad- 
mits the  truth  of  the  matters  charged  against  him,  both  his 
appearance  and  his  admissions  are  void.  One  who  voluntarily 
appears  to  an  action  must  be  able  to  intelligently  comprehend  the 
meaning  of  his  act,  and  an  admission  can  not  bind  one,  unless 
he  has  the  mental  capacity  to  understand  its  force  and  effect. 
Appearance  and  admission  involve  the  element  of  consent;  and 
consent  involves  an  act  of  reason.  When  one  is  bereft  of  rea- 
son, he  can  give  no  consent  to  proceedings  against  him.3 

§  56.  Proper  remedy  for  reinstatement  of  expelled  mem- 
ber.— In  case  of  the  illegal  disfranchisement  of  a  member  of 
an  incorporated  society,  mandamus  is  the  proper  remedy  for 
his  restoration.  This  is  the  settled  modern  rule/  The  dis- 
charge of  a  corporate  duty  is  treated  as  an  office  or  function, 
and  the  corporation  as  a  functionary.  A  corporate  society 
having  been  created,  invested  with  certain  powers,  and  charged 
with  certain  duties  to  be  performed  for  the  benefit  of  its  mem- 
bers and  the  public,  is  not  a  private  individual,  in  the  ordinary 
sense  of  the  word,  so  that  an  action  which  would  l>e  a  sufficient 
remedy  between  individuals  to  enforce  private  rights,  would 

'Pfeiffer  v.  Weishaupt,   13    Daly,       l  Medical  Society  v.  Weatherly,  75 

161.  Ala.  248;  People  v.    Benevolent    So- 

2Hoeffnt>rv.  Grand  Lodge,  41  Mo.  ciety,  3  Hun,  861;  state  v.  Georgia 
App.  859;  Supreme  Lodge  v.  Zulke  Medical  Society,  88  Ga,  608;  People 
139  111.  398;  21  N.  East.  Rep.  789]  v.  Medical  Society,  34  Barb.  570; 
Where  by  statute  an  insane  person  An.^ell  A:  Ames  on  Corp..  Sirs.  704, 
who  is  under  guardianship musl  be  705,698;  state  v.  Chamber  of  Corn- 
sued  by  service  on  his  guardian,  and  merce,  80  Wis.  68;  People  v.  Supreme 
must  defend  by  guardian,  a  judg-  Council,  ION.  V.  Supp.  24*:  Lysaght 
ment  recovered  against  him  in  any  v.  Association,  •">:,  Mo.  App.  .'>:;*. 
other  manner  is  void. 

'Supreme    Lodge    v.    Zuhlke,    129 
111.  298;  21  N.  East.  Rep.  789. 


118  MEMBERSHIP. 

be  a  sufficient  remedy  against  it.  In  one  case  it  "was  said: 
"An  action  to  enforce  the  right  could  not  be  maintained 
against  the  corporation,  because  performance  of  a  corporate 
function  is  not  a  duty  to  be  demanded  by  action;  and  unless 
recourse  could  be  had  to  the  functionary  in  the  first  instance, 
the  relator  might  have  a  cause  for  redress  without  a  remedy." 
A  member  of  an  incorporated  society,  whose  rights  are  with- 
held or  violated  by  the  society,  and  who  is  without  other 
remedy,  is  entitled  to  the  writ  of  mandamus.  When  a  mem- 
ber has  been  expelled  from  a  society,  and  seeks  to  be  restored 
to  membership,  it  is  necessary  for  him  to  show,  both  in  plead- 
ing and  in  evidence,  that  he  was  at  some  time  a  member  of  the 
society.  If  he  shows  that  the  society  at  some  time  recognized 
him  as  a  member,  this  is  sufficient  to  cast  upon  the  society  the 
burden  of  showing  that  it  legally  expelled  him.  In  proceed- 
ings for  reinstatement  of  a  member,  it  as  a  question  of  fact, 
whether  any,  and,  if  any,  what  proceedings  in  expulsion  took 
place  in  the  society,  but  whether  the  expulsion  was  in  accord- 
ance with  the  constitution  and  by-laws  of  the  society  is  a  ques- 
tion of  law  for  the  court  to  determine.1  Where  a  society  is 
proceeded  against  by  a  name  not  inappropriate  as  a  corporate 
designation,  and  the  application  is  resisted  by  it  in  that  name, 
and  no  denial  of  its  corporate  character  is  contained  in  the  pa- 
pers, it  will  be  presumed  that  it  is  in  fact  a  corporation,  and 
that  the  use  of  the  writ  of  mandamus  is  proper.2 

§57.  Mandamus  a  discretionary  writ. — The  issuing  of  a 
peremptory  writ  of  mandmnus  is  discretionary  with  the  court. 
By  this  it  is  not  meant  that  the  court  may  arbitrarily  deny 
the  writ  to  a  person  seeking  restoration  to  membership  in  an 
incorporated  society,  but  it  is  meant  that  a  court,  in  the  exer- 
cise of  a  sound  discretion,  may  deny  the  writ  to  a  person  tech- 
nically entitled  to  it,  where  it  is  apparent  from  the  evidence  in 
the  case  that  the  person  is  not  entitled  in  good  conscience  to 
the  protection  of  the  court,  or  that  reinstatement  to  member- 
ship would  be  useless  to  such  person.  Where  a  member  was 
twice  notified  to  appear  before  a  tribunal  of  the  society  to 
answer  charges,  and  he  appeared   twice,  and  broke  up  the 

1  Osceola  Tribe  v.  Rost,  15  Md.  296;       2  People  v.  Benevolent  Society,  C 
Hutchinson  v.  Lawrence,  67  How.    Hun  361. 
Pr.  38. 


MEMBEKSIIIP.  119 

meetings,  the  court  refused  to  reinstate  him,  where  it  appeared 
that  he  had  been  expelled  at  a  third  meeting  without  notice  to 
him.1  The  court  will  not  order  a  peremptory  writ  to  issue, 
restoring  a  relator  to  membership  in  an  incorporated  society, 
where  it  is  plain  from  the  testimony  that  the  members  thereof 
may  at  once  expel  him  in  the  manner  pointed  out  and  agreed 
upon  in  the  laws  of  the  society.2  The  power  of  expulsion, 
under  the  rules  of  a  society,  existed  only  in  case  of  a  member 
wrongfully  reporting  himself  sick.  A  member  was  expelled 
on  charges  of  disorderly  conduct,  abuse  of  family,  and  calling 
the  chairman  of  the  committee  on  sickness  a  liar.  The  com- 
mittee to  whom  the  charges  were  referred  examined  witnesses 
to  show  that  the  relator  was  drunk,  instead  of  sick,  while  he 
was  drawing  benefits,  and  their  report  treated  this  conduct  as 
coining  within  the  charge.  The  statements  of  the  witnesses 
were  annexed  to  the  charges,  giving  point  to,  and  explaining 
them,  and  the  relator  had  notice  and  opportunity  to  be  heard. 
The  minutes  of  the  meeting  recited  that  he  was  accused  of 
having  wrongfully  drawn  benefits.  Upon  the  trial  witnesses 
were  heard  in  presence  of  the  accused,  and  he  had  opportunity 
to  cross-examine  them.  Upon  these  facts,  the  court  said : 
"  Irregularity  not  sufficient  to  deprive  the  relator  of  the  full 
advantage  of  his  opportunity  to  defend  would  scarcely  war- 
rant a  court,  in  the  exercise  of  its  discretion,  to  interfere  by  a 
peremptory  writ,  since  if  the  objection  be  simply  to  the  irreg- 
ularity of  the  expulsion,  a  restoration  to  membership  would 
Leave  the  relator  liable  to  be  expelled  by  a  subsequent  proceed- 
ing."' The  writ  will  issue  only  to  do  substantial  justice,  vin- 
dicate substantial  right  and  prevent  substantial  wrong,  and 
where  the  relator  admits  that  he  committed  a  wrong  for  which 
he  might  be  lawfully  expelled,  the  court  will  not  order  him  to 
be  restored,  because  he  was  not  properly  notified  of  the  charges 
against  him.* 

§  58.  Delay  in  applying  for  restoration  to  membership. 
— A  member  who  has  been  illegally  expelled  from  a  society 
should  apply  for  reinstatement,  at  once,  if  at  all.     Seeming 

1  State  v.  Portuguese  Society,  15  La.  3State  ex  rel.  Dindorf  v.  Alge- 
Ann.  73.  meiner  Deutcher    Baecker  Gewerbe 

2  State  ex  rel.  Becker  v.  Society,  5  Verein,  3  Cin.  Law  Bull.  295. 
Cin.  Law  Bull.  124;  State  v.  Society,  *  State  v.  Society,  supra. 
42  Mo.  App.  485. 


120  MEMBERSHIP. 

acquiescence  in  his  expulsion  is  of  itself  unfavorable  to  his 
claim  for  restoration;  for  it  is  reasonable  to  suppose  that  he 
will  at  once  move  in  the  direction  of  recovering  his  lost  rights 
and  privileges,  if  he  entertains  a  sense  of  injustice  and  wrong 
when  he  is  expelled.  Where  a  member  for  nineteen  years 
after  he  was  dropped  from  the  roll  of  members  paid  no  dues, 
took  no  interest  in  the  affairs  of  the  society,  and  attended  none 
of  its  meetings,  the  court  refused  to  inquire  into  the  legality 
of  his  expulsion,  and  dismissed  his  application  for  restoration 
to  membership.  Even  arbitrary  and  illegal  expulsion  may  be 
accepted  by  a  member,  and  where  he  neglects  to  prosecute  his 
right  to  restoration  to  membership  for  an  unreasonable  length 
of  time,  the  court  may  properly  refuse  to  interfere  in  his  be- 
half. The  writ  of  mandamus  is  discretionary,  and  may  prop- 
erly be  denied  because  of  such  unreasonable  lapse  of  time.1 
In  one  case 2  the  fact  that  the  member  had  waited  for  six  years 
to  apply  for  restoration  was  commented  upon  unfavorably, 
though  the  case  was  decided  upon  another  point.  In  one 
case 3  the  delay  in  making  application  for  restoration,  and  the 
non-payment  of  dues  to  the  society,  were  accounted  for  by  the 
absence  of  the  member  in  the  army  during  the  war  of  the  re- 
bellion. In  another  case4  the  writ  of  mandamus  was  denied, 
and,  in  giving  the  reasons  for  such  denial,  the  court  said : 
"  Another  consideration  in  the  case  was  that  the  expulsion 
complained  of  occurred  in  1876,  and  the  minutes  showed  that 
when  he  was  expelled  the  relator  left  the  society,  saying  it  was 
'all  right;'  and  it  would  seem,  from  the  fact  of  his  delaying 
so  long  (about  two  years)  to  make  application  for  this  writ, 
that  he  continued  for  a  considerable  space  of  time  to  think  it 
was  all  right."  A  notice  to  one  who  has  been  suspended 
from  membership  that  he  may  be  reinstated  upon  cer- 
tain conditions,  must  be  acted  upon  within  a  reasonable  time, 
and  it  is  a  question  for  the  jury  to  determine  under  all  the  cir- 
cumstances of  the  case  whether  the  application  for  reinstate- 
ment was  made  without  unnecessary  delay.  Even  in  the  case 
of  a  void  expulsion  or  suspension,  the  expelled  or  suspended 

1  Bostwick  v.  Fire   Department,  49  3  Pulford  v.  Fire    Department,    31 

Mich.    513;  14   N.  W.  Rep.  501;  see  Mich.  458. 

g  294.  4  State  v.  Verein,  3  Cin.  Law  Bull. 

'2Bachman  v.  Arbeiter    Bund,   64  295. 
How.  Pr.  442. 


MEMBEKSHIP.  121 

member  is  under  a  duty  to  the  other  members  of  a  mutual 
benefit  society  to  affirm  or  disaffirm  the  act  of  expulsion  or 
suspension  within  a  reasonable  time  and  in  some  distinct  and 
appropriate  manner  under  the  circumstances.  "Where  he  takes 
no  steps  of  any  kind  to  secure  his  reinstatement,  permits  dues 
which  had  accrued  and  were  payable  prior  to  the  date  of  his  ex- 
pulsion to  remain  unpaid,  makes  no  tender  of  such  dues  or  of 
any  subsequently  accruing  and  pays  no  subsequent  assessments 
although  notified  of  them,  he  must  be  taken  to  have  acquiesced 
in  and  consented  to  the  sentence  of  expulsion  or  suspension.1 

'Glardon  v.  Supreme  Lodge,  50  Mo.  App.  45;  see  §  294. 


CHAPTER  IV. 

MEMBERSHIP.— PAET  III. 

§  59.  Return  to  writ  of  mandamus. 

60.  Charges  preferred  against  a  member. 

61.  Notice  of  charges,  notice  of  meeting. 

62.  When  notice  need  not  be  given. 

63.  Sufficiency  of  notice. 

64.  Service  and  proof  of  notice. 

65.  Waiver  of  notice. 

66.  Answering  charges  immediately  when  presented. 

67.  Tribunal  of  society  expelling  a  member. 

68.  Good  faith  in  proceedings  in  expulsion. 

69.  Decree  of  court  reinstating  member  must  be  presented  to  the  society. 

§  59.  Return  to  writ  of  mandamus. — The  return  to  a 
mandamus  to  reinstate  a  member  of  an  incorporated  so- 
ciety must  distinctly  set  forth  all  the  facts  relating  to  the 
expulsion,  in  order  that  the  court  may  judge  of  its  sufficiency, 
both  as  to  the  cause,  and  the  form  of  the  proceedings.  It 
must  show  the  cause  of  the  expulsion,  notice  to  the  person 
expelled,  such  as  will  give  him  an  opportunity  to  be  heard, 
and  such  as  conforms  to  the  provisions  on  the  subject  in  the 
contract  of  membership,  the  assembly  of  a  proper  tribunal, 
the  proceedings  before  them,  a  conviction  of  the  offense,  and 
an  actual  expulsion  by  the  society.1  These  requirements  are 
in  harmony  with  the  well  settled  principle,  that  in  all  cases  of 
special  and  limited  authority,  especially  when  it  is  penal  in 
character  and  to  be  exercised  in  derogation  of  the  common 
law,  great  strictness  and  jealousy  is  to  be  exercised,  not  only 
in  construing  the  law,  but  in  canvassing  the  proceedings. 
Proceedings  to  disfranchise  a  member  must  be  strictly  con- 
strued, for  a  removal  being  an  act  of  an  odious  nature,  all 
clauses  concerning  it  must  receive  a   strict   interpretation.2 

1  Commonwealth  v.  Society,  15  Pa.       2  Rex  v.  Sutton,  10  Mod.  76. 
St.  251. 

(122) 


MEMBERSHIP.  123 

Where  the  charter  expressly  requires  that'  charges  against  a 
member  shall  be  proved  by  two  or  more  credible  witnesses, 
the  return  must  state  specifically  that  the  charges  were  either 
proved  on  oath  by  two  such  witnesses,  or  that  they  were  con- 
fessed.1 And  where  the  charter  expressly  requires  that  a 
charge  against  a  member  shall  be  made  by  certain  officers  of 
the  society,  and  be  signed  by  them,  the  return  must  show  that 
the  charge  was  so  made  and  signed.2  The  facts  must  be  set 
forth  distinctly  and  certainly,  not  argumentatively,  inferen- 
tially,  or  evasively.  A  return  is  insufficient,  which  states  that 
the  relator  was,  according  to  the  constitution  and  by-laws  of 
the  society,  "  tried  and  convicted  of  the  charges,"  without 
showing  that  the  society  took  proofs  which  were  deemed  to 
be  sufficient  evidence  of  the  truth  of  the  charges.3  A  return 
is  insufficient,  which  states  merely  that  the  expelled  member 
was  present  when  the  charge  was  made,  and  did  not  deny  it; 
it  should  appear  that  the  charge  was  proved.4 

§  60.  Return  to  the  writ— Charges  preferred  against  a 
member  of  an  incorporated  society. — Where  the  constitution 
of  an  incorporated  voluntary  society  makes  "  slander  against 
the  society  "  by  a  member  an  offense  for  which  he  may  be  fined 
or  expelled,  it  will  be  held  that  an  offense  something  analogous 
to  the  common  law  offense  of  slander,  as  applicable  to  indi- 
viduals, is  intended;  and,  in  a  proceeding  to  enforce  such  a  pro- 
vision, unless  the  words  charged  to  be  slanderous  are  set  forth, 
it  can  not  be  known  whether  there  is  any  jurisdiction  to.make 
the  inquiry."  If  the  return  to  the  mandamus  states  in  general 
terms  that  the  member  was  expelled  for  violation  of  duty, 
without  specifying  the  charges  on  which  he  was  convicted,  it 
is  bad.8  [Jnder  articles  of  association  providing  for  expelling 
members  "guilty  of  improper  conduct  calculated  to  bring  the 
society  into  disrepute,"  charges  were  preferred  against  a  mem- 
ber: first,  of  receiving  of  an  applicant  for  admission  his  pro- 
posed initiation  fee,  and  failing  to  pay  it  over  to  the  society, 

1  Ang.  &  A.  on  Corp.,  Ch.  29  Sec.  *  Society  v.  Commonwealth,  mprq* 

8;   King  v.  Mayor,  etc.,  5  Mod.  25;  4  King  v.  Faversham,  8  T.  K.  366; 

King    v.    Faversham,   8  T.    R.  856;  People  v.   Society,    65    Barb.  (X.  Y.) 

Will  on  Corp.,  pt.  2,  Sec.   840,  pt.  1,  357. 

Sec.  702.  6  Roehler  v.  Society,  82  Mich.  86. 

8  Society  v.  Commonwealth,  52  Pa.  'Commonwealth  v.  Guardians  61 

St.  125.  the  Poor,  C  Ser.  &  K.  (1'a.i  169. 


1 2-i  MEMBEKSHIP. 

or  to  return  it  to  the  applicant,  who  had  complained  thereof  to 
various  persons;  and,  second,  of  having  been  intrusted  by  the 
secretary  with  the  keys  of  the  society  chest  to  obtain  a  receipt 
book  therefrom,  and  of  having,  at  the  same  time,  and  without 
leave,  taken  from  such  chest  the  original  roll  of  the  society, 
and  refusing  to  return  it.  It  was  held  that  the  above  pro- 
vision covered  cases  of  misconduct  injurious  to  the  society,  and 
damaging  to  the  reputation  of  the  person  charged,  and  that 
the  charges  were  sufficient.1  Where  the  articles  of  incorpora- 
tion authorize  the  expulsion  of  a  member  for  being  concerned  in 
scandalous  or  improper  proceedings,  which  may  injure  the  rep- 
utation of  the  society,  it  is  a  good  cause  of  expulsion,  that  a 
member,  claiming  relief  from  the  society,  had  altered  a  phy- 
sician's bill  from  four  dollars  to  forty,  and  had  presented  that 
bill  to  the  society  as  evidence  of  his  claim.2  In  a  certain  case 
the  charges  were,  first,  indecorous  and  improper  expressions 
respecting  the  board  of  trustees,  in  charging  the  members  of 
the  board  with  being  governed  in  their  official  acts  by  a  spirit 
of  sycophancy;  secondly,  neglect  of  official  duty,  in  not  per- 
forming his  duty  as  one  of  a  committee  of  the  board  of  trustees 
in  relation  to  one  of  its  concerns.  The  court  held  that  though 
the  charges,  if  true,  subjected  the  accused  to  the  censure  of  all 
honorable  men,  they  were  insufficient  as  causes  of  expulsion 
from  the  society,  under  its  inherent  power  of  expulsion.3  The 
charge  that  a  member  of  an  incorporated  society  had  "  assisted 
as  president  of  the  society  in  defrauding  the  society  out  of  the 
sum  of  fifty  cents,"  without  stating  in  what  manner  he  had 
assisted  in  defrauding  the  society,  under  what  circumstances 
of  time  and  place,  and  without  even  stating  that  he  had  de- 
signedly assisted  in  the  alleged  fraud,  is  too  vague  and  general 
to  be  sufficient.  And  the  charge  that  he  had  been  guilty  of 
"  defaming  and  injuring  the  same  in  public  taverns,"  is  equally 
vague  and  indefinite.4 

In  State  v.  Georgia  Medical  Society,6  the  offense  charged 
consisted  in  the  fact  that  the  relator  became  one  of  the  sure- 
ties on  the  official  bond  of  a  colored  citizen  of  his  county,  who 

1  Burton  v.  Society,  28  Mich.  261.  4  Commonwealth  v.  Society,  15  Pa. 

2  Commonwealth  v.  Society,  5  Bin-  St.  251;  Mulroy  v.  Supreme  Lodge, 
ney  486.  28  Mo.  App.  463. 

3  Fuller  v.  Trustees,  6  Conn.  532.  5  38  Ga.  608. 


MEMBERSHIP.  125 

had  been  elected  clerk  of  the  superior  court  of  the  county,  by 
a  majority  of  the  legal  votes  cast  at  the  election  for  that  office, 
and  in  the  further  fact  that  he  became  surety  on  the  bonds  of 
certain  other  colored  citizens  who  were  charged  with  the  of- 
fense of  riot,  for  their  appearance  at  court  to  answer  the  charge 
as  the  law  directs.  Tin-  cha  rge  was  "  ungentlemanly  conduct,'' 
contrary  to  the  by-laws  passed  under  authority  of  the  charter. 
The  court  held  the  offense,  as  charged,  insufficient,  and  said: 
'•  lie  was  expelled  for  doing  that  which  the  law  of  this  state 
not  only  authorizes,  but  encourages.  The  very  fact  that  the 
law  requires  the  clerk  of  the  superior  court  to  give  bond  and 
security  for  the  faithful  discharge  of  his  duties,  is  sufficient  to 
justify  any  citizen  of  the  county  in  becoming  one  of  his  sure- 
tics,  and  protect  him,  in  contemplation  of  law,  from  the  imputa- 
tion of  having  forfeited  his  position  as  a  gentleman  by  so  doing." 
AVhrre  the  rules  of  an  incorporated  society  forbid  a  member 
to  commence  a  suit  at  law  against  another  member  ''except 
the  case  be  of  such  a  nature  as  to  require  and  justify  a  process 
at  law,"  it  is  not  sufficient,  in  a  return  to  a  mandamus,  to 
merely  stale  the  rule,  and  aver  that  the  expelled  member  had 
commenced  a  suit  at  law.  It  should  also  be  averred  that 
the  case  was  not  of  such  a  nature  as  to  require  and  justify 
a  process  at  law.1  The  charter  declared  the  objects  of 
an  association  to  be,  among  other  things,  "to  adjust  con- 
troversies between  its  members,  and  to  establish  just  and 
equitable  principles  in  the  cotton  trade."  and  gave  it  power 
to  make  all  proper, and  needful  by-laws,  not  contrary  to  the 
constitution  and  laws  of  the  State  of  New  Fork,  or  of  the 
United  States,  and  "to  admit  new  members,  and  expel  any 
member  in  such  manner  as  may  be  provided  by  the  by-laws." 
The  by-laws  provided  for  expulsion  for  improper  conduct,  but 
did  not  state  what  should  be  considered  as  such.  There  was 
no  express  <>r  implied  authority  conferred  upon  the  association 
by  its  charter  or  by-laws  to  try  the  title  to  a  seat  in  the 
exchange,  and  to  determine  who  was  the  owner  of  a  right  of 
membership  in  dispute.  A  member  asserted  Ins  ownership  of 
;i  right  to  a  seat  which  had  formerly  belonged  to  an  expelled 
member,  and  the  association  claimed  thai  the  right  of  mem- 
bership had  been  forfeited,  and   was  subject  to  sale  by  it.     A 

1  Green  v.  Society,  1  Ser.  &  R.  (Pa.)  234. 


126  MEMBERSHIP. 

committee  charged  with  the  investigation  of  this  controversy 
decided  adversely  to  the  member's  claim  of  ownership.  He 
then  commenced  an  action  against  the  association,  and 
obtained  an  injunction  restraining  it  from  selling  the  right  of 
membership.  For  this  act  he  was  arraigned  and  expelled. 
The  court  held  that  he  was  not  guilty  of  improper  conduct 
warranting  his  expulsion  for  resorting  to  the  courts  to  prevent 
the  association  from  disposing  of  such  a  right  of  membership ; 
that  he  was  not  acting  in  antagonism  to  the  corporate  power 
of  "adjusting  controversies  between  its  members"  or  of  "es- 
tablishing just  and  equitable  principles  in  the  cotton  trade," 
but  was  asserting  a  right  secured  to  him  by  the  fundamental 
law  of  the  land.1  Where  the  rules  of  a  board  of  brokers  pro- 
vided that  if  any  member  should  refuse  to  comply  with  his 
stock  contracts,  he  should  be  expelled,  it  was  held  not  to  be  a 
sufficient  charge  that  a  member  had  refused  to  comply  with  a 
contract  for  the  sale  of  oil  lands.2  It  is  not  a  proper  cause  for 
expulsion  that  prior  to  the  admission  of  a  person  to  member- 
ship in  a  society,  he  conducted  himself  in  such  a  manner,  and 
performed  such  acts,  as  would  justify  the  expulsion  of  a  mem- 
ber for  breach  of  his  corporate  duty.  Persons  who  are  not 
members  of  a  society  are  not  bound  to  observe  its  laws,  and 
can  not  be  said  to  break  its  laws  by  any  of  their  acts.  Where 
a  physician,  before  he  became  a  member  of  a  medical  society, 
advertised  his  ability  to  effect  cures  in  certain  diseases,  it  was 
held  that,  as  he  was  not  amenable  to  the  laws  of  the  society 
at  the  time  he  procured  these,  advertisements  to  be  published, 
the  society  had  no  jurisdiction  to  try  him  for  the  offense.3  A 
member  of  a  fire  department  failed  to  pay  his  dues  to  the  cor- 
poration for  a  long  period  of  time,  and  the  society  passed  a 
by-law  providing  that  any  one  who  had  been  in  arrears  for 
dues  for  a  certain  length  of  time  should  be  expelled.  The 
member  was  at  once  expelled,  but  the  court  held  the  charge 
insufficient,  and  the  by-law  void,  as  being  in  the  nature  of  an 
ex  post  facto  law.4 

1  People  v.  N.  Y.  Cotton  Exchange,  Y.  188;  In  re  Newell  Smith,  10  Wend. 
8  Hun  216.  447. 

2  Leech  v.  Harris,  2  Brewster  (Pa.)  4Pulford  v.   Fire  Department,  31 
571.  Mich.  458. 

3  People  v.  Medical  Society,  32  N. 


MEMBEESHIP.  127 

A  return  showed  that  the  offense  charged  against  the  mem- 
ber was  a  breach  of  corporate  duty  in  "  illegally  drawing  aid 
as  granted  in  case  of  sickness,"  and  the  minutes  annexed  to 
the  return  and  made  a  part  of  it  established  the  fact  that  the 
only  finding  against  the  member  was  "  that  the  relator  on 
June  16  was  training  his  dog  to  fetch  stones  out  of  the  water; 
that  in  the  afternoon  of  that  day  he  Avent  to  the  Rising  Sun.  and 
appeared  in  the  evening  with  the  Schiller  singing  society,  in 
corpore,  at  a  wedding."  In  deciding  that-  the  return  was 
insufficient,  the  court  said  :  "  Give  to  this  finding  a  liberal 
construction;  does  it  sustain  the  charge,  or  show  a  suffi- 
cient cause  for  disfranchisement  ?  *  *  We  think  not.  The 
relator  may  have  been  a  very  sick  man,  and  yet  occupied  and 
enjoyed  himself  as  above  specified.  If  he  has  feigned  sickness, 
or  deceitfully  drawn  relief,  then  he  has  committed  a  wrong 
against  the  fundamental  objects  of  the  corporation,  an  offense 
against  his  duty  as  a  corporator.  The  fact,  however,  must  be 
stated  as  found  after  a  formal  investigation,  and  must  not  rest 
on  an  inference  alone.  The  charge  here  is  a  grave  one,  but 
the  finding  is  so  indefinite  as  to  render  it  impossible  to  say  that 
the  finding  sustains  the  charge."  ' 

§  61.  Return  to  the  writ — Notice  of  charges — Opportu- 
nity to  be  heard — Notice  of  meeting. — It  may  be  stated,  as 
the  general  rule,  that  a  society,  the  members  of  which  become 
entitled  to  privileges  or  rights  of  property  therein,  may  not 
exercise  its  power  of  expulsion  without  notice  to  the  member, 
or  without  giving  him  an  opportunity  to  be  heard.  It  is  a 
fundamental  principle  of  law,  recognized  in  every  court  of  jus- 
tice, that  no  man  shall  be  condemned  or  prejudiced  in  his 
rights,  without  an  opportunity  to  be  heard.  A  society,  or  se- 
lect number  of  its  members,  to  whom  authority  is  given  in 
the  premises,  is  a  court  when  passing  on  the  rights  of  its  mem- 
bers. Audi  alteram  'partem  is  the  first  principle  in  the  admin- 
istration of  justice,  and  it  is  against  natural  justice  to  proceed 
against  one's  rights  without  giving  him  an  opportunity  to  be 
heard  in  defense  of  them."     It   is   competent   for   the  mem- 

1  Schweiger  v.  Society,  13  Phila.  Muck.  62  How.  Pr.  (N.  Y.)69;  Loubat 
113.  v.  LeRoy,  40  Hun  (N.  Y.)  543;    Su- 

2  People  v.  Benevolent  Society,  3  preme  Lodge  v.  Zuhlke,  I'.'.i  111.  298; 
Hun  361;  Delacyv.  Neuse  River  Nav.  31N.  East.  Rep.  789;  O'Hara  v.  Stack, 
Co.,  1  Hawks  (11  IT.  C.)  274;  Fritz  v.  90  Pa.  St.  477;  Willis  v.  Cluld,   13 


128  MEMBERSHIP. 

bers  of  a  society  organized  for  the  purpose  of  mutual  insur- 
ance, to  agree  that  the  non-payment  of  an  assessment  levied 
by  it,  within  a  stipulated  period  of  time  after  notice  of  the  as- 
sessment, shall  ipso  facto  operate  as  an  expulsion  of  a  delin- 
quent member  from  the  society.  Such  an  expulsion  is  in  real- 
ity a  forfeiture  of  rights  for  a  cause  over  which  the  member 
has  full  control,  and  for  a  cause  which  imputes  to  the  member 
no  disgraceful  conduct.'  But  it  is  a  well  established  rule  of 
law  that  no  man  shall  be  condemned  to  suffer  the  consequences 
resulting  from  alleged  misconduct,  until  he  has  been  notified 
of  the  accusation,  and  been  given  an  opportunity  to  make  his 
defense.  This  rule  is  not  confined  to  the  conduct  of  strictly 
legal  tribunals,  but  is  applicable  to  every  tribunal,  or  body  of 
persons  invested  with  authority  to  adjudicate  upon  matters  in- 
volving civil  consequences  to  individuals.  A  by-law  providing 
that  a  member  may  be  expelled  for  any  alleged  misconduct, 
without  notice  to  him,  and  without  affording  him  an  oppor- 
tunity to  be  heard,  is  in  conflict  with  the  law  of  the  land,  and 
is  void.2  In  Manning  v.  San  Antonio  club,3  it  was  held  that, 
in  the  absence  of  a  by-law  of  an  incorporated  club,  requiring 
the  member  to  be  notified  of  the  charges  against  him  and  the 
meeting  at  which  he  was  to  be  tried,  the  action  of  the  direct- 
ors in  expelling  a  member  without  notice  to  him,  would  not 
be  annulled  by  the  court.  Upon  this  subject  the  court  said  : 
"It  is  true,  that  in  most,  perhaps  all,  of  the  cases  which  occur 
in  the  books,  notice  to  the  party  is  treated  as  necessary  to  the 
validity  of  the  proceedings.  But  it  is  also  true  that  most,  or 
all,  of  these  cases  involve  rights  of  such  a  character  as  are 
recognized  and  protected  by  the  law  of  the  land,  or  else  the 
articles  of  association  provide  for  notice  to  the  party  and  some 
method  of  trial."  In  basing  the  decision  in  this  case  upon  this 
opinion,  the  court  seems  to  have  forgotten  that  the  first  point 
decided  in  the  case  was  that  membership  in  an  incorporated 
society  is  a  valuable  right  which  the  court  will  protect,  re- 
gardless of  the  question  of  property. 

The  bv-laws  of  a  mutual  benefit  society  provided  that  each  ap- 

Beav.  117;  Hutchinson  v.  Lawrence,  190;  Fritz  v.  Muck,  62  How.  Pr.  (N. 

67  How.  Pr.  47.  Y.)  69;  Wachtel  v.  Society,  84  N.  Y. 

1  See  §  285  et  seq.  28;  compare  dictum  in  People  v.  So- 

4  Supreme  Lodge  v.  Zuhlke,  sxipra;  ciety,  24  How.  Pr.  on  p.  221. 

Wood  v.  Woad  et  al.,  L.  R.,  9  Exch.  3  63  Texas  166. 


MEIFBEESHIP.  129 

plicant  for  membership  should  be  a  member  in  good  standing 
of  a  lodge  of  Odd  Fellows,  and  that,  if  he  were  dropped  or 
expelled  from  his  lodge,  his  membership  should  cease,  and  the 
society  should  not  be  bound  to  his  beneficiary.  The  by-laws 
of  the  Odd  Fellows  lodjje  to  which  a  member  of  such  mutual 
benefit  society  belonged,  provided  that  notice  should  be  issued 
by  the  secretary  to  members  in  arrears  for  dues,  and  that  if  the 
dues  were  not  paid  within  four  weeks  from  the  date  of  notice, 
the  delinquent  should  be  dropped.  It  was  held  that  it  was 
not  sufficient  to  cause  the  forfeiture  of  his  rights  in  the  mutual 
benefit  society  that  the  books  of  his  lodge  contained  an  entry 
that  he  had  been  dropped,  in  the  absense  of  the  evidence  that 
he  had  received  the  required  notice..1  A  return  to  a  manda- 
m  us  to  restore  an  expelled  member,  which  states  that  the  ex- 
pelled member  was  heard  in  his  defense,  is  sufficient,  without 
stating  that  he  was  summoned  to  appear.2  Although  the  rules 
of  the  society  do  not  provide  that  notice  of  the  charges  against 
a  member,  and  of  the  meeting  at  which  he  will  be  tried,  shall 
be  given  to  him,  he  should  have  such  notice  and  be  given  an 
opportunity  to  be  heard  in  his  own  defense. 

.^  62.  Exceptions  to  the  rule  that  notice  must  he  given. 
— AVhere  a  member  of  the  society  has  been  tried  in  a  court  of 
the  land,  found  and  adjudged  guilty  of  an  infamous  crime,  and 
the  judgment  of  the  court  has  been  sustained  in  the  highest 
court  of  appeals  in  the  state,  it  is  apprehended  that  an  expul- 
sion from  the  society,  without  notice,  or  perferment  of  specific 
charges,  would  be  valid  and  binding.  In  such  a  case  it  is  to 
be  presumed  that  the  member  had  a  fair  and  impartial  trial  in 
court,  and  the  judgment  of  the  court  being  conclusive  against 
the  memb  ir  as  to  his  guilt,  may  well  be  accepted  by  the  so- 
ciety as  a  sumei<mt  determination  of  his  unfitness  for  contin- 
ued membership.  A  resolution  at  a  proper  meeting,  declaring 
his  rights  of  membership  forfeited  because  of  his  conviction 
in  court  of  the  crime,  would  doubtless  be  a  valid  expulsion. 
Under  a  provision  of  the  constitution  of  the  grand  or  supreuib 
body  of  a  mutual  benefit  society,  guaranteeing  a  fair  hearing 
to  every  member  before  expulsion,  except  when  such  member 
has  been  expelled  from  a  subordinate  lodge  of  the  society,  of 

1  Odd  Fellows  Association  v.  Hook,  'King  v.  Mayor.  5  Modern  Rep'ta 
10  Cin.  Law  Bull.  391.  857;  2  Salkeld'a  I;,  p'ta  428. 

9 


130  MEMBERSHIP. 

which  he  was  a  member,  it  is  competent  for  the  grand  or  su- 
preme body  to  expel,  without  notice,  a  member  who  has  been 
expelled  by  the  subordinate  lodge.1  Where  a  member  was 
twice  cited  to  appear  and  stand  his  trial  before  a  tribunal  of 
the  society,  and  appeared  each  time,  and,  by  ruffianism  and 
violence,  broke  up  the  meeting  and  prevented  a  sentence,  the 
court  refused  to  exercise  its  equitable  powers  to  restore  him  to 
membership,  where  it  appeared  that  at  a  third  meeting  he  was 
expelled  without  notice  to  him.2 

§  63.  Sufficiency  of  notice. — Waiver  of  sufficiency.— In 
giving  notice  of  charges  against  a  member  and  of  a  meeting 
called  to  consider  his  expulsion,  the  rules  of  the  society  must 
be  strictly  followed.  One  of  the  by-laws  of  a  society  provided, 
among  other  things,  that  special  meetings  of  the  society 
might  be  convened  as  the  president  should  deem  necessary,  or 
upon  the  requisition  of  any  three  members  of  the  society,  the 
notices  of  which  special  meetings  should  specify  the  business  to 
be  brought  forward,  and  that  no  business  should  be  introduced 
at  any  special  meeting,  in  addition  to  that  specified  in  the 
notice.  The  plaintiff,  as  one  of  the  members  of  the  society, 
having  acted  in  such  a  manner  as,  in  the  opinion  of  the  presi- 
dent, merited  his  dismissal  or  expulsion  from  the  body,  a  meet- 
ing for  that  purpose  was  ordered  to  be  convened  by  the  presi- 
dent, and  notices  were  accordingly  sent  to  all  the  members  of 
the  society,  stating  that  a  meeting  would  be  held  "  for  special 
business,"  but  omitting  to  say  what  such  special  business  was. 
At  a  meeting  so  called,  at  which  the  plaintiff  was  present,  a 
resolution  was  unanimously  adopted  by  the  other  members 
present,  expelling  him  from  the  society.  The  notice  calling 
such  meeting  being  invalid,  because  it  did  not  specify  the  busi- 
ness intended  to  be  brought  before  the  society,  the  court  held 
that  the  resolution  of  expulsion  had  been  illegally  and  im- 
properly passed.  The  fact  that  the  plaintiff  had  attended  a 
meeting  illegally  called,  and  had  entered  upon  a  defense  before 
the  society,  did  not  preclude  him  from  afterward  filing  a  bill 

1  Pfeiffer    v.    Mt.  Horeb  Encamp-  reinstate    the  member   for  want  of 

ment,  13  Daly  161.  notice,   when  he  admitted  that  he 

9  State  v.  Portuguese  Society,  15  La.  had  committed  an  offense  for  which 

Ann.  73;  see   State  v.  Society,  42  Mo.  he  might  be  expelled. 
App.  485,  where  the  court  refused  to 


membership;  131 

impeaching  the  proceedings  as  irregular  and  invalid.1  "Where  a 
by-law  required  two  weeks*  notice  of  a  meeting  to  be  given, 
in  was  held  that  a  notice  posted  at  3  o'clock  a.  m.  on  the  1st  of 
the  month  for  a  meeting  to  be  held  on  the  14th,  was  insuffi- 
cient.2 In  discussing  whether  the  fact  that  the  accused  mem- 
ber was  present  and  addressed  the  society  was  a  waiver  of  the 
sufficiency  of  the  notice,  t  lie  court,  in  this  case,  said:  "In  the 
next  place,  the  general  nueiing  was  not  properly  called.  On 
the  other  hand,  it  has  been  said  that  Mr.  Labouchere attended 
that  meeting,  and  entered  into  the  discussion  ;  that  he  did 
not  protest  against  the  meeting  having  been  irregularly 
called;  and  that,  therefore,  he  has  no  right  now  to  com- 
plain; but  on  the  other  hand,  Mr.  Labouchere  said  he  did 
protest,  though  it  does  not  appear  what  the  protest  was. 
Mr.  Labouchere  was  not  compelled  to  say  what  it  was. 
A  man  might  say.  'I  have  a  good  defense  apon  the  mer- 
its. I  contend  that  1  ought  not  to  be  expelled;  therefore, 
I  am  not  going  to  run  away  by  availing  myself  of  a  technical 
objection.'  lie  was  entitled  to  say, 'Though  the  meeting 
was  irregularly  called,  I  have  such  a  good  case  on  the  merits, 
that  I  should  like  to  take  your  opinion.'  But  he  was  not 
bound  to  tell  the  meeting  that  it  was  irregularly  or  improperly 
called."  The  by-laws  of  a  society  provided  that  notice  of  a 
meeting  for  the  expulsion  of  a  member  must  be  given.  It 
was  held  that  a  notice  of  "  a  meeting  to  take  into  consideration 
the  conduct  of  a   member,"  was  not   a  compliance  with  such 

provision;    that   it  should    have   stated    distinctly  what  was  the 

object  of  the  meeting.'  By  the  >\<-n\  of  settlement  of  a  Baptist 
chapel,  it  was  provided  that  the  minister  should  be  liable  to 
be  removed  by  the  direction  of  the  church,  declared  at  one 
meeting,  and  confirmed  at  a  second  meeting;  that  all  direc- 
tions of  the  church  should  he  declared  by  a  majority  of  com- 
municants present  at  a  meeting  Of  which  notice  should  have 
been.given  in  the  chapel  during  divine  Bervioe  on  Sunday 
morning  at  least  four  days  previously;  also  that  whenever 
the  church  should  have  to  consider   the   appointment  ordis- 

■Marshv.  Huron  College,  27  Grant's  'Cannon     v.    Toronto    Corn    Ex- 

Chan.  Rep'ts  (Upper  Canada)  605.  change,  27  Grant's  Chan.  Rep'ts  (Up- 

'  Labouchere  v.  Wharncliffe,L.  R.,  per  Canada)  28. 

13  Ch.  Div.  346. 


132  MEMBERSHIP. 

missal  of  a  minister,  the  notice  should  expressly  state  the 
object  of  such  meeting,  and  each  of  the  directions  to  be  declared 
at  any  such  meeting  should  be  reconsidered  at  a  second  meet- 
ing to  be  convened  by  public  notice  to  be  given  in  manner 
aforesaid,  expressly  stating  the  object  thereof.  On  Sunday, 
the  18th  of  October,  a  notice  was  read  in  the  chapel  to  the 
effect  that  a  meeting  would  be  held  on  the  following  Saturday 
"  for  the  purpose  of  bringing  charges  against  and  considering 
the  dismissal  of  "  the  then  minister.  On  the  21th  of  October 
the  meeting  was  held  and  a  resolution  was  passed  that,  in  con- 
sequence of  certain  offenses  alleged  to  have  been  committed 
by  the  minister,  "  he  is  not  a  fit  and  proper  person  to  occupy 
the  position  of  pastor;  and  that  his  office  as  pastor  cease  forth- 
with." On  Sunday,  the  25th  of  October,  a  notice  was  read 
in  the  chapel  to  the  effect  that  a  meeting  would  be  held  on 
the  following  Saturday  "  for  the  purpose  of  confirming  and 
ratifying  "  the  resolutions  passed  at  the  meeting  of  the  21th  ; 
and  on  the  31st  of  October  the  meeting  was  held,  and  a  reso- 
lution passed  that  the  minutes  of  the  meeting  of  the  21th  be 
"  passed,  confirmed  and  ratified." 

It  was  held  that  the  notice  of  the  25th  of  October  was  invalid 
in  law,  because  it  did  not  specify  the  resolutions,  of  the  intended 
confirmation  of  which  it  gave  notice;  and  hence  that  the  res- 
olution of  the  31st  of  October,  and  the  dismissal  of  the  min- 
ister, purported  to  have  been  thereby  effected,  were  also  in- 
valid.1 Where,  by  the  laws  of  the  society,  it  is  necessary  that 
notice  shall  be  given  to  the  society  of  the  object  of  the  pro- 
posed meeting,  the  proceedings  of  a  meeting  expelling  a  mem- 
ber, held  pursuant  to  a  notice  which  omitted  to  state  the 
object  of  the  meeting,  are  void  under  the  positive  provisions 
of  its  laws,  because  of  such  omission.8  Where  the  by-laws  of 
a  society  provide  for  special  meetings  of  its  board  of  directors 
on  notice  in  writing  to  each  director,  and  authorize  the  expul- 
sion of  a  member  at  a  special  meeting,  the  board  has  no  juris- 
diction to  expel  a  member  at  a  special  meeting  of  which  one 
of  the  directors  did  not  receive  written  notice,  and  at  which 
he  was  not  present.  One  director  may  be  able  to  influence 
the  minds  of  several  others  as  to  the  propriety  of  the  contem- 
plated action  of  the  board,  and  the  accused  member  has  a 

1  Dean  v.  Bennett,  L.  R.,  9  Eq.  625.      *  Weber  v.  Zimmerman,  22  Md.  156. 


MEMBERSHIP.  3  33 

right  to  have  the  notice  given  to  each  one,  so  that  he  may 
have  the  benefit  of  the  influence  of  any  one  of  them  in  their 
deliberations.' 

Where  notice  of  a  special  meeting  of  the  board  is  required 
to  be  given  to  each  director,  and  no  provision  is  made  as  to 
the  manner  of  service,  the  service  must  be  personal,  as  re- 
quired at  common  law.1 

Independent  of  the  positive  provisions  of  the  laws  of  a  society, 
in  order  properly  to  exercise  the  right  of  expulsion  of  a  cor- 
porator, notice  must  be  given  to  all  the  members  of  the  tribunal 
before  which  he  is  to  be  tried,  that  it  is  intended  to  consider 
the  question  of  removing  the  particular  person.  "Where  the 
power  of  expulsion  is  in  the  society  at  large,  notice  must  be 
given  to  all  the  members  of  the  society;  and  when  the  power 
is  in  a  select  body,  each  member  of  such  body  must  be  notified.3 
In  giving  notice  of  a  meeting,  it  is  not,  generally,  necessary  to 
state  what  business  is  to  be  transacted,  when  it  relates  only  to 
the  ordinary  affairs  of  the  corporation;  but  when  it  is  for  the 
purpose  of  expelling  a  member,  that  fact  should  be  stated;  for 
members  who  might  think  that  their  attendance  was  unneces- 
sary for  the  usual  routine  of  business,  will,  perhaps,  feel  it 
their  duty  to  attend  a  matter  involving  the  rights  of  a  fellow 
member.  The  notice  should  be  given  in  the  manner  pre- 
scribed by  the  charter  or  by-laws,  or,  in  the  absence  of  any 
such  provisions,  by  personal  notice  to  the  members  of  the 
tribunal.  When  it  is  intended  to  expel  a  member,  it  is,  in 
general,  absolutely  necessary,  not  only  that  he  should  be  sum- 
moned generally  to  attend,  but  that  he  should  also  be  notili<<l 
to  answer  the  particular  charges  alleged  against  him;  for  it 
would  be  highly  unjust,  upon  a  general  summons,  to  expel  ;i 
member  for  a  particular  offense,  when  he  has  had  no  notice  to 
prepare  his  answer  to  the  charge.4  It  is  only  necessary  that 
the  notice  shall  be  sufficient  to  apprise  the  accused  of  the 

1  People  v.   Association,  18  N.  Y.  2  Ld.  Raym.  1355:  Wiggin  v.  Baptist 

Supp.  491.  Church.  8  Met  (Mass.i  812;  Stow  v. 

■'  People  v.  Club,  14  N.  Y.  Supp.  76.  Wyse,  7  Conn.  214;  2  Bacon's  Abridg. 

3  For  law  to  prevent   surprise  and  462-463. 

fraud   in  election   and  expulsion,  see  4  Simmons   v.    Society,    10   N.    Y. 

Rex  v.  May  and  Rex  v.  Little,  5  Burr.  Supp.  293;  Waebtel  v.  Society.  84  N. 

20*2;    Kynaston    v.    Mayor,   etc.,    2  Y.  28:   Loubat   v.  Le    Roy,    40    Hun 

Strange  1051;  Machellv.  Mayor,  etc.,  552;  People  v.  Union,  47  Hun  273. 


134  MEMBEKSHIP. 

nature  and  extent  of  the  charge  against  him.1  It  is  too  late  to 
question  the  sufficiency  of  the  notice  to  appear  and  answer  the 
charge,  after  the  party  has  appeared  in  person,  proceeded  with 
the  investigation,  and  made  no  pretense  that  he  had  not  had 
time  to  prepare  for  trial."  If  a  person  chooses  to  belong  to  a 
society  which  holds  its  regular  meetings  on  Sunday,  and,  at  such 
a  meeting,  he  is  served  with  a  notice  to  attend  the  next  meeting, 
it  does  not  rest  with  him  to  make  the  objection  that  such  notice 
is  illegal  because  it  was  served  on  Sunday/  Where  the  con- 
tract of  membership  provides  that  a  copy  of  the  charges  against 
a  member  shall  be  served  on  him,  he  may  refuse  to  answer  the 
charges  if  a  copy  has  not  been  so  served.4 

§  64.  Service  and  proof  of  notice.5 — Where  it  is  pro- 
vided in  the  by-laws  that  no  expulsion  shall  be  made,  ex- 
cept on  charges  preferred,  a  cop}7  of  which  shall  be  served 
upon  the  member  so  charged,  the  serving  of  the  charges 
upon  the  accused  is  a  substantial  jurisdictional  provision, 
and  the  omission  to  make  proper  service  will  render  his 
expulsion  void  unless  it  is  obviated  in  some  manner/  A 
by-law  of  a  religious  society  provided  as  follows  :  "  Any  mem- 
ber who  shall  either  cease  to  regularly  worship  with  the 
society,  or  who  shall  fail  to  contribute  to  the  support  of  its 
public  worship  for  the  term  of  one  year,  shall  have  his  or  her 
name  dropped  from  the  list  of  members."  It  was  held  that  a 
member  could  be  deprived  of  his  membership  only  by  a  vote 
of  the  society,  after  notice,  and  opportunity  to  be  heard.'  In 
the  absence  of  any  agreement  by  the  member,  or  any  provis- 
ion in  the  charter  or  by-laws,  for  a  different  mode  of  service, 
it  should  be  made  personally,  as  required  at  common  law, 
where  the  object  is  to  deprive  a  party  of  his  rights,  or  prop- 
erty; or,  if  that  can  be  dispensed  with,  then  in   such   other 

'  Gardner  v.  Freeinantle,  19  W.  R.  5  §  257  et  seq. 

256.  6  People  v.  Protective  Union,  118 

2  Chase  v.  Cheney,  58  111.  509.  N.  Y.  101;  23  N.  East  Rep.   129  ;  af- 

3Corrigan  v.  Society,  65  Barb.  357.  firming  42  Hun  656;   see  People  v. 

4  Supreme     Lodge  v.    Zuhlke,   129  Union,  47  Hun  273. 

111.  298;  21  N.  East.  Rep.  789;  People  ^ray  v.   Christian    Society,    137 

v.     Musical    Union,    47     Hun    273;  Mass.   329;    see    Commonwealth    v. 

People  v.  Protective  Union,   118  N.  Pennsylvania  Beneficial  Institution, 

Y.  101;  23  N.  East.  Rep.  129;  affirm-  2  Ser.  &  R.  (Pa.)  141. 
ins  42  Hun  656. 


MEMBERSHIP.  135 

mode  as  will  be  most  likely  to  effect  its  object.1  "Where  a 
party  is  entitled  to  notice,  and  has  not  stipulated  to  have  it 
transmitted  by  mail  or  otherwise,  he  is  not  bound  by  any 
notice  until  it  has  actually  been  received.3  Unless  some 
special  mode  or  form  of  notice  be  required  b\r  the  charter,  or 
by-lawSj  personal  notice  will  be  sufficient.3  The  constitution 
of  a  club  gave  power  to  the  board  of  governors  to  censure, 
suspend,  or  expel  members  for  misconduct,  but  provided  that 
no  such  penalty  should  be  enforced  until  after  ten  days'  notice 
in  writing  had  been  given  to  the  member.  It  was  held  that, 
in  the  absence  of  any  agreement  or  provision  to  the  contrary, 
personal  notice  was  required ;  and  a  notice  sent  by  mail, 
which,  in  due  course,  would  have  been  delivered  at  the  mem- 
ber's address  ten  days  previous  to  the  proposed  action,  but 
which  was  not  received  by  him  personally  until  nine  days 
previous  thereto,  was  insufficient.4  Notice  of  charges  against  a 
member  is  not  sufficiently  proved  by  the  testimony  of  a  witness, 
that  he  served  on  the  accused  member  a  written  notice  to  appear 
at  a  particular  time,  where  he  also  testifies  that  he  can  not  say 
what  the  notice  was,  as  he  handed  it  to  the  accused  without 
reading  it  to  him,  and  it  was  written  by  an  officer  of  the 
society,  who  is  not  examined.5  Where  a  firm  is  a  member  of 
a  chamber  of  commerce,  and  each  member  of  the  firm  has  the 
rights  of  members  of  the  chamber,  notice  of  the  charges  of 
unmercantile  conduct  against  any  member  of  the  firm,  may  lie 
properly  given  to  the  firm  itself.6 

§  65.  Waiver  of  notice. — In  one  case,7  it  is  said  that  if  the 
accused  member  is  present  when  the  subject  of  his  expulsion 
is  taken  up,  and  is  willing  to  enter  into  the  inquiry  immedi- 
ately, 1  here  is  no  occasion  for  further  notice.  Wilcox  on  Munic- 
ipal Corporations  at  page  265  lays  it  down  as  the  rule,  that 
when  the  accused  has  appeared  at  the  meeting,  and  either  de- 

1  Wachtel  v.  Society,  84  N.  Y.  28.  6  Downing    v.    St.    Columba's    So- 

2Durhans  v.  Corey.    1?  Mich.  282;  ciety,  10  Daly  262.     Proof  of  service 

Castner  v.  Farmers'  Mutual,  50  Midi,  orgivingof  notice  involves  proof  <>t' 

27:'..  its  contents.       Supreme     Lodge     v. 

8Jonesv.  Sisson,6Gray  288;  York  Johnson,  7s  ind.  110. 

Co.  Mut.  v.  Knight,  18  Mr.  75;  Will-  8Blumenthal  v.  Chamber  of  Com- 

iams  v.  German   Mutual.  68  111.  :'>*7.  merce,  7  Cin.  Law  Bull.  :'>'J7. 

4People  v.  Hoboken  Turtle  Club,  'Commonwealth  v.  Beneficial  In- 

14  N.  Y.  S.  7G.  stitution,  2  Ser.  &  R.  (Pa.)  141. 


136  MEMBERSHIP. 

fends  himself,  or  answers  or  confesses  the  charge  against  him, 
he  thereby  waives  his  right  to  notice.  In  Downing  v.  St. 
Columba's  Society,1  it  is  said :  "  It  has  been  decided  that 
though  a  member  attends,  and  enters  upon  his  defense,  he 
does  not  waive  his  right  to  a  notice  of  the  charges."  The 
reason  suggested  for  such  a  rule  is,  that  if  a  member  be  not 
apprised  of  the  charges,  he  will  have  no  opportunity  to  bring 
witnesses  in  his  behalf.  It  is  undoubtedly  true  that,  if  a  mem- 
ber appears  at  a  meeting  where  charges  against  him  are  taken 
up  for  hearing,  and  declares  that  he  has  had  no  notice  of  the 
charges,  and  that  he  is  unwilling  to  proceed  with  the  investi- 
gation, he  does  not  waive  his  right  to  a  notice  of  the  charges 
by  entering  upon  his  defense.  By  his  protest  he  saves  his 
right  to  question  the  jurisdiction  of  the  society  over  his  per- 
son. But  if  he,  without  qualification,  submits  himself  to  the 
jurisdiction  of  the  society,  he  undoubtedly  waives  his  right  to 
notice.  The  authorities  cited  by  the  court  in  Downing  v.  St. 
Columba's  Society,  suj)ra,  do  not  sustain  the  proposition  therein 
laid  down.  They  are  to  this  effect :  Where  the  contract 
of  membership  provides  that,  when  charges  are  preferred 
against  a  member,  notice  of  the  meeting  at  which  they  shall 
be  considered  shall  be  given  in  a  certain  manner  to  the  mem- 
bers of  the  society,  the  fact  that  the  accused  member  attends 
a  meeting  of  which  proper  notice  has  not  been  given,  and  en- 
ters upon  his  defense  before  the  society,  does  not  preclude  him 
from  afterward  filing  a  bill  impeaching  the  proceedings  at 
that  meeting  as  irregular  and  invalid  for  want  of  proper 
notice.  As  the  society,  in  proceedings  of  expulsion,  acts  as  a 
court  of  limited  and  special  jurisdiction,  it  is  necessary,  in  or- 
der that  it  may  obtain  jurisdiction  of  the  subject-matter,  that 
all  the  steps  required,  under  the  contract  of  membership,  be 
taken.  By  an  appearance  at  the  investigation,  the  accused 
member  neither  confers  jurisdiction  of  the  subject-matter  upon 
the  society  nor  admits  such  jurisdiction  to  be  in  it.  The  so- 
ciety must,  by  its  own  acts,  in  accordance  with  the  contract  of 
membership,  acquire  jurisdiction  of  the  subject-matter.  But 
it  may  acquire  jurisdiction  of  his  person  by  serving  the  re- 
quired notice  upon  him,  or  it  may  acquire  it  by  the  consent 
and  act  of  the  accused  member,  in  submitting  himself  to  its 
jurisdiction. 

1 10  Daly  (N.  Y.)  262. 


MEMBERSHIP.  137 

"Where  the  by-laws  provide  that  the  accused  shall  be  served 
with  a  copy  of  the  charges  made  against  him,  he  may  waive 
such  service  by  submitting  himself  to  the  jurisdiction  of  the 
tribunal.  This  a  party  may  do  before  any  tribunal  having 
jurisdiction  of  the  subject-matter  involved.  But  where  the 
accused,  in  answer  to  a  summons  to  attend  a  meeting  on  a 
certain  day  to  answer  why  he  should  not  be  expelled,  appeared 
and  denied  the  jurisdiction,  because  no  copy  of  the  charges 
had  been  served  on  him,  and  because  the  member  making 
the  charges  did  not  appear  personally  against  him,  as  required 
by  the  by-laws,  it  was  held  that  he  had  not  submitted  himself 
to  the  jurisdiction  of  the  tribunal  for  the  purposes  of  the  pro- 
ceeding.1 "Where  a  member,  against  whom  charges  have  been 
made,  voluntarily  attends  the  meeting  at  which  the  charges 
are  heard,  and  defends  himself  on  the  merits,  he  thereby  waives 
the  requirement  of  the  by-laws  that  he  should  be  served  with 
a  certain  notice  and  a  copy  of  the  charges,  and  he  can  not  raise 
the  point  after  an  order  of  expulsion  has  been  entered  against 
him.2 

^  66.  Answering  charges  at  same  meeting  at  which  they 
are  presented. — Sergeant  "Whitaker's  case3  is  sometimes  quoted 
as  authority  for  the  statement  that  it  is  very  doubtful  whether 
a  member  waives  his  right  to  notice  by  appearing  to,  and 
answering  charges  at  the  same  meeting  at  which  the  charges 
are  presented.  But  Kyd  on  Corporations,  on  page  447,  savs 
of  that  case :  "  It  is  not  easy  to  reconcile  the  event  of  the  case 
with  what  is  reported  to  have  been  said  by  the  chief  justice 
and  the  court,  i  that  the  sergeant  appearing,  and  being  charged 
and  answering,  supplied  the  want  of  notice,  both  of  the  time 
and  of  the  offense,'  and  'that  he  might  waive  the  notice  if  he 
would.'  The  ground  on  which  the  peremptory  mandamus 
was  awarded  was  that  one  offense  was  specified  in  the  notice, 
and  that  he  was  charged  with  another  when  he  appeared:  how 
is  this  to  be  reconciled  with  the  proposition  '  that  appearing 
and  answering  supplied  the  want  of  notice  of  the  offense'? 
That  a  man  may  waive  anything  which  the  law  has  intended 

'People  v.  Protective  Union,    118  2  People  v.   Association,  24  N.    Y. 

N.  Y.   101;    23   N.    East.    Rep.    129;  Supp.  114;  4  Misc.  Rep.  424. 

affirming    42    Hun   656;   People  v.  B  %  Ld.  Raymond,  1240;  2  8alkeld's 

Musical  Union,  47  Hun  273.  Rep'ts  435. 


138  MEMBERSHIP. 

for  his  benefit  is  a  general  proposition  which  can  not  be  denied; 
and  as  previous  notice  of  an  offense  charged  against  a  party  is 
given  him  only  that  he  may  come  prepared  to  defend  himself, 
he  may,  no  doubt,  dispense  with  it.  But  if  he  be  present  acci- 
dentally at  a  meeting,  and  answer  immediately,  or  be  unable 
to  give  an  answer  to  a  charge  made  against  him,  of  which  he 
had  no  previous  notice,  is  it  from  thence  to  be  concluded  that 
he  'waives  the  necessity  of  such  notice?  I  apprehend  that 
nothing  less  would  cure  the  want  of  notice  than  an  express 
declaration  of  the  party,  that  he  consented  to  answer  without 
it."  ' 

§  67.  Tribunal  of  the  society  expelling  a  member.— The 
power  of  expulsion  must  belong  to  the  society  at  large,  unless, 
by  the  fundamental  articles,  or  some  by-law  founded  on  these 
articles,  it  is  transferred  to  select  a  number.2  A  return  to  a 
mandam  us,  which  states  that  the  member  was  tried  and  expelled 
by  a  select  number  of  the  society,  is  insufficient  unless  it  fur- 
ther shows  the  authority  of  that  select  number.3  Where  the 
organic  law  of  a  corporation  provides  that  such  societies  "  shall 
have  the  right  to  admit  as  members  such  persons  as  they 
may  see  fit,  and  expel  any  member  as  they  may  see  fit," 
the  power  of  expulsion  resides  in  the  corporation  at  large, 
and  may  not  be  delegated  to  a  select  committee  or  board 
of  directors.1  But  where  the  charter  confers  the  power  to 
expel  "  such  persons  as  the  association  may  see  fit,  in  man- 
ner to  be  prescribed  by  the  rules,  regulations  and  by-laws 
thereof,"  a  rule  prescribing  the  mode  of  expulsion  by  a  trial 
before,  and  by  a  vote  of  the  board  of  directors,  is  justified  by 
the  language  of  the  charter.6  ISTo  corporation  has  the  power 
to  delegate  to  an  outside  body  the  power  of  expelling  a  mem- 
ber. Where  various  corporations  send  delegates  to  a  grand 
council,  whose  powTers  in  the  premises  are  not  derived  from  the 
incorporation  laws  of  the  state  in  which  these  corporations 
exist,  it  has  no  jurisdiction  to  expel  members  of  these  corpo- 

1  See  Rex  v.  Faversham,  8  Term  Hassler  v.  Association,  14  Phila.  233. 
Rep't  356;  Hceffner  v.  Grand  Lodge,  3Green  v.  Society,  1  Ser.  &  R.  354. 
41  Mo.  App.  359;  Supreme  Lodge  v.  4  State  v.  Chamber  of  Commerce,  20 
Zuhlke,  129  111.  298;  21 N.  East.  Rep.  Wis.  63. 

789  6  Pitcher  v.  Board  of  Trade,  121  111. 

2  Commonwealth  v.  German  Soci-  412;  13  N.  East.  Rep.  187;   State  v. 
ety,  15  Pa.  St.  254;  State  esc  rel.  v.  Chamber  of  Commerce,  47  Wis.  670. 
Chamber  of  Commerce,  20  Wis.  63; 


MEMBERSHIP.  139 

rations,  or  to  review  the  proceedings  in  expulsion,  which  may 
have  taken  place  in  any  of  these  corporations.'  On  the  trial 
of  a  member  of  a  lodge  before  a  committee,  an  irregularity  in 
the  appointment  of  the  committee  under  the  by-laws  is  waived 
by  the  appearance  of  the  accused,  who,  having  knowledge  of 
the  irregularity,  does  not  object  to  it.2  Where  a  member  of 
an  association  appears  before  a  tribunal  thereof,  charged  with 
violating  its  rnles,  and  submits  his  case  to  it  without  objec- 
tion to  the  manner  in  which  the  tribunal  is  constituted,  all 
irregularities  in  the  constitution  of  the  tribunal  are  waived.3 
The  laws  of  a  society  provided  that  its  governing  committee, 
to  which  its  government  and  management  was  confided,  should 
consist  of  twenty-four  members,  and  that  a  two-thirds  vote  of 
the  governing  committee  should  be  necessary  for  the  expul- 
sion or  suspension  of  a  member.  At  the  time  when  certain 
proceedings  in  expulsion  were  taken,  the  committee  had  been 
reduced  in  number  to  twenty  members,  and  but  eighteen  were 
present  when  the  vote  for  the  expulsion  took  place.  Fourteen 
of  the  members  who  were  present  voted  in  favor  of  the  adop- 
tion of  the  resolution  of  expulsion,  and  the  other  four  voted 
against  it.  The  resolution,  therefore,  failed  to  secure  the  vote 
of  two-thirds  of  the  members  of  the  governing  committee;  for 
to  constitute  such  a  vote,  that  of  sixteen  of  the  members  was 
necessary.  The  judgment  of  expulsion  in  this  case  was  ir- 
regular and  illegal.4  Two  members  of  a  club  had  a  quarrel, 
;iinl  one  used  abusive  language  toward  the  other.  For  this  he 
was  tried  and  expelled.  One  of  the  members  of  the  tribunal 
which  expelled  him  was  a  distant  relative  (cousin)  of  the  wife 
of  the  person  to  whom  the  abusive  language  was  addressed, 
and  the  expelled  member  brought  suit  to  have  the  resolution 
of  expulsion   declared    null    and    void.      The    court    held,  that 

although  proceedings  in  expulsion  must  be  characterized  by 
honesty  and  good  faith,  yet  such  relationship  does  not  dis- 
qualify the  member  of  the  tribunal  from  taking  part  in  the 
proceeding,  under  the  rules  applicable  in  courts  of  law  in  case 
of  the  consanguinity  or  affinity  of  a  judge  to  either   of    the 

•Allnut  v.    Forrester.  B2  Midi.  110:    9  All.   Rep.   ITS;    People  v.  (society.  28 

28  N.  W.  Rep.  802;  Bee  also  Lamphere  Mich.  261. 

v.  Workmen,   Vt  Mich.  129;  state  v.  8Pitcherv.  Board  of  Trade,  mpra. 

Miller,  66  Iowa  26;  23  X.  W.  Rep.  241.  *Loahat  7.  LeRoy,  LO  Han   546. 
2Sperry's  Appeal,  116  Pa.  St.  891; 


14:0  MEMBEESIIIP. 

parties,  since  the  proceeding  is  not  before  a  legal  tribunal,  nor 
inter  partes,  but  is  of  a  quasi-judicial  character,  by  the  club,  in 
the  way  of  discipline  against  the  offending  member.1  The 
mere  fact  that  members  of  the  tribunal  have  become  familiar 
with  the  subject-matter  of  the  charges  to  be  investigated, 
through  conversations  with  members  of  the  society  and  other- 
Avise,  does  hot  disqualify  them  from  serving,  nor  sustain  a 
charge  that  they  were  biased  or  prejudiced  against  the  party 
expelled.2  The  court  of  a  society  need  not  observe  any  of  the 
rules  of  law  as  to  challenge  of  jurors.3 

§  68.  Good  faith  in  proceedings  in  expulsion. — Malice, 
though  not  a  crime,  is  a  quasi  crime,  and  will  never  be  pre- 
sumed bv  the  courts.  It  must,  when  relied  on  as  invalidating 
an  expulsion  be  charged  and  proved  specifically.  The  books 
speak  of  malice  on  the  part  of  committees  and  societies  in 
matters  of  expulsion;  and  in  applications  for  reinstatement  to 
membership  and  in  suits  for  damages  for  wrongful  expulsion, 
there  are  usually  strong  allegations  of  malice  and  bad  faith  in 
the  proceedings  of  expulsion,  and  yet  in  the  adjudicated  cases 
there  is  little  said  upon  the  subject  of  malice  and  bad  faith. 
except  the  decision  of  the  court  that,  in  the  particular  case  in 
hand,  there  is,  oris  not,  sufficient  evidence  of  malice  and  bad  faith 
to  set  aside  the  expulsion.  It  has  never  been  decided  whether 
malice  may  be  shown  by  proving  that  each  individual  was  in- 
dependently actuated  by  malice,  or  whether  it  must  be  further 
shown  that  the  members  of  the  tribunal,  whether  composed  of 
a  committee  or  of  the  whole  society,  had  combined  together 
and  agreed  upon  an  illegal  proceeding.  Where  malice  and  bad 
faith  in  the  proceedings  in  expulsion  are  charged,  the  court 
will  permit  the  members  of  the  tribunal  to  testify  as  to  the  mo- 
tives under  which  they  acted  in  such  proceedings,  will  permit 
them  to  give  their  reasons  for  voting  in  favor  of  the  expulsion 
of  the  member,  and  to  declare  that  they  did  not  exercise  their 
power  capriciously,  corruptly,  unjustly  or  maliciously.  They 
may  also  state  that  they  acted  bp'na  fide,  and  were  not  influ- 
enced by  the  persons  pressing  the  charges.4 

1  Loubat  v.     LeRoy,   15   Abb.  N.        4Lyttleton  v.  Blackburn,  33  L.  T. 
Cas.  1.  Rep.  (N.    S.)  642;   Gardner  v.  Free- 

2  Loubat    v.    LeRoy,    15    Abb.  N.    mantle,  19  W.    R.   256;   Hopkins  v. 
Cas.  1.  Marquis  of  Exeter.  L.  R.,  5  Eq.  63. 

3  Chase  v.  Cheney,  58  111.  509. 


MEMBERSHIP.  .  141 

§  69.  Decree  of  court  reinstating  member  must  be  pre- 
sented to  society. — One  who  has  been  expelled  from  member- 
ship in  a  society,  but  who  has  been  subsequently  reinstated 
by  a  decree  of  court,  should  present  the  decree  in  a  regular 
manner,  serve  it  on  the  officers  of  the  society,  and  demand  Ins 
reinstatement  of  such  officers.  He  may  not  assert  his  status 
by  simply  appearing  at  the  next  regular  meeting  after  the  de- 
cree and  insisting  upon  his  rights,  without  informing  the  offi- 
cers, in  a  regular  manner,  of  the  action  of  the  court.  If, 
while  so  appearing  and  insisting  upon  his  rights,  he  is  ejected 
from  the  hall  in  which  the  meeting  is  held,  he  can  not  recover 
damages  at  law.1 

1  McLafferty  v.  Sweeny  (Pa.  St.),  9  Atl.  Rep.  277. 


CHAPTER  IV. 

MEMBERSHIP.— PART  IT. 

§  70.    Inherent  power  of  unincorporated  society  to  expel  members. 

71.  Right  of  such  society  to  pass  by-laws  providing  for  expelling  its 

members. 

72.  Power  of  expulsion  from  usage. 

73.  Expulsion  agreed  upon  in  articles  of  association. 

74.  Charges  against  a  member  of  such  a  society. 

75.  Reinstatement  in  unincorporated  society. 

76.  Proper  remedy  of  expelled  member. 

§  TO.    Inherent  power  of  unincorporated  society  to  expel 

members. — In  the  absence  of  any  provision  in  the  constitu- 
tion or  by-laws  of  an  unincorporated  society,  giving  to  the 
members  the  power  of  expulsion,  there  is  no  inherent  power 
in  the  majority  to  expel  a  member.  The  society,  as  such,  has 
no  leo-al  entitv,  and  it  would  be  manifestly  absurd  to  sav  that 
it  had  the  power  of  self-preservation.  The  written  contract  of 
association  expresses  the  terms  on  which  the  members  meet, 
and  is  the  law  governing  the  members  in  their  relations 
toward  each  other.  There  is  the  greatest  possible  latitude 
given  to  members  to  agree  upon  the  terms  upon  which  they 
shall  associate,  but  the  law  will  supply  no  provisions  in  the 
articles  of  association.  In  the  absence  of  an  agreement  that 
it  may  be  done,  the  majority  may  not  expel  the  minority  of 
an  unincorporated  society.1  It  is  sometimes  said  that  this  is 
the  English  rule,  but  that  in  this  country  the  inherent  power 
of  such  societies  to  expel  their  members  is  recognized,  and 
may  be  exercised  for  the  same  causes  as  in  incorporated  socie- 
ties. The  case  of  Leech  v.  Harris 2  is  cited  as  the  authority  for 
the  so-called  American  doctrine.  In  the  first  place,  the  opin- 
ion expressed  in  that  case,  about  which  the  court  had  "  very 

'District  Grand  Lodge  v.  Cohn,  20       22  Brewster  (Pa.)  571. 
111.  App.  335;  Dawkins  v.  Antrobus, 
L.  R.,  17  Chan.  Div.  615. 

(142) 


MEMBERSHIP.  143 

little  doubt,"  is  a  mere  dictum^  and  then,  the  ground  upon 
which  the  court  predicated  the  opinion  was  that  unincorporated 
societies  were  given  a  legal  existence,  and  were  placed  under 
the  supervision  of  the  courts  by  the  laws  of  Pennsylvania. 
And  in  White  v.  Brownell1  it  is  said  that  "where  they  (unin- 
corporated societies)  have  no  regulation  upon  the  subject  they 
may  expel  a  member  by  a  vote  of  the  majority,  if  he  has  been 
notified  of  the  charge  against  him  and  afforded  an  opportunity 
of  being  heard  in  his  defense."2  The  range  of  discussion  is 
wide  in  the  case  of  White  v.  Brownell,  and  the  opinion  is.  in 
many  respects,  exceedingly  valuable.  The  language  quoted 
is,  however,  entirely  outside  of  any  questions  in  the  record. 
The  case  of  limes  v.  AVylie  is  an  English  case  which  holds 
that  a  member  may  not  be  expelled  from  a  society  without 
notice,  and  that  damages  for  deprivation  of  rights  of  member- 
ship can  only  be  recovered  in  certain  cases. 

The  court  begins  its  opinion  by  saying  :  "I  am  of  opinion 
thai  where  there  is  not  any  property  in  which  all  the  mem- 
bers  of  a  society  have  a  joint  interest,  the  majority  ma}-  by 
resolution  remove  any  one  member."  The  majority  can 
remove  a  member  in  such  a  case,  and  he  will  be  without 
remedy,  because  the  courts  will  not  exercise  jurisdiction  to 
reinstate  a  member  where  no  rights  of  property  are  involved 
merely  that  he  may  enjoy  the  righl  to  meet  with  other  mem- 
bers, but  the  majority  may  not  remove  him,  for  it  is  funda- 
mental, us  will  hereafter  more  fully  appear,  that  the  majority 
must  proceed  according  to  the  rules  of  the  society.  Having 
no  rules  on  the  subject,  how  may  they  proceed  in  the  matter? 

In  one  case  the  charge  upon  which  the  member  was  expelled 
from  an  unincorporated  society  was  that  he  had  beenguUtyof 
a  conspiracy  to  injure  and  destroy  the  society.  The  constitu- 
tion provided  as  follows  ;     "If  any  member  defraud  this  union, 

he   shall    he  dealt    wit h  as  the  cent  ral  body  in;iy  decide."      Be- 

yond  this  no  specific  provision  appeared  in  the  constitution  or 
by-laws,  under  which  members  might  l>e  expelled.  The  con- 
tention of  the  society  was  that  the  power  of  expulsion  is  inher- 
ent in  every  society,  and  that  the  offense  of  which  themembeT 

■4  Abb.  IV.  N.  s.  162;  J  Dalj    339.       "Lyttleton  v.   Blackburn,  45  L.  J. 
'Citing   lanes  v.  Wylie,  1  Car.  A:   Ch.    •,"-':'.:  :'-:'>  L. T.    B.  642;  Bigby   v. 
Kir.  262.  Connol,  11  Chan.  Div.  182. 


144  MEMBERSHIP. 

was  found  guilty,  was  sufficient  ground  for  expulsion,  as  mat- 
ter of  law,  irrespective  of  any  provision  of  the  constitution  or 
by-laws.  The  member  was  reinstated  to  membership  upon  the 
ground  that  the  facts  in  the  case  raised  the  irresistible  con- 
clusion that  the  trial  and  conviction  of  plaintiff  was  a  travesty 
upon  justice,  and  lacking  in  the  essential  elements  of  fairness, 
good  faith,  and  candor,  which  should  characterize  the  action 
of  men  in  passing  upon  the  rights  of  their  fellow-men.  But  in 
the  opinion  the  court  subscribes  to  the  proposition  that  there 
is  an  inherent  right  of  expulsion  in  every  society,  and  says  •. 
"  The  right  of  expulsion  from  associations  of  this  character 
may  be  based  and  upheld  upon  two  grounds :  First,  a  viola- 
tion of  such  of  the  established  rules  of  the  association  as  have 
been  subscribed  or  assented  to  by  the  members,  and  as  provide 
expulsion  for  such  violation.  Second,  for  such  conduct  as 
clearly  violates  the  fundamental  objects  of  the  association, 
and,  if  persisted  in  and  allowed,  would  thwart  those  objects,  or 
bring  the  association  into  disrepute.  We  content  ourselves 
with  stating  the  propositions  thus  broadly,  and,  for  the  pur- 
poses of  this  case,  need  not  refer  to  the  numerous  authorities 
denning  and  limiting  the  power."  ' 

It  is  evident  from  this  language  that  the  expulsion  would  have 
been  sustained  by  the  court,  had  it  not  found  that  malice  and 
bad  faith  were  the  motives  which  prompted  it.  "While  this  case 
is  not  an  authority  in  favor  of  the  proposition  that  unincor- 
porated societies  have  an  inherent  power  of  expulsion,  it  indi- 
cates very  decisively  the  opinion  of  the  court  upon  the  question. 
Where  the  contract  of  association  is  silent  as  to  the  expulsion 
of  its  members,  and  a  minority,  whether  one  or  more,  defrauds 
the  members,  or  performs  acts  against  the  objects  and  purposes 
for  which  the  members  associated,  the  remedy  is  by  dissolu- 
tion and  distribution  of  the  property  among  the  members.  It 
is  within  the  power  of  the  members  to  provide  the  remedy  of 
expulsion,  and  thus  to  preserve  the  association  from  dissolution 
in  such  cases,  but  the  law  will  not  interpolate  into  the  contract 
of  the  associates  a  provision  supplying  such  a  remedy.  The 
true  rule  is  laid  down  in  White  v.  Brownell,"  where  it  is  said : 
"As  this   association   is  not  organized  in  pursuance  of  any 

1  Otto  v.  Benevolent  Union,  75  Cal.       2  3  Abb.  Pr.  N.  S.  318. 
313;  17  Pac.  Rep.  217. 


MEMBERSHIP.  145 

statute,  nor  are  the  terms  of  membership  fixed  by  principles 
of  the  common  law,  it  follows  that  the  agreement  which  the 
members  make  among  themselves  on  the  su bject  must  estab- 
lish and  determine  the  rights  of  the-  parties  on  the  subject. 
The  constitution  of  the  association  and  its  laws  agreed  upon  bv 
the  members  contain  all  the  stipulations  of  the  parties  and 
form  the  law  which  should  govern.  The  members  have  es- 
tablished a  law  themselves." 

§71.  Right  of  unincorporated  societies  to  pass  by-laws 
providing  for  expulsion  of  members — Effect  of  such  by-laws 
on  protesting  minority. — When  a  person  becomes  a  member 
of  an  unincorporated  society,  he  is  bound  by  the  laws  of  the 
society  as  they  exist  at  the  time  of  his  admission.  If,  by  the 
contract  of  association,  the  majority  has  power  to  make  and 
alter  rules  affecting  the  general  interests  of  the  society,  he  is 
bound  by  such  by  daws  as  may  thereafter  be  passed  concern- 
ing expulsion  of  members.  But  if  the  contract  of  associa- 
tion is  silent  as  to  future  legislation  by  the  members,  he  is  not 
bound  by  subsequent  by-laws,  unless  he  voted  for  them,  as- 
sented to  them,  or  in  some  way  acted  upon  them.  There  is 
no  inherent  right  in  an  unincorporated  society  to  pass  by-laws 
for  the  expulsion  of  members.1  In  one  case  the  question  was 
as  to  whether  a  by-law,  under  which  a  member  had  been  ex- 
pelled, was  binding  upon  him  as  a  member  of  a  certain  club. 
The  court  said  :  "  Now  that  does  not  depend  on  the  inherent 
power  of  a  club  to  pass  a  rule  to  expel  one  or  more  of  its 
members;  I,  for  one,  am  unaware  of  the  existence  of  such  a 
power,  and  I  was  surprised  to  hear  such  a  proposition  put  for- 
ward. There  is  no  more  inherent  power  in  the  members  of  a 
club  to  alter  their  rules  so  as  to  expel  one  of  its  members 
against  the  wishes  of  the  minority,  than  there  is  in  the  mem- 
bers of  any  society  or  partnership  which  is  founded  on  a  con- 
t  i-act,  that  written  contract,  of  course,  expressing  the  terms 
on  which  the  members  associate  together;  and  it  is  intolerable 
to  imagine  that  the  majority  should  in  such  a  ease  claim  an 
inherent  power  of  expelling  the  minority.  I  say  this  because 
that  has  been  a  matter  pressed  upon  me  as  if  capable  of  argu- 
ment. I  think  it  is  not."  Where  the  articles  of  association 
are  silent  upon  the  power  of  future  legislation,  a  protesting 

1  Dawkins  v.  Antrobus,  L.  R.,  17  Chan.  Div.  615. 
10 


146  MEMBERSHIP. 

minority  are  not  bound  by  the  acts  of  a  majority  in  passing 
by-laws. 

§  72.     Power    of    expulsion   from  long  and  immemorial 
usage. — It    is    undoubtedly  true   that   some   unincorporated 
societies  which  have  existed  for  many  years,  either  as  a  certain 
and  delinite  class,  or  as  individual  societies,  have  the  right  to 
inquire  into  the  conduct  of  their  members,  and  the  power  to  ex- 
pel them  for  certain  offenses,  whether  this  right  and  power  is 
specially  conferred  by  the   contract   of  membership,   or  not. 
Churches,  for  instance,  may  expel  their  members  for  immoral 
and   scandalous  conduct.  .  This  power  is  established  by  long 
and  immemorial  usage ;  and  when  the  usage  has  been  proved, 
the  law  will  presume  the  existence  of  provisions  in  every  con- 
tract of  membership  in  a  church,  giving  to  it  this  power  of 
expulsion,  and  will  also  presume  that  the  member  joined  the 
church  well  knowing,  and  assenting  to,  the  recognized  power 
of  expulsion  in  the  body  of  the  church.     It  must  be  remem- 
bered that  the  contract  of  membership  in  a  church  is  not  a 
written  contract ;  it  arises  from  admission  into  fellowship  with 
a  large  and  indefinite  body  governed  by  certain  customs  and 
usages ;  it  is,  at  most,  a  contract  partly  in  writing  and  partly 
constituted  of  these   customs  and  usages.     It  differs  from  a 
contract  of  membership  wherein  all  the  conditions  of  member- 
ship  are  specifically  set   forth.     But  even  in  a  church,  this 
power  of  expulsion  is  not  to  be  regarded  as  an  inherent  power, 
but  must  be  said  to  be.  a  power  arising  from  usage  and  cus- 
tom which  implies  the  existence  of  an  unwritten  by-law  con- 
ferring the  power  upon  the  church.     And  an  inherent  power 
is  vastly  different  from  one  which  is  conferred  by  a  custom. 
It  requires  no  evidence  to  establish  the  existence  of  an  inher- 
ent power,  but  a  custom  must  be  proved  as  any  other  fact.     It 
would  be  exceedingly  difficult  to  prove  a  custom  which  would 
sustain  the  expulsion  of  a  member  from  a  society  in  which  the 
contract  of  membership  is  specifically  written  out.     Custom 
may  not  be  shown  to  take  the  place  of  the  contract  of  mem- 
bership as  agreed  upon,  but  may  be  shown  merely  as  evidence 
of  the  adoption  of  an  additional  unwritten  provision.     Where 
this  contract,  originally  silent  as  to  the  power  of  expulsion, 
has  been  amended  from  time  to  time  during  the  period  over 
which  it  is  proposed  to  show  that  the  custom  of  expelling 


MEMBERSHIP.  147 

members  has  extended,  but  no  amendment  has  been  added 
upon  the  subject  of  the  power  of  expulsion,  no  custom  can 
prevail  over  the  express  provisions  of  the  contract  as  amended 
And  again,  it  may  be  questioned  whether  an  established  usage 
can  be  successfully  asserted  in  any  society  which  is  only  in  its 
infancy, — which  has  only  existed  for  five  or  ten  years.  A 
usage,  in  its  most  extensive  meaning,  includes  both  custom  and 
prescription ;  but,  in  its  narrower  signification,  it  refers  to  a 
general  habit,  a  mode  or  course  of  procedure.  A  usage  differs 
from  a  custom,  in  that  it  is  not  required  that  it  should  be  im- 
memorial to  establish  it ;  but  it  must  be  known,  certain,  uni- 
form, reasonable,  and  not  contrary  to  law.  It  will,  therefore, 
be  next  to  impossible  to  show  that,  under  a  contract  of  asso- 
ciation which  has  been  only  a  few  years  in  existence,  there  can 
have  grown  up  a  usage  in  regard  to  the  expulsion  of  members, 
although  no  express  power  of  expulsion  is  given  by  the  terms 
of  such  contract.  To  make  a  proper  showing  of  such  usage, 
it  is  necessary  to  show  cases  sufficiently  numerous  to  establish 
a  course  of  procedure,  in  which  the  power  has  been  exercised 
and  acquiesced  in  by  the  society.  To  be  able  to  cite  a  few  in- 
stances in  which  such  a  power  has  been  exercised  will  not  es- 
tablish a  usage.  This  doctrine  is,  by  analogy,  clear  and  well 
settled.'  There  is  no  reason  for  the  existence  of  a  constitution 
and  by-laws,  if  they  are  to  be  overridden  by  mere  usages  and 
customs  open  to  dispute.3 

;<  73.  Expulsion  of  members  agreed  upon  in  the  con- 
tract of  association. — An  unincorporated  society  may,  in  its 
articles  of  association,  prescribe  the  conditions  upon  which  the 
continuance  of  membership  shall  depend.  There  is  one,  and 
only  one,  qualification  to  this  rule;  such  society  may  not 
make  the  continuance  of  membership  dependent  upon  a  condi- 
tion which  is  contrary  to  the  laws  of  the  land.  In  such  a  so- 
ciety, the  privilege  of  membership  is  not  given  by  statute  us 
in  a  corporation,  but  is  created  and  conferred  by  the  organiza- 
tion itself,  and  is  derived  exclusively  from  the  body  which  he- 
stows  it.  When  a  person  becomes  a  member  he  bases  his 
rights,  as  such,  not  upon  any  charter  which  guarantees  to  him 
a  certain  protection  under  the  laws  of  the  land,  but  upon  the 

1  Knights  of  Pythias'  Case,  3  Brews-  8  Lazensky  v.  Supreme  Lodge,  3  N. 
ter,  452.  Y.  Supp.  52. 


148  MEMBERSHIP. 

will  of  a  majority  of  his  fellow  members,  under  the  contract  of 
association.  The  policy  and  acts  of  such  a  society  are  neces- 
sarily controlled  by  a  majority  of  its  members;  and  the  con- 
stitution and  by-laws  agreed  upon  contain  the  contract  of 
association,  and  form  the  laws  which  govern  the  majority,  and 
each  member  of  the  society.  It-is  not  the  province  of  a  court 
to  make  contracts  for  parties,  and  it  may  not  make  any  other 
contract  for  the  members  than  that  which  is  set  forth  in  the 
constitution  and  by-laws.  The  court  has  no  visitorial  power 
over  unincorporated  societies,  since  they  exist,  not  by  grant 
from  the  state,  but  by  the  agreement  of  the  members;  and  when 
the  parties  have  agreed  upon  the  terms  under  which  member- 
ship shall  continue,  the  court  will  not  inquire  into  the  reason- 
ableness or  unreasonableness  of  such  terms.  There  are  obiter 
dicta  in  some  cases,  and  one  decision  to  the  effect  that 
courts  will  not  inquire  into  the  reasonableness  of  by-laws 
of  voluntary  societies,  even  though  they  be  incorporated,  if 
it  be  shown  that  the  member  assented  to  them. 

There  are  numerous  obiter  dicta  in  the  books  to  the  effect 
that  courts  will  not  interfere  with  the  rules  and  by-laws  of  un- 
incorporated voluntary   societies,   unless  they  are  manifestly 
harsh  and  unconscionable;  but  it  is  believed   that  there  is  not 
a  case  in  which  a  court  has  ever  declared  a  by-law  of  such  a 
society  to  be  unreasonable  and,  on  that  account,  invalid.     The 
true  rule  is  that  the  by-laws  of  an  incorporated  society  must  be 
reasonable   and   necessary  for    its  good  government,  as  well 
as  in  conformity  with  the  laws  of  the  land,  and  the  assent  of 
the  members  to  the  by-laws  is  not  to  be  considered  as  deter- 
mining their  validity;  but  individuals  who  form  themselves  into 
an  unincorporated  voluntary  society  for  a  common  object,  may 
and  do  agree,  that,  so  long  as  they  retain  their  relations  with 
the  society,  they  shall  be  governed  by  the  constitution  and  by- 
laws as  they  exist,  and   as  they  may  be  amended  under  the 
contract  of  association,  if  there  is  nothing  in  them  or  in  such 
amendments,  in  conflict  with  the  law  of  the  land;   and    those 
who  become  members  of  the  society  are  presumed  to  know 
them,  to   have   assented   to   them,  and  are  bound   by   them. 
While  a  society  remains   unincorporated,   therefore,  it  may 
make  regulations  ad  libitum  for  the  discipline  of  its  members 
including,  of  course,  expulsion,  so  long  as  they  are  not  in  con- 


MEMBERSHIP.  149 

flict  with  the  law.  But  the  moment  it  obtains  a  charter,  it 
parts  with  the  powers  it  before  possessed,  and  comes  under  the 
law  which  governs  corporate  bodies.1  While  this  power  to 
determine  the  causes  for  which  a  member  may  be  expelled  is 
very  extensive,  and  may  be  said  to  be  almost  beyond  the  con- 
trol of  the  law,  yet  it  is  held  in  check  and  from  abuse  by  the 
powerful  motive  of  self-interest.  The  abuse  of  the  power 
may  be  visited  upon  those  who  are  responsible  for  such  abuse; 
and  hence  the  compact  of  association  will  naturally  be  formed 
in  a  spirit  of  justice  and  fairness  to  the  interests  of  all  the  mem- 
bers. The  members  of  a  voluntary  unincorporated  society 
may  agree  that  no  associate  shall  remain  a  member  and  enjoy 
its  privileges  if  he  refuses  to  comply  with  its  rules  and  by-laws.3 
Where  the  rules  of  an  unincorporated  society  provide  that  if 
the  society  "shall  at  any  time  deem  the  conduct  of  any  mem- 
ber suspicious,  or  that  such  member  is  for  any  other  reason 
unworthy  of  remaining  in  the  society,  they  shall  have  full 
power  to  exclude  such  member,"  the  language  of  these  rules 
gives  an  unconditional  and  absolute  power  to  the  societv  to 
expel  a  member.1  The  rules  of  a  club  provided  that  "it  shall 
be  the  duty  of  the  committee,  in  case  any  circumstances  should 
occur  likely  to  endanger  the  welfare  and  good  order  of  the 
club,  to  call  a  meeting,  and  in  event  of  its  being  voted  at  that 
meeting  by  two-thirds  of  the  persons  present,  to  be  decided  by 
ballot,  that  the  name  of  any  member  shall  be  removed  from 
the  club,  then  he  shall  cease  to  belong  to  the  club."  The  court, 
in  commenting  upon  the  poAver  of  this  club  to  expel  its  members, 
said:  "It  is  clear  that  every  member  has  contracted  to  abide 
by  that  rule  which  gives  an  absolute  discretion  to  two-thirds 
of  the  members  present  to  expel  any  member:  Such  discre- 
tion, like  that  referred  to  by  Lord  Eldon,4  must  not  be  a  capri- 
cious or  arbitrary  discretion.  But  if  the  decision  has  been 
arrived  ;it  bona  fidei  without  any  caprice  or  improper  motive, 
then  it  is  a  judicial  opinion  from  which  there  is  no  appeal. 
None  but  the  members  of  the  club  can  know  the  little  details 
which  are  essential  to  the  social  well-being  of  such  a  society 
of  gentlemen,  and  it  must  be  a  very  strong  case  that  would 

1  State  v.  Medical  Society,   38  Ga.       3Wood  v.   Woad  et   al.,  L.   R.,  9 
608.  Excli.  190. 

s  Lewis  v.  Wilson,  121  N.  Y.  284.  *  While  v.  Damon,  7  Ves.  35. 


150  MEMBERSHIP. 

induce  this  court  to  interfere."  '  Where  the  only  penalty  im- 
posed by  the  constitution  and  by-laws  of  an  unincorporated 
society  for  an  offense  is  a  fine,  the  expulsion  of  a  member  for 
such  an  offense  is  invalid.2  The  constitution  adopted  by  an 
incorporated  mutual  benefit  society  for  the  government  of  its 
unincorporated  subordinate  lodges  provided  :  "  The  manner  of 
suspension  for  the  non-payment  of  dues  and  assessments  shall 
be  detailed  in  the  by-laws  of  every  lodge,  and  is  left  to  their 
option."  It  is  clear  that  this  provision,  which  is  a  part  of  the 
fundamental  law  of  every  lodge,  requires  the  adoption  of  by- 
laws fixing  and  prescribing  the  manner  of  suspending  members 
for  the  non-payment  of  clues  and  assessments,  before  the  power 
to  pronounce  a  sentence  of  suspension  may  be  exercised. 
Such  language  is  imperative  and  mandatory,  and  while  it 
leaves  the  subordinate  lodge  free  to  adopt  such  mode  of  pro- 
cedure in  the  matter  as  it  may  see  tit,  the  mode  adopted, 
whatever  it  may  be,  is  imperatively  required  to  be  embodied 
in  its  by-laws.  Where  a  lodge  has  never  adopted  any  by-law 
on  the  subject  of  suspensions  as  required  b}7  this  constitution, 
it  has  no  mode  of  procedure  consistent  with,  or  authorized  by, 
its  organic  law  for  suspending  persons  from  membership,  and 
any  attempted  suspension  of  a  member  is,  therefore,  wholly 
without  authority  and  void.8  The  fact  that  officers  and  mem- 
bers of  an  unincorporated  society,  as  individuals,  unite  with  a 
society  of  a  similar  character,  does  not  vacate  their  offices  or 
forfeit  their  membership  in  the  former  society,  in  the  absence 
of  a  provision  in  its  constitution  or  by-laws,  forbidding  them 
to  unite  with  the  second  society,  and  the  fact  that  the  consti- 
tution and  rules  of  the  second  society  forbid  its  members  to 
become  or  continue  members  of  any  other  local  organization, 
does  not  affect  their  relations  to  the  first  society.4 

The  rules  of  a  club  provided  that,  in  case  the  conduct  of  any 
member,  either  in  or  out  of  the  club-house,  should,  in  the  opin- 

1  See  Inderwick  v.  Snell,  2  Mac.  &  8  District  Grand  Lodge  v.  Cohn,  20 

G.  216;  Manby  v.  Gresham  Life  As-  111.  App.  335. 

surance  Society,  29  Beav.  439;  Lam-  J  Farrell  v.  Cook,  5  N.  Y.  Supp.  727; 

bert  v.  Addison,  46  L.  T.  R.  20;  Lyt-  Farrell  v.  Dalzell,  5  N.  Y.  Supp.  729; 

telton  v.   Blackburn,  33  L.  T.  R.  N.  Warnebold  v.  Grand  Lodge,  83  Iowa, 

S.  642.  23;  48  N.  W.  Rep.  1069. 

*  Otto  v.  Union,  75  Cal.  313;  17  Pac. 
Rep.  217. 


MEMBERSHIP.  151 

ion  of  the  committee,  or  of  any  twenty  members  of  the  club 
who  should  certify  the  same  in  writing,  be  injurious  to  the 
character  and  interests  of  the  club,  the  committee  should  be 
empowered  (if  they  deemed  it  expedient)  to  recommend  such 
member  to  resign,  and,  if  the  member  so  recommended  should 
not  comply  within  a  month  from  the  date  of  such  communica- 
tion beino-  addressed  to  him,  the  committee  should  then  call  a 
general  meeting,  and,  if  a  majority  of  two-thirds  of  that  meet- 
ing agreed  by  ballot  to  the  expulsion  of  such  member,  his  name 
should  be  erased  from  the  list,  and  he  should  forfeit  all  right 
or  claim  upon  the  property  of  the  club.  A  member  of  the  club 
sent  a  pamphlet  which  reflected  on  the  conduct  of  another 
member,  S.,  at  his  official  address,  such  pamphlet  being  en- 
closed in  a  cover  on  which  was  printed  :  "Dishonorable  con- 
duct of  S."  This  was  brought  to  the  attention  of  the  com- 
mittee, and  they  called  upon  the  member  to  resign,  being  of 
opinion  that  his  conduct  was  injurious  to  the  character  and  in- 
terests of  the  club.  He,  however,  refused  to  resign,  and  a 
general  meeting  was  called,  at  which  the  requisite  majority 
voted  in  favor  of  his  expulsion.  On  an  action  by  the  member 
to  restrain  the  committee  from  excluding  him  from  the  club, 
it  was  held  that  the  plaintiff  having  had  an  opportunity  of 
explanation,  the  rules  having  been  observed,  and  the  action  of 
the  club  having  been  exercised  bonajide,  and  without  malice, 
the  member  was  entitled  to  no  relief  from  the  court.1 

§74.  Charges  against  a  member  of  an  unincorporated 
society. —  Whether  the  moral  conduct,  or  acts  complained  of 
as  prejudicial  to  the  society,  are  sufficient  to  justify  expulsion, 
under  the  general  power  of  expulsion  agreed  upon  in  the  con- 
stitution of  the  society,  is  a  matter  exclusively  Tor  the  tribunal 
hearing  the  complaint,  and  not  for  the  court  to  decide.  Such 
decisions  may  not  be  reviewed  by  a  court,  or  even  be  consid- 
ered, unless  the  alleged  cause  of  expulsion  be  so  trivial,  or 
unimportant  of  itself,  as  to  suggest  that  the  action  of  the 
tribunal  was  capricious,  orcorrupt,  and  not  hmni  ri<h\  Whether 
a  certain  act  or  omission  is  an  offense  against  the  laws  of  the 
society  is  a  question  which  the  society  alone  must  determine. 
The  society  must  enact  and  construe  its  own  laws,  and  enforce 

'Dawkins  v.  Antrobus,  44  L.T.  Rep.  (N.  S.)557;   L.R.,17  Chan.  Div.  613. 


152  MEMBERSHIP. 

its  own  discipline,  without  the  interference  of  courts.1  The 
sufficiency  of  the  charges,  when  made,  in  respect  to  the  speci- 
fication of  time,  place  and  circumstance,  will  not  be  inquired 
into  by  the  courts,  but  must  be  determined  by  the  society,  or 
the  court  of  the  society  before  which  the  cause  is  to  be  tried. 
But  if  courts  had  the  power  to  determine  the  sufficiency  of 
the  charges  in  such  respects,  they  would  not  test  the  correct- 
ness of  the  charges  by  the  strict  rules  of  criminal  pleading, 
but  would  hold  that,  if  they  are  so  plainly  drawn  that  the 
nature  of  'the  offense  may  be  understood,  they  will  be  suffi- 
cient. A  society  is  bound  by  the  exact  letter  of  its  rules,  and 
must  follow  them  strictly,  when  seeking  to  expel  a  member 
for  a  supposed  violation  of  them.  A  member  was  expelled 
from  a  society.  The  club  from  which  he  was  expelled  was 
a  workingmen's  club,  and  the  member  was  also  a  mem- 
ber of  a  licensed  victuallers'  trade  protective  association. 
The  circumstances  under  which  the  plaintiff  was  expelled 
by  the  club  committee  were  as  follows :  The  committee 
of  the  club,  who  had  no  license  for  the  sale  of  spiritu- 
ous liquors,  were  accustomed  to  sell  spirits  and  beer  in 
bottles  to  members,  to  be  either  consumed  on  the  premises  or 
taken  away.  The  plaintiff,  to  test  the  legality  of  this  course, 
and  by  the  instructions  of  his  trade  protective  association, 
bought  a  bottle  of  whisky  and  another  of  beer  at  the  club  and 
took  them  away  with  him.  He  then  sent  a  messenger  with 
his  member's  ticket,  to  buy  a  bottle  of  beer,  but  he  was  not 
served,  on  its  being  discovered  that  the  messenger  was  not  a 
member.  The  trade  protective  association  took  out  a  sum- 
mons in  the  police  court  against  the  committee  for  an  infringe- 
ment upon  the  licensing  laws;  evidence  was  given  by  the  plaint- 
iff in  support  of  the  charge,  and  the  committee  was  held  guilty 
and  fined.  The  plaintiff  was  then  informed  that  his  conduct 
would  be  considered  by  the  committee,  and  they  afterward 
informed  him  that  he  had  been  expelled  for  breach  of  the  club 
rules.  The  only  rule  which  was  cited  on  the  hearing  of  the 
motion,  as  having  been  infringed,  was  a  rule  providing  that  no 
visitor  could  pay  for  any  article,  and  the  contention  of  the 
club  was,  that  the  attempt  of  the  plaintiff  to  purchase  through 

1  Chase    v.    Cheney,   58    111.    509;  Wood  v.  Woad,   L.   R.,  9  Exch.   190; 
Dawkins  v.  Antrobus,  supra. 


MEMBERSHIP.  153 

the  messenger  was  a  breach  of  the  rule  with  respect  to  visitors. 
The  motion  on  behalf  of  the  plaintiff  was  for  an  injunction  to 
restrain  the  committee  from  interfering  with  his  enjo3Tment  of 
the  club  property,  and  the  application  was  granted  on  the 
ground  that  no  breach  of  the  rules  had  been  committed.1 
Where,  under  the  powers  of  the  constitution,  a  member  has 
been  expelled  by  the  ministers  and  elders  of  a  church,  for  en- 
tertaining opinions  and  promulgating  doctrines  within  the 
society,  at  variance  with  the  established  belief  and  subversive 
of  the  society,  the  court  will  not,  in  an  action  of  tort  for  such 
expulsion,  determine  whether,  or  not,  the  opinions  and  doctrines 
of  the  expelled  member  were,  in  fact,  inconsistent  with  the  es- 
tablished belief  of  the  society.9  "Where  it  was  alleged  that  the 
offense  was  committed  "at  divers  times  during  the  two  years 
last  past"  and  "at  divers  times  during  the  six  months  last 
past,"  the  charges  were  held  sufficient  in  regard  to  the  time 
laid,  as  the  allegation  of  the  precise  time  was  not  essential.3 
If  a  case  comes  properly  before  a  society  on  proceedings  to 
expel  a  member  on  charges  made  against  him,  the  society  is  to 
judge  of  the  sufficiency  of  the  charges. 

§  75.  Reinstatement  to  membership  in  unincorporated 
society.— Unincorporated  voluntary  societies  will  be  held  to 
the  fair  and  honest  administration  of  the  rules  which  are  in 
force  when  any  proceeding  is  instituted  against  a  member;  but 
where  the  rule  which  the  member  is  found  to  have  violated  is 
not  contrary  to  the  law  of  the  land,  and  a  member  is  expelled 
in  conformity  with  the  rules,  after  proper  notice,  and  the  pro- 
ceedings are  regular,  and  in  good  faith,  no  judicial  tribunal 
may  interfere  with  the  expulsion.  Courts  will  consider  the 
expulsion  of  a  member  from  an  unincorporated  society  only  to 
determine  three  things:  first,  whether  the  decision  arrived  at 
is  contrary  to  natural  justice,  as,  for  instance,  whether  be  had 
an  opportunity  to  be  heard  in  explanation  of  his  conduct; 
secondly,  whether  the  rules  of  the  society  have  been  observed; 
thirdly,  whether  the  action  of  the  society  was  malicious  and 
not  bona  fide.  Courts  will  not  undertake  to  act  as  courts  of 
appeal  from   the   decisions   of    tribunals   of    unincorporated 

1  72  Law  Times,  183.  Farnsworth  v.  Storrs,   5  Cash.  412. 

9  Grosvenor  v.  United  Society,  118      a  Chue  v.  Cheney,  58  111.  509. 
Mass.  78;  Waite  v.  Merrill,  4  Me.  102; 


154.  MEMBERSHIP. 

societies,  but  will  only  determine  whether  such  tribunals  have 
acted  ultra  vires.  The  court  has  no  right  to  consider  whether 
what  was  done  was  right  or  not,  or  even,  as  a  substantive 
question,  whether  what  was  done  was  reasonable  or  unreason- 
able. It  may  inquire  into  the  reasonableness  of  the  action  of 
the  society,  and  from  the  want  of  reasonableness, — from  the 
fact  that  the  action  is  beyond  reason,  it  may  find  evidence 
tending  to  show  bad  faith  in  such  action.  But  mere  proof 
that  the  action  is  contrary  to  reason  is  no  cause  or  sufficient 
ground  why  the  court  should  interfere.  Such  proof  is  not  a 
necessary  conclusion  that  there  has  been  want  of  good  faith, 
for,  even  after  having  come  to  the  conclusion  that  a  decision 
was  wholly  unreasonable,  one  might  be  convinced  aliunde 
that,  nevertheless,  there  was  no  malice, — that  what  was  done 
was  done  in  good  faith. 

It  is  not  for  the  court  to  decide  whether  or  not  it  would 
have  arrived  at  the  same  conclusion  with  the  society.  It  will 
examine  into  the  proceedings  and  decision  of  the  members, 
and  consider  whether  or  not  they  are  erroneous,  only  for  the 
purpose  of  determining  whether  they  are  so  absurd  or  evidently 
wrong  as  to  afford  evidence  that  their  action  was  not  Ion  a 
fide,  but  was  malicious,  or  capricious,  or  proceeded  from  some 
other  motive  than  a  desire  to  exercise  fairly  and  honestly  the 
power  given  by  the  rules  of  the  society.  The  agreement  of 
the  associate  is,  not  that  he  will  submit  to  expulsion  if  the 
courts  shall  say  he  ought  to  have  been  expelled,  but  that  the 
members  of  the  society,  acting  in  good  faith,  and  according  to 
the  rules,  may  expel  him,  even  though  they  make  an  honest 
mistake  in  exercising  that  power.1  The  rights  of  a  person 
who  has  been  expelled  from  an  unincorporated  society  are  to 
be  determined  by  the  constitution,  by-laws  and  rules  of  the 
society.  The  provisions  of  such  constitution,  by-laws  and  rules 
must  be  strictly  followed  in  all  proceedings  for  the  expulsion 
of  a  member ;  and  a  result  reached  through  the  violation  of 
them  can  not  be  upheld.  ISTo  member  of  a  society,  whether 
incorporated  or  unincorporated,  should  lose  his  right  of  mem- 
bership upon  a  doubtful  construction  of  the  by-laws,  rules  and 
regulations  of  the  society.  Such  by-laws,  rules  and  regulations 
must  be  construed  liberally,  with  a  view  to  the  maintenance 

1  Dawkias  v.  Antrobus,  44  Law  Times  Report  (N.  S.)  557. 


MEMBERSHIP.  155 

and  continuance  of  the  rights  of  membership ;  and,  in  case  of 
conflicting  provisions  setting  forth  the  member's  rights  and 
duties,  or  the  proceedings  which  may  be  taken  to  deprive  him 
of  his  rights,  that  provision  will  prevail  which  is  most  favor- 
able to  the  continuance  of  his  membership.  Membership  in 
an  incoporated  society  is  a  species  of  property,  and,  as  has 
been  said  on  a  preceding  page  of  this  work,  the  court  will  inter- 
fere to  protect  that  right  of  membership,  even  though  the  soci- 
ety has  no  property.  But  the  law  does  not  regard  membership 
in  an  unincorporated  society  as  a  valuable  right  and  privilege, 
and  a  court  will  not  inquire  into  the  proceedings  in  expulsion 
merely  to  restore  a  member  to  the  privilege  of  meeting  with  the 
other  members  of  the  society.  This  privilege,  however  enjoy- 
able and  beneficial,  has  no  legal  value.1  As  a  general  rule, 
therefore,  in  order  to  give  the  court  jurisdiction  to  inquire  into 
such  proceedings  in  expulsion,  some  allegation  and  proof  must 
be  made  showing  an  injury  to  the  right  of  enjoyment  of  the 
property  of  the  society.  He  cannot,  probably,  show  any  sev- 
erable proprietary  interest  in  the  property  of  the  society,  but 
he  may  show,  as  has  been  suggested,  a  right  to  the  use  and 
enjoyment  of  it,  and  a  right  to  a  proportionate  share  of  it  in 
case  of  a  dissolution  of  the  association.  Where  the  expulsion 
has  been  effected  contrary  to  the  general  principles  of  the  law, 
as,  for  instance,  without  notice  or  opportunity  to  be  heard,  or 
for  not  complying  with  an  illegal  by-law  of  the  society,  the 
court  will  not  require  a  strong  showing  of  pecuniary  loss,  but 
will  take  jurisdiction  even  where  remote,  indirect  or  small 
pecuniary  loss  has  resulted,  or  may  result  to  the  member.2 
Where  the   by-laws  provide  for  the  payment  of  benefits  to 

1  White  v.    Brownell,   4  Abb.   Pr.  can  not  be  accurately  reckoned   in 

N.  S.  162.     The   contrary  opinion    is  dollars  and  cents,  and  yet  if  a  mem- 

expressed  in  Stevick  on  Unincorpo-  ber  was  expelled  from  such  an  asso- 

rated    Societies   at  g  42,  where  that  ciation,  without  cause,  and  in  direct 

author  says:  violation   of  its  constitution,  it    can 

"Supposea  scientific  literary  asso-  not  he  doubted  that  a  court  of  equity 
ciation  having  no  property,  with  no  should  interfere  to  compel  tlie  resto- 
dues  or  expenses,  and  whose  purpose  ration  to  the  member  of  his  privi- 
is  to  meet  weekly  to  listen  to  lectures  lc^cs." 

delivered  by  eminent  and  learned  -  Innes  v.  Wylie,  1  Car.  &  Kir.  Rep. 
men,  a  privilege  only  to  be  enjoyed  257;  Fisher  \.  Keane,  L.  R.,  It  Chan. 
by  the  members  of  the  association.  Div.  358;  Metropolitan  Club  v.  Sim- 
Such  a  privilege  is  property  which  mons,  17  W,  X.  C.  lo-i. 


156'  MEMBEESHIP. 

defray  funeral  expenses  of  members  and  of  their  wives,  the 
members  have  a  property  interest  in  the  society.1 

§  76.  Proper  remedy  of  expelled  member. — A  proceeding 
may  be  maintained  against  the  members  of  an  unincorporated 
society,  or  against  a  number  of  them  representing  the  others 
when  they  are  too  numerous  to  be  joined,  by  an  expelled  mem- 
ber thereof,  to  compel  his  restoration  of  membership.  The 
object  of  such  a  proceeding  is  to  place  him  in  a  position  where 
he  can  reach  the  joint  property  and  rights  of  the  association. 
The  propriety  of  the  expulsion  may  be  reviewed  in  such  a  suit." 
Mandamus  is  not  a  proper  remedy  against  an  unincorpo- 
rated society  for  the  restoration  of  an  expelled  member.3 

The  supreme  court  of  Michigan  has  said :  "  The  only 
ground  on  which  this  court  can  interfere  with  organized  bodies 
by  mandamus  in  aid  of  a  member  is  that,  as  corporations,  they 
are  subject  to  our  judicial  oversight  to  prevent  their  depriving 
members  of  corporate  privileges  illegally.  Where  such  bodies 
are  not  corporations,  or  where  the  question  presented  does  not 
involve  tangible  and  valuable  corporate  privileges,  we  can  not 
interfere  in  this  way." 4  It  is  held  in  several  cases  that  the 
proper  remedy  of  a  member  who  is  about  to  be  illegally  ex- 
pelled from  an  unincorporated  society  is  by  bill  in  equity  seek- 
ing to  restrain  the  tribunal  from  further  proceedings  in  the 
matter,  and  that  the  proper  remedy  of  a  member  who  has 
been  illegally  expelled  from  such  a  society  is  by  a  bill  in  equity 
to  restrain  the  officers' and  members  from  interfering  with  his 
rights  of  membership.6  In  one  case  the  action  was  to  have  the 
resolution  of  expulsion  declared  null  and  void,  and  to  restrain 
the  officers  and  members  of  the  society  from  interfering  with 
the  enjoyment  by  plaintiff  of  his  rights  and  privileges  as  a 
member;  and  such  relief  was  granted.6 

1  Lysaght  v.   Association,   55  Mo.  mons,  17  Weekly  Notes  of  Cases  153; 

App.  538.  Labouchere  v.  Earl  of  Wharncliff, 

2 Fritz  v.  Muck,  62  How.  Pr.  70;  L.  R.,  13  Ch.  Div.  347;  Kerr  on  In- 

Olery  v.  Brown,  51  How.  Pr.  92.  junctions,  star  pages  545-6-7;  Hass- 

3  People  v.  German  Church,  53  N.  ler  v.  Phil.  Musical  Association,  37 
y   103.  Leg-   Int.   434;   Leech   v.    Harris,    2 

4  Burt  v.  Grand  Lodge,  66  Mich.  85  ;  Brewster  571 ;  In  re  St.  Clement's 
33  N.  W.  Rep.  13;  9  West.  Rep.  559.  Church,  28  Leg.  Int.  172. 

5  Kerr  v.  Trego,  11    Wright    292;  6Loubatv.  Le   Roy,  40  Hun   546; 
Fisherv.  Keane,  L.  R.,  11  Ch.Div.  353:  See  Rorke  v.  Russell,  2  Lans.  244. 
Metropolitan  Base  Ball  Club  v.  Sim- 


CHAPTER  V. 

LIABILITY  OF  MEMBERS. 

§  77.     For  debts  of  incorporated  society. 

78.  Where  attempted  incorporation  is  valid. 

79,  80.     For  debts  of  an  unincorporated  society. 

81.  Liability  of  person  incurring  the  debt. 

82.  Where  debt  is  incurred,  payable  out  of  special  fund. 

83.  Notice  of  creditors  of  withdrawal  from  society. 

84.  Actions  for  libel  and  slander. 

85.  Actions  between  members. 

86.  Liability  of  members  in  Pennsylvania. 

87.  Liability  of  members  in  New  York. 

§  77.  For  debts  of  incorporated  society. — Where  a  society 
is  incorporated  under  the  laws  of  a  state,  the  liability  of  its 
members  for  the  debts  of  the  society  is  governed  by  the  pro- 
visions of  the  act  under  which  it  is  incorporated.  But  if  the 
organic  law  of  the  society  makes  no  mention  of  such  liability 
on  the  part  of  its  members,  such  liability  is  governed  by  the 
general  laws  of  the  state  upon  the  subject  of  corporations. 
The  trustees  or  directors  of  an  incorporated  mutual  benefit 
society  are  not  personally  liable  for  the  debts  of  the  corpora- 
tion, unless  they  have  in  some  way  specially  rendered  them- 
selves liable  for  them.1  It  is  well  settled  that  where  an  asso- 
ciation which  has  existed  as  a  mere  copartnership  becomes 
incorporated,  and  the  corporation  then  accepts  an  assignment 
of  all  the  property  of  such  association  for  the  purpose  of 
carrying  out  its  object,  the  members  are  primarily,  and  jointly 
and  severally  liable  for  all  the  debts  incurred  before  the  act  of 
incorporation,  in  such  a  case,  the  responsibility  of  the  corpo- 
ration for  debt s  previously  made  with  the  association  does  not 
become  substituted  so  as  to  exempt  the  members  from  individ- 
ual liability.  And  it  does  not  change  the  case  that  the  mem- 
bers of  the  company  had  it  in  view  to  procure  a  future  act  of 

1  Wolf  v.  Schleiffer,  2  Brewster  (Pa.  I  .")G3. 

(157) 


15S  LIABILITY    OF    MEMBERS. 

incorporation,  when  it  was  first  formed.1  A  man  belonged  to 
an  incorporated  mutual  aid  society  to  which  he  paid  certain 
moneys.  These  moneys,  according  to  the  scheme  of  the  soci- 
ety, were  to  be  paid  out  again  to  the  various  members.  Think- 
ing that  he  had  received  no  consideration  for  these  payments, 
he  afterward  brought  an  action  as  for  money  had  and  received, 
and  sued  two  of  the  members  jointly  with  the  society.  The 
declaration  set  out  various  fraudulent  representations  whereby 
plaintiff  was  induced  to  make  the  contract,  but  its  only  ground 
of  action  was  the  legal  invalidity  of  the  company's  promise, 
the  asserted  want  of  corporate  power  to  make  the  contract  of 
membership  according  to  the  scheme.  The  court  below  held 
he  had  no  cause  of  action,  because  the  contract  on  its 
face,  and  the  evidence  which  he  put  in,  so  far  identified  the 
plaintiff  with  the  scheme  as  to  prevent  him  from  then  com- 
plaining of  it,  as  any  worse  than  he  had  reason  to  believe  it. 
The  supreme  court  said  :  "  He  has  joined  two  separate  indi- 
viduals with  the  company  as  having  received  money  to  his 
use.  As  the  ground  of  action  is  based  on  the  company's  re- 
ception of  money  without  consideration,  and  as  by  the  terms 
of  his  contract  all  money  was  to  be  paid  over  to  the  company 
and  distributed  among  the  various  subscribers,  there  is  no  joint 
liability  asserted  or  made  out.  Bidwell  and  French  (the  mem- 
bers sued)  had  no  joint  functions  as  receivers  of  money,  and 
most  of  it  was  not  paid  to  either.  Whatever  either  or  both 
may  have  done,  they  have  never  held  money  jointly  with  the 
company  or  with  each  other.  The  action  is  entirely  miscon- 
ceived. It  is  also  apparent  from  plaintiff's  showing  that 
whatever  money  he  paid  over  was  expected  to  be  paid  out  to 
other  persons  and  not  to  be  retained,  and  it  is  not  obvious  how 
this  particular  action  will  lie  for  money  which  has  been  dis- 
posed of  by  his  consent.  We  need  not,  therefore,  consider 
whether  he  is  cut  off  by  his  own  fault  from  complaining  in 
any  shape  for  the  wrong  which  he  supposes  was  done  him. 
He  can  not  recover  in  this  particular  action." 2 

§  78.    Where  the  attempted  incorporation   is  invalid. — 
Articles  of    incorporation  of   a  mutual  benefit  society  were 

1  Angell  and  Ames  on  Corporations       5  Murphy  v.  Bidwell  et  al.,  52  Mich. 
at  sections  592,  593,  594;   Boyles  v.    487. 
McCoy,  37  Tenn.  (5  Sneed)  602. 


LIABILITY    OF   MEMBERS.  loll 

duly  executed  by  defendants,  and  duly  recorded  with  the  reg- 
ister of  deeds  and  secretary  of  state.  A  member  of  the  society 
paid  his  dues,  and  received  a  certificate  of  membership.  He 
received  bodily  injury  entitling  him,  as  such  member,  to  pecun- 
iary benclit.  and  an  action  was  brought •  against  the. original 
signers  of  the  articles  of  the  association  as  individual  persons. 
The  society  did  not  become  a  corporation  dejure,  not  having 
complied  with  the  statute  so  as  to  become  an  insurance  cor- 
poration d>  jure,  and  not  being  a  "benevolent  society  *'  under 
the  statute.  In  deciding  that  the  action  would  not  lie  against 
the  defendants  as  individual  persons,  the  court  said:  **  I  tut 
notwithstanding  it  is  not  a  corporation  de  jure,  we  think  it 
must,  at  .least  as  between  its  members,  be  regarded  as  a  cor- 
poration defacto.  It  is  manifest  that  the  understanding. be- 
tween the  members,  and  the  basis  upon  which  certificates  of 
membership  were  issued,  was  that  the  association  was  a  cor- 
poration  in  fact  as  it  was  in  form.1  It  never  could  have  been 
intended  or  expected  that  the  members  of  the  association, 
whether  (.rigin;,|  founders  members,  like  defendant,  or  those 
who  should  become  members  by  joining  at  any  time,  should 
or  would  be  Liable  as  individuals,  either  jointly  or  severally, 
to  any  particular  member  who  should,  by  virtue  of  and  under 
the  terms  of  his  membership,  become  entitled  to  pecuniary 
relief  or  bench t.  On  the  contrary,  the  intention  and  real  con- 
fcracl  was  thai  the  association,  as  a  corporation  in  the  contem- 
plation of  the  parties,  i.  e.,  the  members,  should  be  liable  and 
the  association  onlv.  In  such  a  state  of  facts,  though  the 
association  is  not  ;i  corporation  di  jure,  and  perhaps  nol  for 
every  purpose  a  corporation  d\  focto,\\  is.  as  between  the 
members  themselves,  to  be  treated  as  a  corporation^  facto, 

for  that   is  the  way  in  which  the  contract  of   the  parties  treats 

it;  and  the  righl  of  a  member  to  pecuniary  benefit  from  the 
association  by  virtue  of  Ids  membership  musl  stand  upon  the 

Itasis  that  it  is  a  corporation  <le  facto.  Being  presumed  to 
know  the  significance  of  his  membership,  its  rights  and  liabil- 
ities, he  is  estopped  to  take  any  other  position.  This  is  not 
Only  intrinsically  jusl    and    fair,  but    it    is    in    accordance    with 

the  principles  of  the  authorities.1    It  is  important   to  bear  in 

'  Morawetz,  Priv.  Corp.,  §  189.  181,183,   184,   187;    Buffalo  &   \    R. 

» Citing  Moraweta,  Priv.  Corp., §§  l    Co.  v.  Cary,  88  N.  V.  75,  followed  in 


160  LIABILITY    OF   MEMBERS. 

mind  that  no  fraud  is  alleged  against  defendant;  and,  further, 
that  this  is  a  case  in  which  a  member  of  the  association  is 
seeking  relief  by  virtue  of  his  membership.  If  the  action 
were  between  a  purported  or  pretended  corporation,  which 
was  wholly  unauthorized  and  invalid,  and  a  stranger,  different 
rules  and  principles  might,  in  some  circumstances,  be  in- 
volved." ' 

§  79.  For  debts  of  an  unincorporated  society. — From  the 
cases  considered  in  this  chapter  it  will  clearly  appear  that  mere 
membership  in  an  unincorporated  society  does  not  make  a  mem- 
ber liable  for  contracts  made  or  an  indebtedness  incurred  by  a 
majority  of  its  members^  or  a  majority  of  those  present,  unless 
the  contract  of  membership,  as  set  forth  in  its  articles  of  as- 
sociation or  by-laws,  contemplates  the  pledging  of  the  credit 
of  all  the  members,  in  such  a  case  and  for  such  an  object,  by 
the  vote  and  at  the  discretion  of  such  majority.  In  the  ab- 
sence of  statutory  regulations,  the  liability  of  the  members 
respectively  for  contracts  made  by  an  unincorporated  society, 
or  its  committee  or  trustees,  depends  upon  the  principles  of 
the  law  of  agency.  In  determining  the  liability  of  a  member 
of  such  a  society,  the  question  is  whether  the  person  by  whose 
act  the  obligation  was  contracted  was  the  authorized  agent  in 
doing  so,  of  such  member.  The  leading  case  in  England  is 
Flemyng  v.  Hector.2  In  this  case  defendants  were  sued  for 
wines  supplied  before  its  dissolution  to  the  club  of  which  they 
were  members.  The  rules  of  the  club  provided  for  an  entrance 
fee  and  an  annual  subscription;  and  those  who  failed  to  pay 
the  subscription  ceased  to  be  members.  The  rules  also  pro- 
vided that  a  committee  should  "  manage  the  affairs  of  the 
club,"  and  that  members  should  daily  discharge  their  bills  due 
to  the  club.  The  main  ground  upon  which  the  decision  rested 
was  that  the  plaintiff  could  not  recover  unless  he  showed  that 
the  contract  upon  which  he  sued  was  made  by  a  person  au- 

57,  64,  67  N.  Y.,  and  95  U.  S.;  White  cessful  attempt  to  incorporate,  is,  as 

v.  Ross,  4  Abb.  Dec.  589;   Aspinwall  to  third  persons,  a  partnership,  com- 

v.  Sacchi,  57  N.  Y.  331;   Sanger  v.  posed  not  only  of  the  directors,  but 

Upton,  91  U.  S.  56;  Chubb  v.  Upton,  of  the    subscribers    to  the  articles. 

95  U.  S.  665.  Field  on  Corp.,  sections  178  and  179; 

1  Foster  v.  Moulton,  35  Minn.  458;  Coleman  v.  Coleman,  78  Ind.  344. 
29  N.  W.  Rep.    155.     An   association       2  2  Mees.  &  W.,  172;  2  Gale,  180. 
which  does  business  under  an  unsuc- 


LIABILITY    OF    MEMBERS.  10 1 

thorized  to  contract  on  behalf  of  the  defendant.  The  question 
was,  as  Baron  Parke  observed,  whether  there  was  sufficient 
evidence  to  go  to  the  jury  to  satisfy  them  that  the  person  who 
actually  ordered  the  goods  was  the  authorized  agent  of  the 
defendant  in  making  the  contract. 

In  Todd  v.  Emly,1  the  evidence  was  that  a  club  was  formed, 
and  a  fund  subscribed  which  was  to  be  administered  by  a  com- 
mittee. It  was  held  that  the  committee  must  be  supposed  to 
have  agreed  to  do  that  which  the  subscribers  to  the  club  had 
power  themselves  to  do,  that  was,  to  administer  the  fund  so 
far  as  it  went,  and  not  to  deal  on  credit,  except  for  such  arti- 
cles as  it  might  be  immediately  necessary  for  them  to  have 
dealt  for  on  credit.  There  being  no  other  evidence  to  connect 
the  transaction  with  the  defendants  than  that  they  wrere  mem- 
bers of  the  general  body  of  the  committee,  the  question  for 
the  jury  was,  not  whether  defendants  by  their  course  of  deal- 
ing bad  held  themselves  out  as  personally  responsible  to 
the  plaintiff,  but  whether  they  had  individually  authorized 
the  miking  of  the  contract  in  the  ordering  of  the  wine.' 
In  the  application  of  these  principles  it  has  been  held  that 
a  general  rule,  vesting  the  conduct  of  all  the  concerns  of  the 
club  in  a  committee,  does  not  authorize  the  committee  to 
raise  money  by  debentures,  or  otherwise  to  pledge  the  credit 
of  members.  In  In  re  St.  James  Club,  it  was  said  :  "  It  is  veiw 
clearly  settled  that  no  member  of  a  club  is  liable  to  creditors 
of  a  club,  except  so  far  as  by  contract  or  dealing  he  may  have 
made  himself  personally  liable;  and  this  is  mere  common 
sense,  for  if  a  member  paying  his  annual  subscription  and 
paving  for  the  articles  which  he  orders  in  the  club,  was  also 
liable  to  pay  the  person  who  supplied  the  club  with  those 
articles,  who  would  belong  to  a  club?"3  Sundry  persons 
raised  by  voluntary  subscription  among  themselves  a  sum  of 
money  to  erect  a  building  for  an  academy,  and  then  held  a 
meeting,  at  which  they  chose  one  of  their  number  an  agent 
"to  employ  workmen,  procure  materials,"  etc.,  and  this  agent 
hired  the  plaintiff  to  labor  in  the  erection  of  the  building. 
It  was  held  that  he  bound  all  the  subscribers,  including  him- 

1  7  Mees.  &  W.,  427;  8  Mees.  &  W.,  8  In  re  St.  James  Club,  13  Eng.  L. 
505.  &  Eq.  5S9;  16  Jur.  1075. 

8  See  4  Abbott's  New  Cases,  p.  300. 
11 


162  LIABILITY    OF    MEMBERS. 

self,  and  that  an  action  might  be  maintained  against  all  the 
subscribers  jointly/  All  the  members  of  an  unincorporated 
society  who  assent  to  an  undertaking  whereby  a  debt  is 
incurred,  or  who  subsequently  ratify  it,  are  liable  for  the  pay- 
ment of  the  debt.2  Subsequent  ratification  is  equivalent  to 
prior  authorization  of  the  acts  of  an  agent.  ]STo  new  considera- 
tion is  necessary  to  support  it.3  There  are,  doubtless,  cases  in 
which  the  act  done  by  the  officer  or  committee  of  the  society 
is  so  clearly  in  furtherance  of  the  objects  for  which  the  asso- 
ciation was  organized  that  all  the  members  will  be  presump- 
tively bound  by  it.  Whether  the  liability  of  the  members  for 
such  act  is  to  be  presumed,  must  be  determined  by  the  court 
from  an  inspection  of  the  articles  of  association.  But  when 
such  is  not  the  case,  consent  or  ratification  must  be  proved. 
It  is  for  the  jury  to  say  whether  the  debt  was  contracted  by 
the  society  with  the  previous  concurrence  or  subsequent  appro- 
bation of  the  defendant.  So  far  as  the  evidence  of  agency 
goes,  a  course  of  dealing  may  amount  to  proof  of  original 
authority.  The  fact  that  a  member  of  a  society  recognized  as 
correct  a  bill  against  the  society  for  work  and  labor  done, 
e-oes  to  show  that  he  knew  that  the  work  was  being  ordered 
in  the  name  of  the  society.  The  evidence  of  ratification,  even 
though  doubtful,  and  susceptible  of  different  interpretations, 
is  properly  submitted  to  a  jury;  and  slight  circumstances  and 
small  matters  are  sometimes  sufficient  to  raise  a  presumption 
of  ratification.4  Where  a  club  is  formed  for  the  purpose  of 
buying  goods  at  wholesale  prices  out  of  paid-up  subscriptions, 
in  order  to  enable  members  to  obtain  the  benefit  of  the  lower 
prices  of  such  goods,  members  are  not  liable  for  goods  purchased 
on  credit  by  an  officer  not  authorized  to  contract  on  credit.5 
But  where  the  contract  of  association  and  the  agreed  basis  of 
making  such  purchases  show  that  the  officer  is  clothed  with  a 
discretion  to  contract  on  credit  for  the  benefit  of  the  society, 

1  Robinson  v.  Robinson,  10  Maine,    ney  v.  Strickland,  2  Stark.  N.  R.  C. 
240.  416;   Sheehy  v.  Blake,  77  Wis.  394; 

2  Ash  v.  Guie,  97  Pa.  St.  493;  39   46  N.  W.  Rep.  537. 

Am.  Rep.  818;  Ridgely  v.  Dobson,  3  3 Ferris  v.  Thaw,  72  Mo.  446. 

Watts    &    Ser.    (Pa.)  118;  Lewis  v.  "Eichbaumv.  Irons,  supra;  Rich* 

Tilton,  64  Iowa,  220;   52   Am.  Rep.  mond  v.  Judy,  6  Mo.  App.  4  5. 

436;    Eichbaum  v.  Irons,  6  Watts  &  6  Wood  v.  Finch,  2  F.  &  F.  447. 
S.  (Pa.)  67;  40  Am.  Dec.  540;  Delan- 


I.I  ABILITY    OF    MEMBERS.  103 

the  members  are  liable  for  such  contracts  made  by  the  officer.1 
Under  a  by-law  of  a  society  giving  certain  powers  to  a  stand- 
ing committee,  and  power  "generally  to  manage  the  business 
of  the  society,  expending  only  such  sums  of  money  as  the 
society  shall  place  at  their  disposal,"  the  committee  can  not 
bind  the  members  of  the  society  to  pay  debts  which  it  may 
contract,  unless  such  members  consent  to  or  approve  the  in- 
curring of  such  debts.2  A  member  of  an  unincorporated  vol- 
untary society  is  not  liable  for  a  debt  incurred  by  a  committee 
of  the  society,  if  it  does  not  appear  that  the  member  was 
present  at  the  meeting  appointing  the  committee,  and  there  is 
no  evidence  of  the  authority  of  the  committee  to  incur  the 
debt,  or  of  the  obligations  and  duties  of  the  members  of  the 
society.3  Members  of  an  unincorporated  society  are  not  liable 
for  its  debts  to  which  they  did  not  assent  expressly  or  by  nec- 
essary implication.  If  an  officer  who  has  been  authorized  by 
the  members  of  an  unincorporated  society  to  execute  a  prom- 
issory note  for  a  debt  of  the  society,  executes  it  in  his  own 
name,  the  members  of  the  society  may  be  sued  on  the  note, 
whether  the  officer  discloses  his  agency  or  not,  unless  it  is  clear 
that  both  parties  to  the  note  intended  that  the  officer  alone 
should  be  liable.  Parol  evidence  is  admissible  to  establish  the 
intention  of  the  parties,  as  this  evidence  does  not  contradict 
that  which  is  written,  but  only  serves  to  show  that  others  than 
tlmse  mentioned  on  the  face  of  the  paper  are  bound  also,  since 
the  act  of  the  agent  is  that  of  his  principal.  The  liability  of 
the  principal  depends  on  the  act  done,  and  not  merely  on  the 
form  in  which  such  act  finds  expression."  "Where  certain  per- 
sons are,  by  an  unincorporated  society,  appointed  the  "trus- 
tees of  its  property  and  effects,'"  they  are  the  general  agents 
of  the  members  for  the  management  and  control  of  its  prop- 
erty and  effects.  They  do  not,  as  a  matter  of  law,  stand  in 
the  relation  of  principals  toother  agents  appointed  by  the 
society  to  perform  some  particular  duty  in  respect  to  such 
property,  nor  are  they  Liable  for  any  debt  incurred  for  its  im- 

1  Coekerell  v.   Ancompte,    10  Eng.        4  Ferris  v.  Thaw.  72  Mo.  -J-»<»:  Story 
L.  &  Eq.  284;  8  Jur.  N.  S.  844.  on    Agency,   §§   180,   270;    Burls   v. 

"Child  v.  Society,  1 1 1  .Mass.  478;  11    Smith,  7Bing.  705. 
N.  East.  Rep.  664. 

3Volger  v.   Kay.    181    Mass.    439; 
Burt  v.  Lathrop,  52  Mich.  106. 


lGi  LIABILITY    OF    MEMBERS. 

provement,  except  such  as  may  have  been  made  at   their  re- 
quest, either  express  or  implied.1 

There  is  no  legal  distinction,  in  respect  to  liability  for  the 
debts  of  an  unincorporated  society,  between  an  officer  and  a 
mere  member,  where  neither  contracted  the  debt  or  authorized 
another  to  represent  him  in  the  transaction.2  It  is  not  neces- 
sary that  the  agency  of  the  person  who  incurs  the  debt  should 
be  evidenced  by  any  minutes  of  the  meetings  of  the  members 
of  an  unincorporated  society.  There  is  no  adjudication  which 
requires  such  a  verification  of  the  joint  acts  of  the  members 
or  a  part  of  such  members,  but  many  cases  have  arisen  in 
which  such  a  doctrine  might  have  been  held  if  it  had  been 
the  law.  There  is,  undoubtedly,  much  convenience  in  the 
making  and  preservation  of  minutes  of  proceedings  in  such 
societies,  but  the  acts  of  the  members  may  be  shown  in  the 
delegation  or  ratification  of  power  to  a  third  person  to  incur 
debts  on  their  behalf.  The  subsequent  acts  of  a  member  in 
the  ratification  of  the  acts  of  a  third  person  in  incurring  debts 
on  behalf  of  the  society  may  be  shown  to  bind  him.  In  an 
action  against  the  members  of  an  unincorporated  society  for 
work  and  material  furnished  in  fitting  up  the  room  in  which 
the  society  held  its  meetings,  parol  evidence  that  the  defend- 
ants, at  one  of  the  meetings,  passed  a  vote  authorizing  one  of 
the  members  to  procure  the  work  and  materials,  which  he 
afterward  ordered  of  plaintiff,  is  competent  to  show  that  the 
other  defendants  were  jointly  liable  with  him ;  and  the  fact 
that  one  of  the  defendants,  who  acted  as  clerk  of  the  meeting 
at  which  such  vote  was  passed,  had  since  destroyed  the  in- 
formal minutes  which  he  had  taken  for  the  purpose  of  pre- 
paring a  record,  does  not  preclude  the  plaintiff  from  showing 
that  such  a  vote  was  passed,  and  that  defendants  participated 
in  it  or  assented  to  it.3  In  an  action  against  defendant  upon 
his  partnership  liability  as  a  member  and  officer  of  an  unin- 
corporated fair  association  to  recover  premiums  awarded  by 
it,  he  denied  that  he  was  either  an  officer  or  member.  It  ap- 
peared that  there  was  no  express  agreement  as  to  the  organi- 
zation thereof,  but  he  contributed  money  in  its  support,  and 

1  Devoss  v.  Gray,  22  Oh.  St.  159.  8  Newell  v.  Borden.  128  Mass.  31. 

2  Central  City  v.  Walker,  66  N.  Y. 
424 ;  Wolf  v.  Schleiffer,  2  Brewster 
(Pa.)  563. 


LIABILITY    OF    MEMBERS.  105 

in  the  newspaper  advertisements,  which  ran  from  April  to 
September,  he  was  designated  as  its  vice-president.  He  took 
one  of  these  papers,  but  said  he  had  no  recollection  of  seeing 
his  name  in  that  connection.  At  the  fair  he  acted  as  a  judge 
of  the  races,  but  said  he  did  so  only  at  the  solicitation  of  the 
manager  of  the  department.  He  also  collected  some  money 
to  pay  the  association's  bills.  This  was  held  to  be  sufficient 
to  warrant  a  finding  that  he  acquiesced  in  this  use  of  his  name, 
and  to  support  a  verdict  against  him.  It  was  proper  to  sub- 
mit to  the  jury  the  question  whether  defendant  was  a  mem- 
ber of  the  association,  as  well  as  the  question  whether  he 
acquiesced  in  the  use  of  his  name  as  vice-president.1 

AY  here  members  were  notified  to  attend  meetings  called  by 
the  directors  to  consider  the  matter  of  paying  off  an  unauthor- 
ized indebtedness,  they  can  not  be  held  to  have  assented  to 
and  ratified  the  creation  of  the  debt,  merely  because  they 
failed  to  attend  such  meetings.3  There  is  a  rule  of  law  which 
requires  that  all  persons,  to  whom  a  trust  is  committed,  must 
confer  and  act  together,  but  this  rule  does  not  apply  to  agents 
appointed  to  perform  ministerial  duties.  Where  the  members 
of  a  society  appoint  a  committee  of  two  or  more  members  to 
purchase  property  for  the  benefit  of  the  society,  it  is  not  nec- 
essary  that  all  the  members  of  the  committee  should  be  cor- 
poreally present  when  the  purchase  is  negotiated  and  made, 
in  order  that  such  members  of  the  society  shall  be  persona II v 
liable  for  the  act.  The  duty  in  such  case  is  strictly  ministerial, 
and  ministerial  officers  may,  in  general,  depute  their  powers 
to  one  another  or  to  a  third  person.' 

§80.  A  learned  writer  has  said:'  "  No  partnership  or 
quasi-partnership  subsists  between  persons  who  do  not  share 
either  profit  or  loss,  and  who  do  not  hold  themselves  out  as 
partners.  Societies  and  clubs,  the  object  of  which  is  not  to 
share  profits,  are  not  partnerships,  nor  are  their  members  as 
such  liable  for  each  other's  acts.  *  *  It  is  a  mere  abuse  of 
words  to  call  such  associat  ions  pail  nerships.  and  if  liabilities 
are  to  be  fastened   on  any  of  their  members,  it  must  be  by 

•Murray  v.  Walker,  88  Iowa  202;  564;  Downing  v.   Rugar,  21  Wend. 

48  N.  W.  Rep.  10.  (N.  ST.)  L78. 

McFadden  v.  1 ka,    is  Ohio  St.  *Lindley  on  Partnership,  Vol.  1.  p. 

513;  28  X.  East.  Rep.  874.  57. 

"Wells  v.  Gates,    18   Barb.  (X.  Y.) 


166  LIABILITY    OF    MEMBERS. 

reason  of  the  acts  of  those  members  themselves,  or  by  reason 
of  the  acts  of  their  agents  ;  and  the  agency  must  be  made  out 
by  the   person   who  relies   on   it,  for  none  is   implied  by  the 
mere  fact   of  association." *     Upon   the  ground  that   there   is 
neither   community  of  profit  nor   community  of  loss,  it  has 
been  held  that  no  partnership  subsists  between  the  members 
of  a  mutual  insurance  society,  in  which  each,  in  consideration 
of  a  payment  made  to  him,  underwrites  a  policy  for  a  stipulated 
sum."     In  such  societies,  each  member  acts  for  himself  only. 
The  members  of  an  unincorporated  society  are  not  liable  to 
an   action  at  law  by   the  father  of  a  deceased  member,   by 
reason  of  a  provision  in  their  constitution  that  "  in  case  of 
the  death  of  a  brother,  there  shall  be  allowed  from  the  lodge 
a  sum  of  not  less  than  thirty  dollars,  to  defray  the  expense 
of  burial ;    which   shall  be  paid   over  without   delay  to   the 
deceased   brother's  nearest   of  kin."     The  court  said:  "The 
constitution  and  by-laws  of  the  lodge,  treating  them  as  articles 
of  a   voluntary  association,  do  not  amount  to  a  promise  to 
each  member  by  all  the  rest  to  pay  him  anything.     The  stipu- 
lation  in  the  by-laws  is  that,  on  the  death  of  each  member, 
there  shall   be  allowed  from   the  lodge  a  sum  not  less   than 
thirty  dollars,  to  defray  the  expense  of  burial,  to  be  paid  with- 
out delay  to  the  deceased's  nearest  of  kin.     The  payment  is 
for  that  purpose.     It  is,  if  any  promise  at  all,  a  promise  by 
each  member  to  contribute  by  periodical  and  other  payments 
toward  a  certain  fund  for  all  the  purposes  contemplated  by 
the  association,  including  money  to  be  paid  promptly  for  the 
expenses  of  burial,  to  be  done  usually  before  letters  testament- 
ary, in  case  of  a  will,  or  letters  of  administration,  in  case  of 
intestacy,  can  be  regularly  issued.     In  other  words,  the  prom- 
ise of   each  member  is  to  pay  money  to  the  lodge,  and  the 
lodo-e,  not  being  incorporated,  can  maintain  no  suit.     If  it  cre- 
ates any  right  which  can  be  recognized  by  law,  it  is  an  equitable 
rio-ht  only  to  a  share  in  a  common  fund,  raised  either  for  pur- 
poses purely  charitable,  or  for  their  joint  benefit,  and  can  only  be 
enforced  in  equity.     And  if  there  were  any  ground  for  such 
equitable  relief,  as  in  case  of  partners  in  a  joint  fund  raised  for  a 

'See  Richmond  v.  Judy,  6  Mo.  App.  400;  Gray  v.   Pearson,  L.  R.,  5  C.  P. 

465.  568;  Andrews  and  Alexander's  case, 

2See  Strong  v.  Harvey,  3  Bing.  304;  8  Eq.  176;  Burt  v.  Lathrop,  52  Mich. 

Redway  v.  Sweeting,  L.  R.,  2  Exch.  106;  Kuhlv.Meyer,  35  Mo.  App.  206. 


LIABILITY    OF    MEMBERS.  167 

special  purpose,  of  which  we  give  no  intimation,  such  equitable 
relief  could  be  sought  only  by  a  member  or  his  legal  representa- 
tive. But  supposing  this  stipulation  in  the  constitution  and 
by-laws  of  the  Lodge  to  amount  to  an  express  promise  to  pay 
thirty  dollars  upon  a  certain  conting  m  ■>'•  there  is  no  considera- 
tion for  such  promise  moving  from  the  plaintiff  to  the  defendant, 
or  from  any  person  acting  in  privity  with  him  or  acting  for 
his  use  or  benefit,  or  with  an  intent  and  purpose  to  obtain  a 
benefit  to  the  plaintiff .  There  is  no  ground  to  infer  from  the 
factsagreed,  that  the  son.  who  was  a  member  of  the  lodge  in 
paying  his  contributions  thereto  had  any  purpose  of  obtaining 
money  from  the  lodge,  in  case  of  his  death,  for  the  use  of  his 
father,  or  other  next  of  kin,  for  his  own  benefit;  to  whomso- 
ever it  might  be  paid,  under  these  provisions,  it  was  a  naked 
trust  for  defraying  the  charges  of  his  burial.  It  is,  therefore, 
nol  at  all  analogous  to  the  case  where  A  owes  J5  and  15  owes 
( '.  and  in  consideration  that  B  will  release  A,  he  promises  to 
pay  0.  Such  promise  is  valid,  and  C  may  sue  A  upon  it.  The 
reason  is,  that,  although  the  consideration  for  A's  promise  to 
C  does  not  move  from  C,  it  moves  from  A  for  C's  use  and  ben- 
efit."1 In  one  case  the  proof  showed  that  some  young  men 
organized  a  society  for  acting  plays,  and  thai  they  rented  a 
house  for  that  purpose,  and  agreed  to  pay  the  landlord  six  dol- 
lars a  month  rent  for  every  month  they  should  so  occupy  it. 
Harry  became  a  member  of  the  society  some  months  after  the 
contract.  The  courl  was  requested  to  charge  the  jury,  that 
if  the  contract  was  made  before  Barry  became  a  member  of 
the  society  he  was  not  hound  by  it.  This  the  court  refused, 
and  charged  thai  in  such  a  case  he  would  not  be  hound  forthe 
previous,  but  would  he  tor  the  subsequent  rent,  and  the  jury 
found  accordingly.  This  was  erroneous  under  the  state  of 
the  pleadings.  If  Barry  was  liable  at  all  for  the  rent  alter  he 
became  a  member  of  the  society,  it  was  not  upon  a  counl 
framed  upon  the  contract  originally  made,  nor  upon  an  indeb- 
itatus or  quantum  meruit  count  for  work  and  labor  done,  but 
upon  a  count  for  use   and  OCCUpal  ion.s 

31.     Liability  of  the  person  incurring  the  debt.     An 

'  Payne  v.  Snow.    12  Cosh.  (Mass.)    Hump.)  824;  see  Conn  v.  Borst,  36 
443.  Bun  (N.  5  .   562. 

•  Barry  v.   Nuckolls,   21  Tenn,  (2 


168  LIABILITY   OF   MEMBERS. 

unincorporated  society  can  not  be  a  party  to  a  contract,  or  to 
an  action  at  law.  The  persons  contracting  in  the  name  of 
such  an  organization  are  themselves  personally  liable,  either 
as  being  themselves  in  fact  principals,  or  as  holding  themselves 
out  as  agents  for  a  principal  which  has  in  law  no  existence. 
They  are  liable  for  debts  contracted  by  them  in  the  name  of 
such  society  with  a  stranger,  in  the  absence  of  any  agreement 
or  understanding  of  the  parties  to  the  contract  that  they  shall 
not  be  personally  liable  for  such  debts.1  It  is  a  general  prin- 
ciple that,  although  a  party  may  be  a  mere  agent,  and  known 
to  be  such,  yet  if  he  contracts  in  his  own  name,  or  in  his  name 
as  agent,  when  his  principal  is  incapable  of  contracting,  or  is 
irresponsible,  the  law  presumes  that  he  intended  to  bind  him- 
self.2 The  justice  of  this  rule  rests  on  the  principle  that  other- 
wise the  party  performing  the  service  would  be  remediless. 
If  the  agent  in  such  a  case  would  stand  exonerated,  he  must 
disclose  a  responsible  principal,  or,  by  contract,  exempt  himself 
from  personal  liability.  It  is  not  necessary  that  the  person  in- 
curring the  debt  for  the  benefit  of  an  unincorporated  society 
should  know  and  believe  at  the  time  that  he  is  incurring  a  per- 
sonal liability  or  indebtedness.  It  does  not  alter  the  question, 
that  he  at  the  time  contracted  as  an  officer  of  the  society.  His 
liability  springs  from  the  fact  that  he  had  no  principal,  no 
legal  association  or  body  which  he  could  represent,  act  for  or 
bind,  and  he  must  be  held  in  such  a  transaction,  at  least  as 
against  a  stranger,  to  have  represented,  acted  for  and  bound 
only  himself,  in  the  same  manner  and  to  the  same  extent  as  if 
there  had  been  no  assumed  authority  to  act  for  such  society.3 
Where  a  person  contracts  a  debt  for  such  a  society,  and  as  an 
officer  thereof,  the  termination  of  the  term  of  his  office  does 
not  relieve  him  from  liability.  Having  contracted  the  debt, 
he  is  bound  to  pay  it,  and  his  successor  in  office  is  not  a  suc- 
cessor in  that  sense  which  renders  him  liable  on  the  contracts 
of  his  predecessor.4 

In  one  case  it  was  held  that  where  the  committee  of  a  vol- 

'  Lewis   v.    Tilton,    64    Iowa    220;  2  Story  on  Agency,  §§281,  282. 

Heath  v.  Goslin,  80  Mo.  310;  50  Am.  3  Fredenthal  v.  Taylor,  26  Wis.  286; 

Rep.  505;   Doubleday   v.   Muskett,   7  Blakely  v.    Bennecke,    59   Mo.    193, 

Bing.  110;    Blakely  v.  Bennecke,  59  supra. 

Mo.  193;  Eichbaum  v.  Irons,  6  Watts  4Sizer  v.  Daniels,  66  Barb.  (N.  Y.) 

&Ser.(Pa.)67;  40  Am.  Dec.  540.  427. 


LIABILITY    OF   MEMBERS.  1G9 

untary  society  entered,  as  such,  into  a  contract  for  business  to 
be  done  on  behalf  of  the  society,  the  funds  proving  insufficient, 
all  the  acting  committee  were  personally  answerable,  on  the 
ground  that  the  credit  must  fairly  be  presumed  to  have  been 
given  to  them  rather  than  to  the  subscribers  at  large.1  AVhere 
four  members  of  an  unincorporated  church  society  signed  a 
call  to  a  pastor,  agreeing  to  pay  him  one  thousand  dollars  per 
year  for  his  services,  and  he  accepted  the  call  and  performed 
the  services  as  pastor  of  the  church,  the  signers  of  the  call 
were  held  personally  liable  for  the  promised  salary.9  The 
members  of  a  committee  appointed  by  an  unincorporated  so- 
ciety to  make  arrangements  for  a  public  exhibition  are  indi- 
vidually liable  for  work  necessary  for  the  occasion,  which  a 
sub-committee  of  their  number  procures  to  be  done,  although 
in  making  the  contract  the  sub-committee  assumed  to  act  as 
officers  of  the  association.3  Such  a  rule  is  salutary,  and  tends 
to  the  promotion  of  justice,  by  preventing  the  procurement  of 
services  from  too  incautious  laborers,  and  of  goods  from  too  con- 
fiding merchants,  by  putting  forward  an  irresponsible  com- 
mittee to  act  for  an  irresponsible  public  gathering.  "Where  a 
person  expressly  permitted  his  name  to  be  used  as  a  member 
of  a  committee  of  arrangements  for  a  ball  to  be  given  by  an 
association,  and  subscribed  to  some  of  the  preliminary  ex- 
penses, but  took  no  further  part,  and  did  not  attend  the  ball, 
it  was  held  that  he  was  not  liable  for  the  cost  of  a  supper  pro- 
vided for  the  occasion  without  his  knowledge  or  consent.4  In 
an  action  against  a  person  who  has  incurred  a  debt  on  behalf 
of  the  society,  it  is  always  competent  for  him  to  show  that  the 
debt  was  contracted  on  the  credit  of  the  funds  of  the  society. 
and  not  on  a  footing  of  his  personal  liability.  If  the  plaintiff, 
by  his  contract,  has  trusted  solely  to  the  state  of  the  funds. 
and  this  has  been  shown,  the  member  acting  on  behalf  of  the 
society  is  not  liable  unless  the  funds  have  been  collected. 

§  82.  Where  debt  is  incurred,  payable  out  of  the  funds 
of  the  society. — "Where  a  contract  is  made  between  members 
of  a  society  and  a  third  person,  by  which  the  members  agree 

'.Cullenv.  Duke,  1  Brown's  Ch.  101.  540,  supra;  McCarteev.  Chambers,  6 

•Thompson  v.  Garrison,  22  Kan.  Wend.  (N.  Y.)  849. 

766.  4  Downing  v.  Mann,  3  E.  D.  Smith's 

3  Fredendall    v.   Taylor,    23    Wis.  Rep.  (N.  Y.)  36. 


170  LIABILITY    OF    MEMBERS. 

to  pay  a  certain  sum  out  of  the  funds  of  the  society,  when 
they  shall  have  funds  applicable  to  his  demand,  the  conditional 
contract  becomes  absolute,  and  an  action  may  be  maintained 
against  the  members,  so  soon  as  they  receive  such  funds  in  the 
society.1  When  an  association  consists  merely  of  subscribers 
to  a  fund  for  a  common  object,  and  is  not  a  partnership,  it  is 
competent  for  the  members  of  the  association  to  contract  ex- 
pressly on  the  credit  of  such  fund,  and  to  limit  their  liability 
to  the  amount  of  such  fund,  which  may  be  applicable  to  the 
particular  debt.2  But  when  an  association,  which  is  under  its 
rules  and  scheme  a  partnership,  executes  a  note  containing  a 
promise  to  pay  "  out  of  their  joint  funds,  according  to  their 
articles  of  association,"  the  members  are  personally  liable  un- 
less it  appear  unequivocally  that  the  payee,  knowing  the  force 
and  effect  of  such  a  stipulation,  agreed  to  look  solely  to  the 
partnership  fund  for  payment.3  Partners  are  personally  liable 
for  the  debts  of  the  partnership,  and  the  limitation  of  their  lia- 
bility is  viewed  with  disfavor  by  the  law,  both  on  account  of  the 
opportunity  afforded  by  such  limitation  for  fraud  upon  unsus- 
pecting persons,  and  because  such  limitation  seeks  to  give  to 
partnerships  the  exemption  and  shield  of  corporations.  In  the 
case  of  simple  contracts,  where  the  party  has  looked  to  the 
anticipated  realization  of  funds  by  projectors  of  a  particular 
undertaking,  and  not  to  the  personal  liability  of  the  parties 
with  whom  he  has  contracted,  his  claim  is  confined  to  the 
fund,  and  he  can  not  enforce  payment  from  individuals;  and  if 
the  project  miscarries,  and  funds  are  not  realized,  he  has  no 
claim  upon  anybody  or  for  anything.4 

^  83.  Notice  to  creditors  of  withdrawal  from  the  society. 
— AVhere  a  body  of  men  associate  themselves  for  social  inter- 
course and  pleasure,  and  assume  a  name  under  which  they 
commence  to  incur  liabilities  by  opening  an  account,  they 
become  jointly  liable  for  any  indebtedness  thus  incurred;  and 
if  either  of  them  wishes  to  avoid  his  personal  responsibility  by 
withdrawal  from  the  body,  it  is  his  duty  to  notify  the  creditors 
of  such  withdrawal;  otherwise,  if  a  creditor  continues  to  fur- 

1  Higgins  v.  Hopkins,  3  Exch.  162.       4 1  Addison  on  Contracts,  pg,  289*, 

2  Landman  v.   Entwistle,  7  Exch.    186  Abbott's  notes. 
632. 

sHess  v.  Werts,  4  Ser.  &  R.  (Pa.) 
336. 


LIABILITY    OF    MEMBERS.  171 

nish,  in  good  faith,  articles  such  as  have  been  previously  pur- 
chased for  the  use  of  the  society,  his  responsibility  will  con- 
tinue, upon  the  same  principle  which  holds  retiring  partners 
to  liabilities  for  an  indebtedness  subsequently  contracted  with 
former  creditors.1  And  the  fact  that  a  member  moves  away 
from  the  town  or  city  in  which  the  society  meets  and  has 
property,  is  not  of  itself  an  abandonment  of  membership  and 
a  notice  of  withdrawal.2 

In  Park  v.  Spaulding,3  defendant  was  a  member  of  the  club 
at  the  time  the  account  was  first  opened  with  the  plaintiffs. 
He  was  one  of  the  committee  who  made  the  first  purchase  of 
the  plaintiffs,  and  he  never  notilied  plaintiffs  at  any  time  of 
his  withdrawal  from  the  club.  The  goods  thus  purchased  were 
sent  to  the  club-house,  and  came  into  the  possession  of  the 
steward,  who  subsequently  paid  the  plaintiffs  the  amount  of 
that  bill.  He  thereafter  continued,  as  such  steward,  to  act  in 
making  purchases  from  time  to  time  in  the  name  of  the  club; 
and,  although  a  private  arrangement  existed  by  which  the 
steward  had  agreed  to  make  these  purchases  himself,  and  to 
furnish  the  articles  to  the  members  of  the  club  on  his  own 
account,  yet  this  arrangement  was  never  communicated  to  the 
plaintiffs.  Upon  these  facts  the  defendant  was  held  liable  for 
the  debts  contracted  by  the  steward  in  the  name  of  the  club. 

§  81.  Actions  for  libel  and  slander— Privileged  commu- 
nications.— All  communications  by  members  of  corporate 
bodies,  churches  and  other  voluntary  societies,  addressed  to 
the  body  or  any  official  thereof,  and  stating  facts  which,  if 
tine,  are  proper  to  be  thus  communicated,  are  privileged. 
They  are  not  absolutely  privileged,  so  that  no  action  will  lie, 
even  though  it  be  averred  that  the  injurious  publication  was 
both  false  and  malicious,  but  are  conditionally  privileged  to 
this  extent,  that  the  circumstances  are  held  to  preclude  any 
presumption  of  malice,  but  still  Leave  the  party  responsible,  if 
both  falsehood  and  malice  are  affirmatively  shown.'  Words 
spoken  or  written  in  the  regular  course  of  church  discipline,  or 
before  a  tribunal  of  a  religious  society  to  or  of  members  of 
the  church  or  society,  are,  as  among  the  members  themselves, 

'Park  v.    Spaulding,   10  Hun  128;       8 10  Hun  (N.  Y.)  128. 
Tenney  v. Union, 3*3  Vt.  64.  *Cooley  <>n  Torts,  pg.  311-215;  Van 

9  Tenney  v.  Union,  supra.  Wyck  v.  Aspinwall,  17  N.  Y.  190. 


172  LIABILITY    OF   MEMBERS. 

privileged  communications  and  not  actionable  without  express 
malice.1  Among  the  powers  and  privileges  established  by  long 
and  immemorial  usage,  churches  have  authority  to  deal  with 
their  members  for  immoral  and  scandalous  conduct,  and  for 
that  purpose  to  hear  complaints,  to  take  evidence  and  to  de- 
cide, and  upon  conviction,  to  administer  proper  punishment  by 
way  of  rebuke,  censure,  suspension  and  excommunication. 
To  this  jurisdiction  every  member,  b}r  entering  into  the  church 
covenant,  submits,  and  he  is  bound  by  his  consent.2  When  a 
vote  of  excommunication  from  a  church  has  been  passed,  and 
the  offender  thereby  declared  to  be  no  longer  a  member,  the 
sentence  may,  nevertheless,  be  promulgated  by  being  read  in 
the  presence  of  the  congregation.3  Where  an  incorporated  so- 
ciety has  no  jurisdiction  to  expel  a  member  upon  a  certain 
charge  which  has  been  preferred  against  him,  its  proceedings 
in  such  a  case  are  coram  nonjudice;  and  if  the  charge  made 
against  the  member  is  libelous  under  ordinary  circumstances, 
a  resolution  adopted  and  entered  in  the  minutes  of  the 
proceedings,  expelling  the  member  for  such  cause,  is  a 
libel,  and  the  member  introducing  it  is  liable  to  an  action.4 
Where  a  report  is  made  by  a  subordinate  lodge  to  the  grand 
lodge  of  the  order,  in  accordance  with  the  usual  rules,  regu- 
lations and  customs  of  the  order,  by  a  member  of  a  special 
committee  thereof,  to  which  was  referred  a  petition  respecting 
the  expulsion  of  a  member  of  the  order  from  a  subordinate 
lodge,  justifying  the  subordinate  lodge  in  expelling  the  mem- 
ber for  perjury,  and  setting  forth  that  the  officers  of  the  sub- 
ordinate lodge  were  unanimously  of  the  opinion  that  the  state- 
ments sworn  to  by  such  member  in  a  petition  presented  by 
him  to  the  grand  lodge,  were  all  infamously  untrue,  and  where 
the  report  is  received  and  adopted  by  the  lodge  in  the  usual 
course  of  its  business,  and  thereafter  is  printed  and  published 
in  a  pamphlet  entitled  "  The  Grand  Lodge  Journal  of  1873," 
in  connection  with  the  general  and  ordinary  transactions  of 

1  Halliard  on  Torts,  355;  Lucas  v.    v.  Stevens,  51  Vt.  501;  31  Am.  Repts. 
Case,  9  Bush  (Ky.)  297;  Kershaw  v.    698,  note. 

Bailey,  1  Exch.  743.  3  Farnsworth    v.    Storrs,    5  Cush. 

2  Remington   v.  Congdon,  2   Pick.    (Mass.)  412. 

(Mass.)  310-315;  O'Donaghue  v.  Mc-       4Fawcett    v.    Charles,    13    Wend. 
Govern,  23  Wend  (N.  Y.)  26;  Serva-    (N.  Y.)  474. 
tius  v.  Pichel,  34  Wis.  292;  Shurtleff 


LIABILITY    OF    MEMBERS.  173 

the  lodge,  and  in  the  usual  manner  of  printing  and  publishing 
the  journal  of  the  records  and  proceedings  of  the  lodge,  for 
the  use  of  the  members  of  the  order,  such  publication  is 
prima  facie  privileged.  In  such  a  case  the  occasion  and  man- 
ner of  the  publication  prevent  the  inference  of  malice,  which 
the  law  draws  from  unauthorized  communications,  and  afford  a 
qualified  defense,  depending  upon  the  absence  of  actual  malice. 
In  such  a  case,  where  the  publishing  is  conditionally  privi- 
leged, and  where  the  circumstances  of  such  publication  are 
such  as  to  repel  the  inference  of  malice,  and  exclude  any 
liability  of  the  defendant  unless  upon  proof  of  actual  malice, 
the  burden  of  proof  upon  the  trial,  as  to  whether  the  defendant 
was  actuated  by  actual  malice,  is  upon  the  plaintiff.  If  the 
plaintiff  gives  no  evidence  of  express  malice,  the  defendant  is 
entitled  to  a  verdict.1 

In  an  action  for  slander  the  defendant  set  up  as  a  defense, 
that  plaintiff  and  defendant  were,  at  the  time  of  the  alleged 
publication,  members  of  an  association  known  as  the  Inde- 
pendent Order  of  Odd  Fellows ;  that  the  acts  charged  in  the 
allefi-ed  libel  were  violations  of  the  laws  of  said  order ;  and 
that  the  publication  complained  of  was  a  presentment  to  the 
.  lodge,  of  which  both  parties  were  members,  of  the  charges, 
for  the  purpose  of  having  the  truth  thereof  inquired  into,  and 
of  having  the  plaintiff  dealt  with  according  to  the  laws  of  the 
order.  The  court  said :  "  The  law  protects  the  defendant  so 
far  as  not  to  impute  malice  to  him  from  the  mere  fact  of  his 
having  spoken  words  of  the  plaintiff,  which  are  in  themselves 
actionable,  though  he  may  not  be  able  to  prove  the  truth  of 
his  allegations.  But  the  plaintiff  will  be  able  to  sustain  his 
action  for  slander  if  he  can  satisfy  the  jury  by  other  proofs, 
that  there  was  actual  malice  on  the  part  of  the  defendant,  and 
that  he  uttered  the  words  for  the  mere  purpose  of  defam- 
ing the  plaintiff.  *  *  The  law  simply  requires  that  there 
should  not  be  a  want  of  common  honesty  in  preferring  the 
charffe."  2  This  rule  is  stated  in  Addison  on  Torts  :  "Whether 
the  circumstances  under  which  a  communication  was  made 
constitute  a  privileged  communication  or  not,  is  a  question 
which  the  court  has  assumed  the  jurisdiction  of  determining, 

Kirkpatrick  v.  Eagle  Lodge,   26       2  Streety  v.  Wood,  15  Barb.  (N.  Y.) 
Kan.  384.  103. 


174  LIABILITY    OF   MEMBERS. 

but  if  there  is  any  dispute  about  these  circumstances,  the 
question  must  be  submitted  to  a  jury.  It  is  essential  to  the 
existence  of  the  privilege  and  protection  that  the  communica- 
tions, under  whatever  circumstances  made,  should  be  believed 
to  be  true  by  the  party  making  them;  for  a  person  can  not 
shelter  himself  under  privilege,  if  he  believes  the  charge 
imputed  untrue,  unless  he  at  the  same  time  declares  his  belief 
in  its  untruth.  If  a  man  knowingly  makes  a  false  charge, 
there  is  at  once  actual  malice,  and  the  privilege  is  blown  to 
the  winds." 

In  De  Senancour  v.  Societe  La  Prevoyance,1  it  is  said  :  "  The 
defendant  corporation  appointed  a  committee  to  investigate 
certain  bills  presented  by  the  plaintiff,  without  specially  di- 
recting or  authorizing  them  by  any  vote  or  regulation  of  the 
corporation  to  make  their  report  in  print ;  and,  in  the  absence 
of  any  usage  to  that  effect,  there  was  no  express  or  implied 
authority  to  the  committee  to  make  or  circulate  a  report  on  a 
subject  of  this  nature  in  print.  Such  an  act  can  not  be  said 
to  have  been  done  in  the  due  course  of  their  employment, 
there  being  nothing  to  show  or  to  raise  any  inference  that  the 
corporation  had  any  reason  to  expect  or  understand  that  it 
would  be  so  done.  The  committee,  however,  made  a  report  in 
print  at  a  regular  meeting,  by  placing  on  the  secretary's  desk 
printed  documents  or  reports,  which  were  then  freely  taken 
from  the  desk  by  members  present  in  the  meeting,  and  which 
were  libelous.  In  all  this  there  was  nothing  for  which  the 
corporation  was  responsible.  It  was  only  the  individual  acts  of 
the  committee,  and  of  certain  members.  The  omission  of  the 
secretary  to  prevent  members  from  taking  the  report  from  his 
desk,  was  not  sufficient,  as  matter  of  law,  to  put  upon  the  cor- 
poration the  responsibility  for  their  circulation.  All  that  the 
corporation  did  at  that  meeting  in  respect  to  the  report  was 
to  vote  to  hold  a  special  meeting  to  pass  upon  its  adoption. 
At  the  next  meeting  the  corporation  voted  to  adopt  the  report, 
but  this  was  not  a  publication  of  it,  and  no  fact  is  stated  which 
shows  that  the  corporation  gave  to  the  report  any  currency  or 
circulation,  or  any  sanction  to  its  previous  circulation.  It  is 
not  as  if  the  corporation,  after  adopting  the  report,  had  circu- 

1 146  Mass.  616;  16  N.  East.  Rep.  553;  6  N.  Eng.  Rep.  270. 


LIABILITY    OF    MEMBERS.  175 

lated  it.1  Under  these  circumstances,  there  was  no  evidence 
or  any  publication  of  the  libel  by  the  defendant.  The  court 
did  not  reach  the  question  of  privilege,  having  disposed  of 
the  case  on  the  ground  that  there  was  no  publication;  and  that 
question,  therefore,  is  not  to  be  considered  here."  An  action 
for  slanderous  words  spoken  of  and  concerning  the  plaintiff 
by  an  unincorporated  mutual  benefit  society,  of  which  he  was 
a  member  when  the  alleged  tort  was  committed,  will  not  lie 
against  the  society  sued  as  a  partnership,  but  the  redress,  if 
any,  is  against  the  wrong-doers  in  their  individual  or  non-part- 
nership capacity.  Nor  does  it  make  any  difference  in  this 
respect  that,  in  consequence  of  the  slander,  the  plaintiff  was 
suspended  from  the  benefits  of  membership  for  a  term  of 
years,  and  that  the  action  was  brought  pending  this  term  of 
suspension.  In  discussing  this  question  the  supreme  court  of 
Georgia  said:  "If,  as  the  declaration  alleges,  the  association 
was  a  partnership,  the  plaintiff  was  a  member  of  it,  and  after 
diligent  search  we  have  been  unable  to  discover  anv  authority 
supporting  the  theory  that  a  man  can  slander  himself,  either 
when  he  speaks  directly  as  an  individual,  or  when  he  speaks 
indirectly  through  a  partnership  of  which  he  is  a  member. 
Upon  principle,  we  do  not  see  how  he  could  charge  the  part- 
nership assets  with  the  damages  that  might  be  recovered,  he 
having  an  interest  in  the  assets  as  part  owner  of  the  same. 
X«>r  can  we  see  how  he  can  escape  the  general  rule  that,  in  an 
action  at  law  against  a  partnership,  all  the  partners,  so  far  as 
the  partnership  assets  are  involved,  must  be  defendants.  That 
rule,  applied  to  this  case,  would  require  the  plaintiff  to  sue 
himself.  The  equity  powers  of  thecourt  can  not  be  invoked 
to  overcome  this  obstacle,  for  a  court  of  equity  has  not,  nor 
never  had,  jurisdiction  to  decree  damages  for  defamation  or 
slander."3  Where,  by  statute,  suits  are  permitted  by  or 
against  a  treasurer  of  an  unincorporated  society,  with  like 
effect  as  if  all  the  members  are  or  were  sued,  "as  regards 
the  joint  rights,  property  and  effects"  of  such  society,  it  is 
doubtful  whether  such  statute  covers  a  suit  for  libel  published 

1  Raitroad  Co.  v.  Quigley,  01  How.       'Gilberl  v.Crystal  Fountain  Lodge, 
202;  Railway  Co.  v.  Conybeare,  0  II.    80  Ga  284;  1  S.  East  Rep.  U00. 
L.  Cas.  711,725. 


176  LIABILITY    OF    MEMBERS. 

by  a  society,  and  whether  it  is  not  confined  to  the  assertion  of 
property  rights,  strictly  so  called.1 

§  85.  Actions  between  members. — In  determining  the 
proper  remedy  of  members  of  an  unincorporated  society  against 
each  other,  it  is  necessar}7"  to  inquire  whether  the  rules  and 
scheme  of  the  society  create  a  partnership  or  quasi-partnership 
between  the  members.  If  the  liabilities  which  the  rules  and 
scheme  create  are  those  in  the  nature  of  copartnership,  the 
member  must  seek  his  remedy  against  his  fellow-member  un- 
der the  laws  of  partnership,  and  in  all  matters  growing  out  of 
the  relation  of  such  membership,  the  only  remedy  is  by  bill  in 
equity,  or  action  of  account.2  If  an  officer  of  the  society  or- 
der goods  for  the  society  from  a  fellow-member,  the  solution 
of  the  question  of  the  personal  liability  of  the  officer  is  not  to 
be  found  by  examining  the  cases  with  reference  to  the  liability 
of  officers  and  members  in  their  dealings  with  third  persons, 
but  by  looking  at  the  rules  of  the  society,  to  see  what  are  the 
liabilities  which  they  create.  If  it  be  found  that,  by  becom- 
ing a  member,  the  seller  did  not  lose  his  right  of  action  against 
any  other  member  for  goods  sold,  although  they  were  bought 
for  the  purposes  of  the  society,  he  may  sue  the  purchaser  and 
those  consenting  to  or  approving  the  purchase;  and  the  only 
question  which  can  then  arise  in  the  case  is,  whether  the  seller 
contracted  to  supply  the  goods  on  the  credit  of  the  purchas- 
ers, or  whether  he  looked  to  the  funds  of  the  society  for  pay- 
ment; and  this  is  a  question  of  fact  for  the  jury  to  determine. 
These  principles  are  clear,  but  the  application  of  them  to  the 
facts  in  each  individual  case  is  exceedingly  difficult.3  Where 
the  person  incurring  the  debt  on  behalf  of  the  society  and  the 
person  with  whom  the  debt  is  incurred  are  both  members  of 
the  same  unincorporated  voluntary  society,  and  where  the 
nature  of  the  agency,  and  the  extent  of  the  powers  of  the  repre- 
sentative of  the  society  are  known  to  the  creditor,  such  repre- 
sentative or  agent  is  not  individually  liable  for  the  debt.  A 
member  of  a  voluntary  society  formed  for  building  a  meeting- 
house, who  is  appointed  one  of  the  building  committee,  and 

'Duncan    v.    Jones,    32    Hun  12;  son  (N.  Y.)  401;  see  Chambers  v.  Cal- 

Rorke  v.  Russell,  2  Lansing  (N.  Y.)  houn,  18  Pa.  St.  13. 

244.  3Caldicot  v.  Griffith,  22  Eng.  L.  & 

2Niven  v.    Spickerman,  12  John-  Eq.  527;  8  Exch.  898. 


LIABILITY    OF   MEMBERS.  177 

acts  as  such  in  making  contracts  and  procuring  materials 
for  the  building1,  is  not  individually  liable  to  pay  for  services 
for  which  he  thus  contracts  with  a  member  of  such  society, 
who  knows  his  agency,  and  who  knows  that  the  contract  is  for 
the  benefit  of  the  society,  and  that  it  is  entered  into  by  him 
merely  as  such  agent.1  In  one  case  it  was  said :  "The  sub- 
scribers to  the  articles  of  agreement,  not  being  constituted  a 
society  under  the  statute  with  corporate  powers,  but  being  a 
mere  voluntary  association  of  individuals,  the  question  is 
whether  the  defendants,  who  acted  as  their  committee  in  super- 
intending the  building  of  the  meeting-house,  were  personally 
answerable  for  the  services  performed  by  the  plaintiff  upon 
it.  It  does  not  appear  that  the  defendants  made  any  express 
promise,  or  pledged  their  individual  credit  and  responsibility, 
so  as  thereby  to  impose  a  personal  obligation  upon  themselves- 
nor  does  it  appear  that  any  moneys  were  in  their  hands,  or  that 
any  funds  remained  at  their  disposal  to  answer  or  pay  for  the 
services.  They  were  appointed  by  the  body  of  the  subscribers 
to  execute  a  mere  trust;  were  bound  to  act  under  the  direction 
and  control  of  the  subscribers,  and  liable  to  be  removed  at  their 
pleasure;  and  it  appears  that  one  of  them  was  in  fact  removed 
and  another  appointed  in  his  place.  The  plaintiff  was  one  of 
the  subscribers  by  whom  the  defendants  were  appointed;  and. 
in  the  absence  of  any  express  contract  or  undertaking,  he  can 
have  no  legal  or  equitable  right  to  look  to  the  personal  security 
or  liability  of  the  defendants,  and  hold  them  answerable  out 
of  their  private  funds  for  work  done  by  him  for  the  benefit  of 
the  subscribers  generally.  Indeed,  as  the  subscribers  to  tin •  :i  r- 
ticles  of  -association  were  all  equally  interested  in  building  the 
meeting-house,  and  the  plaintiff  and  the  defendants  were  mem- 
bers of  the  association,  the  case  seems  to  fall  within  the  rule 
that  one  of  several  persons  jointly  concerned  in  a  common 
purpose  can  not  maintain  an  action  against  all  or  any  of  the 
others  for  work  and  labor  performed  for  their  joint  benefit 
In  Holmes  v.  Higgins,8  where  a  number  of  persons  associated 
together  for  the  purpose  of  obtaining  an  act  of  parliament  and 
making  a  railway,  and  subscribed  for  shares  of  £50  each,  it 
was  held  that  they  were  partners  in  the  undertaking,  and  that 

'Abbott  v.  Cobb,  17  Vt.  593.  21  Barn.  &Cres.  74. 

12 


ITS  LIABILITY    OF   MEMBERS. 

a  subscriber,  who  acted  as  their  surveyor,  could  not  maintain 
an  action  for  work  done  by  him  in  character,  against  all  or  any 
of  the  subscribers." 

Where  the  defendant  purchased  a  steamer,  and  had  it  repaired, 
in  the  expectation  of  selling  it  to  an  association  of  which  he 
and  the  plaintiffs  were,  or  were  to  be,  members,  he  was  held 
liable  in  an  action  at  law  to  the  plaintiffs,  for  such  repairs, 
whether  the  vessel  was  sold  to  and  employed  by  the  associa- 
tion or  not.  But  if  the  repairs  were  made  by  the  plaintiffs  upon 
an  agreement  or  understanding  between  the  defendant  and  the 
plaintiffs,  that  the  association  was  to  pay,  or  that  the  plaintiffs 
should  look  to  the  association  for  payment,  then  he  is  not 
liable  therefor  in  such  an  action.  Where  the  question  is,  on 
whose  credit  was  the  labor  done  and  materials  furnished,  each 
party  has  the  right  to  ask  for  instructions  based  on  his  view 
of  the  case,  if  the  evidence  relied  on  be  legally  sufficient  to 
warrant  the  conclusion  sought  to  be  deduced  from  it.1  An 
action  at  law  will  not  lie  by  one  member,  in  his  right  of  mem- 
bership and  as  the  assignee  of  other  members,  against  a  con- 
tractor with  the  association,  who  is  also  a  member,  upon  his 
contract  with  the  society.  Xo  member  has  an  interest  in  the 
property  and  effects  of  the  society,  which  can  be  separated  and 
taken  out  of  the  whole  for  his  sole  use,  until  the  joint  affairs 
are  settled,  the  society  dissolved,  the  mutual  rights  of  the 
members  adjusted,  and  the  ultimate  share  of  each  determined. 
In  any  agreement  made  by  a  contracting  party  with  the  asso- 
ciation as  such,  and  in  any  right  of  action  arising  thereon, 
each  member  has  an  interest,  but  no  member  has  an  interest 
which  he  can  transfer,  so  that  an  action  can  be  maintained  by 
his  assignee.  In  such  an  agreement  the  defendant  member 
has  as  great  an  interest  as  any  other  member.  A  court  of 
equity,  with  all  the  parties  before  it,  can  grant  appropriate 
relief  in  such  cases.2  Where  the  constitution  of  an  unincor- 
porated society  defined  its  object  to  be  to  stimulate  a  healthy 
interest  in  the  breeding  and  management  of  pigeons  and  ban- 
tams, and  to  disseminate  useful  knowledge  in  relation  thereto, 
gave  the  board  of  directors  the  charge  and  management  of  all 
public  exhibitions  of  the  society,  and  provided  that  each  mem- 
ber should  pay  an  initiation  fee  and  an  annual  assessment;  and 

1  Wells  v.  Turner,  16  Md.  133.  s  McMahon  v.  Eauhr,  47  N.  Y.  67. 


LIABILITY    OF    MEMBERS.  179 

the  society  held  a  public  exhibition  and  awarded  premiums, 
and  the  expenses,  including  premiums,  were  greater  than  the 
receipts,  a  bill  in  equity  may  be  sustained  by  those  members 
who  paid  the  deficiency,  against  other  members  for  contribu- 
tion, if  the  defendants  participated  in  a  vote  to  give  the  exhi- 
bition with  premiums,  or  if  they  assented  to  such  vote.1 

§  86.  Liability  of  members  in  Pennsylvania. — In  Penn- 
sylvania it  was  held  that  members  of  an  unincorporated 
mutual  benefit  society  were  jointly  and  severally  liable  to  pay 
sick  benefits  to  co-members,  but  the  act  of  April  28,  18T6,  of 
that  state,  declares  that  members  of  beneficial  societies  "  shall 
not  be  individually  liable  for  the  payment  of  periodical  or  fu- 
neral benefits  or  other  liabilities  of  the  lodge  or  other  organiza- 
tions," and  provides  that  "  the  same  shall  be  payable  out  of 
the  treasury  of  such  lodge  or  organization."  Notwithstand- 
ing the  above  act,  such  associations  still  continue  to  be  part- 
nerships. The  act  simply  limits  the  remedy.  It  exonerates 
the  members  from  all  individual  liability,  and  confines  the 
execution  to  the  partnership  property.  An  action  at  law  may 
be  maintained  against  the  members,  but  the  remedy  is  limited.2 

§  87.  Liability  of  members  suspended  by  statute  in  New 
York. — The  New  York  Code  of  Civil  Procedure,  at  section 
1919,  provides  that  an  action  or  special  proceeding  may  be 
maintained  against  the  president  or  treasurer  of  an  unincor- 
porated association,  consisting  of  seven  or  more  persons,  upon 
any  cause  of  action  upon  which  the  plaintiff  may  maintain 
such  an  action  against  all  the  ass<  x-iates  by  reason  of  their  inter- 
est or  ownership,  either  jointly  or  in  common,  on  their  liability 
th  •  re  Cor,  either  jointly  or  severally.  Any  partnership  or  other 
company  of  persons  which  has  a  president  or  treasurer  is  deemed 
an  association  within  the  meaning  of  this  section.  When 
an  unincorporated  association,  consisting  of  more  than  seven 
members,  has  been  formed,  and  has  adopted  by-laws  and  elected 

'Ray  v.  Powers,  134  Mass.  22;  see  Notos  of   Ca8ea  (Pa#)  317;  Kurz  v 

also  Tyrrell   v.   Washburn,  88  Mass.  Eggert,  9  Id.  126;    Paul  v.  Keystone 

466;  Murray  v.  Walker,  83  Iowa  202;  Lodge,  3  [d.   108;    Commonwealth  v 

48  N.  W.  Rep.  10.  Volz,  14  Id.  289. 

2  Pritchett  v.   Schafer,   2  Weekly 


180  LT ABILITY    OF   MEMBERS. 

a  treasurer,  an  action  can  not  be  maintained  against  the  indi- 
vidual members  thereof  upon  a  debt  due  from  the  association, 
unless  an  action  has  first  been  brought  against  its  president  or 
treasurer,  as  prescribed  by  this  section.1 

1  Flagg  v.  Swift  et  al.,  25  Hun  (N.  628;   see  Tibbits  v.  Blood,   21   Barb. 

Y.)  623,  criticising  and  distinguishing  650,  and  Schmidt  v.  Gunther,  5  Daly 

Park  v.  Spaulding,  10  Hun  128;  With-  452;  McCabe  v.  Goodfellow,  15  N.  Y. 

erhead  v.  Allen,  4  Abb.  Ct.  App.  Dec.  Supp.  377. 


CHAPTER  VI. 

SUITS  BY  OR  AGAINST  AN  UNINCORPORATED  SOCIETY. 

§  88.  Proper  parties  to  an  action. 

89.  Actions  by  society  or  a  member  to  recover  property. 

90.  Right  of  society  to  exclusive  use  of  its  name. 

91.  Injunction  restraining  libel  on  society. 

92.  Judgment  against  an  unincorporated  society. 

§  88.  Proper  parties  to  actions. — The  old  rule  was  that, 
in  suits  by  or  against  an  unincorporated  voluntary  society, 
whatever  the  number  of  its  members,  or  the  nature  or  extent 
of  the  objects  undertaken,  the  society  was  looked  upon  as  in 
the  nature  of  a  partnership,  and  all  the  members  were  neces- 
sary parties.  But  by  statute,  both  in  this  country  and  in 
England,  this  rule  has  been  modified  to  suit  the  exigencies  of 
modern  practice.  It  would  serve  no  useful  purpose  to  recite 
in  this  treatise  the  exact  changes  which  each  state  has  made 
in  the  old  rule,  and  it  is  only  necessary  here  to  state  the  mod- 
ern, sometimes  called  the  equity  rule.  If  the  members  of  the 
society  are  so  numerous  that  they  can  not  be  made  parties  to 
the  cause  with  any  chance  of  bringing  it  to  a  hearing,  in  con- 
si  "(juence  of  abatements  and  like  difficulties,  suit  may  be 
brought  in  the  name  of  one  or  more  for  the  use  of  all,  or  two 
or  three  members  may  be  made  defendants  to  represent  the 
interests  of  all.1  If  there  should  be  two  or  more  classes  of 
members  who  have  separate  or  conflicting  interests,  then  a 
small  number  may  be  selected  from  each  class  to  represent 
that  interest  in  the  same  way  as  if  the  whole  class  had  been 
brought  before  the  court.  It  sometimes  happens  that  there  is 
a  class  of  members  in  a  society  who  have  conflicting  interests 
with  the  others ;  then  the  plaintiffs,  if  the  class  to  which  they 
belong  is  very  numerous,  put  forward  two  or  three  of  their 
number,  who  sue  on  behalf  of  themselves  and  all  the  others 

•Eiggett  v.  Ladd,  17  Oregon,  89;  21  Pac.  Rep.  133. 

(181) 


182         SUITS    BY   OR    AGAINST    AN    UNINCORPORATED    SOCIETY. 

of  that  class,  and  make  the  other  members  defendants, 
who  have  conflicting  interests;  or,  if  the  defendants  are 
numerous,  make  some  of  them  defendants  on  behalf  of  the 
rest.1  A  statute  provided  that  "  when  the  question  is  one 
of  a  general  or  common  interest  of  many  persons,  or  where 
the  parties  are  very  numerous  and  it  may  be  imprac- 
ticable to  bring  them  all  before  the  court,  one  or  more 
may  sue  or  defend  for  the  whole."  Plaintiffs  sued  "  on  behalf 
of  themselves  and  the  other  stockholders  of  the  association, 
who  may  come  in  and  contribute  to  the  expense  of  the  suit." 
The  court  held  that  the  complaint  showed  a  compliance  with 
the  statute,  and  said :  "  If  the  plaintiffs  could  have  required 
from  all  other  parties  interested  who  may  come  in  and  avail 
themselves  of  the  benefit  of  the  action,  to  contribute  to  the 
expense,  stating  this  condition  in  the  complaint  can  not  affect 
their  rights  in  this  particular,  or  prevent  them  from  prosecut- 
ing the  action.  The  liability  to  share  the  expense  was  the 
practice  in  the  court  of  chancery;  it  has  not  been  abolished,  or 
in  any  way  affected  by  the  recent  legislative  changes  in  our 
practice.  *  *  One  or  more  parties,  therefore,  of  a  numer- 
ous class,  have  a  right  to  state  that  they  sue  for  the  benefit 
of  the  whole,  or  of  those  interested,  who  may  come  in  and 
contribute  to  the  expense." 2  Where  one  party  brings  a  suit, 
under  such  a  statute,  for  the  benefit  of  many  having  a  common 
interest,  but  too  numerous  to  be  brought  before  the  court,  it 
is  sufficient  if  they  are  described  with  as  much  certainty  as 
the  nature  of  the  controversy  will  admit.3  To  enable  a  mem- 
ber to  bring  a  suit  in  his  own  right,  and  on  behalf  of  others 
having  a  common  interest,  it  is  not  sufficient  to  allege  that  the 
other  parties  are  so  numerous  that  it  would  be  impracticable 
to  bring  them  all  before  the  court,  but  the  nature  of  their 
common  interest  must  appear  to  be  such  as  would  entitle  them, 
were  they  all  before  the  court,  to  maintain  the  action  in  their 
own  right,  or  in  their  own  names."     In  an  action  against  an  un- 

1  Bromley   v.  "Williams,    32   Beav.        2  Dennis  v.  Kennedy,  19  Barb.  517; 
177;  1  Daniell's  Ch.  Pr.  27;  Pearce  v.  Stadler  v.  District  Grand  Lodge,  3 
Piper,  17  Ves.  1;  Cockburn  v.  Thomp-  Am.  L.  Rec.  589. 
son,  16  Ves.  321;  Story's  Eq.  Plead-       3Sourse  v.  Marshall,  23  Ind.  194. 
ing,  §§75,  107;  Phipps  v.  Jones,  20       4Habicht  v.    Pemberton,  4  Sand- 
Pa.  St.  230;   Maguire's  Estate,  7  W.  ford's  Repts.  (N.  Y.)  C57. 
N.  C.  214. 


SUITS    BY    OR    AGAINST   AN    UNINCORPORATED    SOCIETY.         1S3 

incorporated  society,  except  when  the  statute  permits  it  to  be 
sued  in  the  name  adopted  by  it,  the  members  are  the  proper 
parties;  but  where  the  trustees  only  are  sued,  if  they  are  mem- 
bers, the  defect  is  one  of  parties  only,  is  waived  if  not  objected 
to,  and  the  trustees  will,  after  judgment,  be  presumed  to  have 
been  members.1 

In  the  absence  of  statutory  regulation  permitting  an  unin- 
corporated society  to  sue  or  to  be  sued  in  the  name  by  which  it 
is  commonly  designated,  the  members  must  sue  or  be  sued  as 
partners  or  persons  jointly  interested.  The  court  will  not 
permit  them  to  sue  or  to  be  sued  in  the  character  of  a  society, 
nor  will  courts  of  equity  lend  their  aid  to  petitioners  coming 
before  them  in  such  a  character.  It  is  the  exclusive  preroga- 
tive of  government  to  create  corporations,  and  to  invest  them 
with  power  to  sue,  as  such,  by  their  corporate  name;  and  upon 
principles  of  policy  the  courts  of  the  country  do  not  sit  to  de- 
termine upon  charters  granted  by  persons  who  have  not  the 
prerogative  to  grant  charters.2  In  Lloyd  v.  Loaring,3  Lloyd 
and  two  other  persons,  "  cm  behalf  of  themselves  and  all  other 
members  of  the  Caledonian  Lodge  of  Free  Masons,  except  the 
defendant,  LoaTing,''  brought  their  bill  to  obtain  certain  chat- 
tels belonging  to  the  lodge.  On  demurrer  to  the  bill  for  want 
of  parties,  Lord  Eldon  declined  to  hear  argument  in  support  of 
the  demurrer,  and,  in  allowing  it,  in  the  course  of  his  opinion, 
snid  :  "  How  is  this  court  to  take  notice  of  these  persons  as  a 
society?  A  bill  might  be  filed  for  a  chattel,  the  plaintiffs  stat- 
ing themselves  to  be  jointly  interested  with  several  other  per- 
sons, but  it  would  be  very  dangerous  to  take;  notice  of  them 
.is  : i  society,  having  anything  of  constitution  in  it.  *  *  It 
is  the  absolute  duty  of  courts  of  justice  not  to  permit  persons 
not  incorporated  to  affect  to  treat  themselves  ;is  incorporated 
on  the  record.  *  *  I  desire  my  ground  to  be  understood 
distinctly.  I  do  not  think  the  court  ought  to  permit  persons 
who  can  only  sue  as  partners,  to  sue  in  u  corporate  character, 

ami  that  is  the  effect  of  this  bill."* 

Where  a  suit  in  chancery   was    brought    in    the  names  of 

■Matpon  v.   Wentworfh,  4  Cin.  L.  bury,  1  Brown's  Chancery  Cases  101; 

Bull.  518.  Pearce  v.  Piper,   IT  Vesey  1:   Cock- 

*  Story's  Eq.  PI.  g  497.  burn   v.   Thompson,    16    Vesey  821; 

:i6  Vesey.  Jr.,  77:5.  Beaumont     v.     Meredith,    2    Ves.  & 

4 See  Cullen  v.  The  Duke  of  Queens-  Beames  180. 


184         SUITS    BY    OR   AGAINST    AN    UNINCORPORATED    SOCIETY. 

"  Jonah  Pipe  and  William  II.  Humphreys,  who  sue  in  behalf 
of  themselves,  and  many  other  persons  too  numerous  to  bring 
before  the  court,  constituting  the  members  of  the  British  Emi- 
grant Mutual  Aid  Society,"  it  was  held  that  the  petitioners 
were  not  entitled  to  relief  in  the  character  in  which  they  sued, 
that  a  mere  voluntary  society,  without  franchises,  could  not 
sue  in  the  character  of  a  society  possessing  corporate  rights, 
and  that  the  bill  must  be  dismissed  for  want  of  proper  par- 
ties.1 Where  a  written  promise  to  pay  money  is  made  to  "  the 
treasurer  of"  an  unincorporated  society,  no  action  may  be 
maintained  by  the  treasurer  against  the  promisor.  To  main- 
tain that  the  treasurer  has  a  right  to  an  action  in  such  a  case 
would  be  to  put  him  upon  the  same  ground  which  he  would 
occupy  if  the  society  had  been  incorporated  and  made  capable 
by  its  charter  of  suing  in  the  name  of  whoever  might  be  its 
treasurer,  on  instruments  made  payable  to  the  treasurer. 
Such  a  capacity  to  maintain  an  action  can  be  conferred  by  a 
charter  only.  In  such  a  case  the  members  of  the  society  are 
the  proper  parties  to  bring  suit.2 

§  89.  As  to  actions  by  a  society  or  a  member  for  recov- 
ery of  its  property. — A  member  of  an  unincorporated  society 
can  not  maintain,  in  his  name,  for  the  benefit  of  the  society, 
an  action  on  a  note  given  to  or  held  by  the  society,  without 
showing  by  his  complaint  or  declaration  that  he  is  the  general 
agent  of  the  society,  or  that  he  is  specially  authorized  to  bring 
the  suit  for,  and  on  behalf  of  the  society,  and  without  further 
showing  that,  under  the  contract  and  agreement  by  which  the 
members  are  formed  into  and  united  as  a  society,  the  members 
themselves  have  a  legal  title  to  maintain  the  suit.  The  right 
to  maintain  the  action  must  be  shown  to  be  in  both  the  mem- 
bers at  large  and  the  member  suing.  Although  the  complaint 
or  declaration  avers  that  the  society  is  unincorporated,  it  by 
no  means  follows  that  its  individual  members  have  a  right  to 
maintain  an  action  in  their  own  names,  and  for  their  own  ben- 
efit, upon  every  security  given  to  the  society,  or  to  third  per- 
sons for  account  of  it.  Their  right  to  do  so  must  depend  upon 
the  nature  of  the  association,  and  the  terms  and  conditions  of 

JPipe  v.   Bateman,   1    Iowa,   369;   82;    Piggott  v.  Thompson,  3  Bos.  & 
Chambers  v.  Calhoun,  18  Pa.  St.  13.    Pull.  Repts.  146. 
2  Ewing  v.  Medlock,  5  Porter  (Ala.) 


SUITS    BY    OK   AGAINST    AN    UNINCORPORATED    SOCIETY.        185 

the  agreement  by  which  its  members  are  united.  Although 
the  society  is  not  incorporated,  its  members  are  not  necessarily 
either  partners  or  joint  owners.  They  may  have  only  an 
equitable,  and  that  only  an  eventual  and  contingent  interest 
in  the  property  and  funds  of  the  society,  and  to  permit  them  to 
appropriate  these  to  their  own  immediate  use,  by  a  recovery  in 
their  own  names,  or  by  one  on  behalf  of  the  others,  might  be 
to  aid  them  in  deceiving  the  public,  and  defrauding  creditors. 
These  observations  show  not  only  the  propriety  but  the  neces- 
sity of  requiring  that  the  contract  or  agreement  by  which  the 
members  are  formed  into  and  united  as  a  society  shall  be  set 
forth,  as  the  only  means  of  enabling  the  court  to  determine 
whether  they  have  a  legal  right  to  maintain  the  suit;  and 
whether  a  member  suing  on  behalf  of  the  society  has  such  an 
authority  as  will  enable  him  to  bring  suit  in  his  own  name  for 
its  property  is  a  question  of  law,  which  can  only  be  determined 
when  the  whole  nature  and  terms  of  his  authority  shall  be  set 
forth.1 

An  unincorporated  society,  organized  for  purely  benevolent 
and  social  purposes,  carrying  on  no  business,  provided  in  its 
constitution  and  by-laws  that  its  funds  should  be  solely  under 
the  control  of  its  members  in  good  standing.  All  the  members 
in  good  standing  joined  in  an  assignment  to  plaintiff  of  all 
their  right  to,  and  interest  in,  its  funds,  and  authorized  him  to 
bring  suit  against  defendants,  who  had  appropriated  them  to 
their  own  use.  It  appeared  that  at  the  time  of  the  assign- 
ment there  were  many  members  in  arrears,  and  not  in  good 
Btanding,  who  had  originally  contributed  to  the  fund,  and  who 
could,  under  the  rules,  resume  their  rights  as  members  by 
paying  arrearages.  In  a  suit  by  the  plaint  ill'  against  the  de- 
fendants to  recover  the  funds,  it  was  held  that  plaintiff  was 
ch.t  lied  with  a  good  title  and  had  a  right  to  sue  under  such  an 
assignment  and  authorization,  that  the  contributing  members 
who  were  not  in  good  standing  had  no  legal  interest  in  the 
funds,  but  only  an  interest  contingent  on  paying  arrearages, 
and  that  the  organization  was  not  a  copartnership,  the  rights 
of  whose  members  could  be  settled  only  in  equity,  and  thai  a 
verdict  for  plaintiff  was  warranted."     The  revocation  by  a  su- 

1  Habicht  v.  Pemberton,  supra.        41  N.   W.  Rep.   921;     see  Kuhl  v. 

2  Brown  v.  Stoerkel,  ~A  Mich.  269;   Meyer,  85  Mo.  App.  806. 


186        SUITS    BY   OR   AGAINST   AN    UNINCORPORATED    SOCIETY. 

preme  lodge  or  council  of  the  social  charter  of  a  local  lodge 
does  not  deprive  the  local  lodge  of  the  right  to  sue  for  and 
collect  debts  due  it,  since  such  right  springs  from  the  laws  of 
the  state  and  not  from  the  rules  and  regulations  of  the  society.1 
Trustees  de  facto  of  a  society,  whether  incorporated  or  not, 
may  maintain  an  action  against  a  trespasser  for  an  injury  to 
the  property  of  the  society.2  If,  under  the  agreement  of  as- 
sociation, the  trustees  of  an  unincorporated  society  have  power 
to  collect  money  from  its  members,  they  niay  sue  to  recover 
the  money  if  it  is  not  paid.3 

§  90.  Right  of  an  unincorporated  society  to  the  exclusive 
use  of  its  name. — The  dissatisfied  members  of  an  unincor- 
porated voluntary  society  can  not,  by  incorporating  themselves, 
deprive  the  unincorporated  society  of  the  right  to  use  its  own 
name;  and  a  temporary  injunction  for  that  purpose  will  not  be 
granted.4  An  action  will  lie  on  behalf  of  an  unincorporated  so- 
ciety to  enjoin  a  part  of  its  members  from  procuring  the  incor- 
poration of  a  society  under  the  name  used  by  it.5 

§  91.  Injunction  restraining  libel  on  society. — An  in- 
junction will  be  granted  upon  an  interlocutory  application  to 
restrain  the  publication  of  matter  tending  to  injure  a  friendly 
society.  An  honorary  member  of  a  friendly  society,  having 
for  its  object  the  assurance  of  sums  of  money  to  defray  the  ex- 
penses of  the  funeral  of  deceased  members,  issued  a  circular 
among  the  clergymen  of  the  parishes  in  which  the  society  had 
district  lodges,  stating  in  the  circular  matters  which  were 
false  at  the  time  of  framing  and  issuing  the  circular,  and  were 
calculated  to  injure  the  business  interests  of  the  society.  Upon 
motion  in  an  action  by  the  trustees  of  the  society  against  the 
honorary  member,  an  injunction  was  granted  restraining  the 
issue  of  the  circular  until  the  trial  of  the  action.8 

§  92.  Judgment  against  an  unincorporated  society. — 
Where  a  society  is  proceeded  against  by  mandamus  or  kin- 

1  Wells  v.  Monihan,  129  N.  Y.  161;  4  Black  Rabbit  Association  v.  Mun- 
29  N.  East.  Rep.  232,  affirming  13  N.  day,  21  Abb.  New  Cases  (N.  Y.)  99; 
Y.  Supp.  156;  see  Wicks  v.  Monihan,  Henry  v.  Deitrich,  84  Pa.  St.  286;  see 
130  N.  Y.  232;  29  N.  East.  Rep.  139;  §  12. 

affirming  8  N.  Y.  Supp.  121.  6McGlynn  v.  Post,   21   Abb.  New 

2  Green  v.  Cody,  9  Wend.  414.  Cases  97.' 

s  Humphreys  v.  Company,  10  N.  6Hill  v.  Hart-Davis,  47  L.  T.  R. 
Y.  Supp.  461.  (N.  S.)  82. 


SUITS   BY   OR   AGAINST   AN   UNINCORPORATED   SOCIETY.         1S7 

dred  action,  by  a  name  not  inappropriate  as  a  corporate  des- 
ignation, and  the  application  is  resisted  by  it  in  that  name  and 
no  denial  of  its  corporate  character  is  contained  in  the  papers, 
it  will  be  presumed  that  it  is  in  fact  a  corporation.'  But  if  the 
society  is  in  fact  an  unincorporated  society,  in  the  absence'  of 
statutory  regulation,  a  judgment  against  it  will  be  null  and 
void.  Such  a  judgment  is  not  a  recovery  against  any  person, 
either  natural  or  artificial.  The  sale  on  execution  on  such  a 
judgment  of  property  held  in  the  name  of  the  society  would  be 
a  nullity.  "Where  suit  is  brought  against  a  member  of  an  un- 
incorporated society,  he  may  not  plead  a  former  recovery  in 
an  action  against  the  society,  under  the  nanm  by  which  it  is 
commonly  designated.  The  society,  having  no  legal  existence, 
could  not  represent  its  members  in  a  suit  against  it.  and,  as  the 
member  was  not  a  party  to  the  proceeding,  such  a  plea  would 
constitute  no  defense.2. 

'Doyle  v.    Benevolent  Society,    3    84   111.  459:   Stoddard   v.    Onondago 
Hun  (N.  Y.)361;  Barbaro  v.  Occiden-    Conference,  12  Bail).  (N.  Y.)  570. 
tal  Grove,  4  Mo.    App.  429;  United       2  Ash  v.  Guie,  97  Pa.  St.  493. 
States  Express  Company  v.  Bedbury,. 


CHAPTER  VII. 

OFFICERS. 

§  93,  94.     Election  of  officers. 
95,  96,  97,  98.     Powers  and  duties. 
99.     Salaries,  fees,  commissions. 

100.  Liabilities  of  officers. 

101.  Official  bonds,  rights  and  liabilities  of  sureties. 

102.  Liability  of  new  sureties. 

103.  Liability  on  a  bond  to  a  state. 

§  93.  Election  of  officers. — Power  to  elect  officers  and  to 
conduct  business  through  their  agency  pertains  to  an  incorpo- 
rated society,  and  need  not  be  expressly  conferred  upon  it. 
This  power  is,  generally  speaking,  in  the  society  at  large,  but 
may  be  lodged  in  its  board  of  directors.  Where  the  charter 
of  a  society  authorizes  the  election  of  its  "  directors  or  man- 
agers at  such  time  and  place,  in  such  manner,  as  may  be  speci- 
fied in  its  by-laws,"  a  by-law  authorizing  its  members  to  vote 
at  all  elections  either  in  person  or  by  proxy,  is  valid.  Unless 
custom  had  ruled  it  otherwise,  a  member  of  a  society  could 
not  vote  by  proxy  by  the  civil  law.  It  was  so  held  because  of 
the  mischief  and  inconvenience  which  might  arise  from  hav- 
ing a  few  members  manage  the  affairs  of  the  society.1  The 
common  law  required  all  votes  to  be  given  in  person,  and 
when  that  is  a  part  of  the  law  of  the  land,  and  there  is  no 
statute  authorizing  votes  to  be  cast  by  proxy,  the  society  may 
not  make  provisions  for  voting  by  proxy.2  But  it  has  been 
held  that  provisions  of  the  by-laws  of  an  incorporated  society 
for  voting  by  proxy  are  matters  of  internal  regulation  and  con- 
venience, with  which  courts  will  not  interfere,  even  though 
that  mode  of  voting  is  not  sanctioned  by  any  statutory  pro- 
vision.3    Where  at  an  election  of  directors  of  an  incorporated 

1  Ayliffe,  Civil  Law,  202.  42;     Commonwealth    v.    Binghurst, 

2  Taylor  v.    Griswold,  2  Green  (N.    103  Pa.  St.  134;  49  Am.  Rep.  119. 
J.)  222;  Craig  v.   Church,  88  Pa.  St.       3  State  v.  Tudor,  5  Day  329. 

(188) 


OFFICERS.  189 

mutual  benefit  society,  the  only  objection  made  was  as  to  the 
right  of  members  to  vote  by  proxy,  it  was  held,  on  quo  w<m-- 
rcmto  proceedings  against  the  directors  elected,  in  the  absence 
of  proof  that  the  persons  executing  the  proxies  were  members 
of  the  society,  or  that  the  proxies  were  properly  executed,  that 
it  would  be  presumed  that  the  proxies  were  regular  and 
proper.1  A  statute  provided  that  the  affairs  of  mutual  benefit 
societies  should  be  managed  by  not  less  than  live  directors 
elected  from  and  by  the  members.  The  manager  and  secre- 
tary of  a  society  were  at  first  appointed  by  its  trustees,  but 
afterward  a  resolution  Avas  adopted  providing  for  their  elec- 
tion annually  by  the  members.  Blank  applications  for  mem- 
berships had  printed  on  them  blank  proxies,  authorizing  the 
person  whose  name  should  be  inserted  to  act  and  vote  for  the 
member  at  all  meetings,  and  underneath  such  blank  proxies 
was  a  request  to  the  applicant  to  sign  it  in  blank  to  be  filled 
up  by  the  secretary.  In  accordance  with  this  request,  a  great 
number  of  such  proxies  were  so  signed  and  sent  to  the  secre- 
tary. The  resolution  above  mentioned  was  adopted  mainly 
by  the  use  of  such  proxies.  From  the  time  this  resolution  was 
adopted  the  board  of  trustees  practically  ceased  to  control  the 
affairs  of  the  society.  The  governing  authority  was  in  the 
manager  and  secretary,  who  held  a  sufficient  number  of  these 
proxies  to  perpetuate  themselves  in  office,  and  who  conducted 
its  business  as  they  saw  fit.  This  was  held  to  be  a  violation  of 
law,  and  a  fraud  on  the  members.3  When  all  the  voters  at  an 
election  held  by  a  society  were  members  in  good  standing,  en- 
titled to  vote,  the  fact  that  the  polls  were  kept  open  alter  the 
time  prescribed  by  the  constitution  and  by-laws,  will  not 
avoid  the  election.3  An  election  of  a  treasurer  of  a  voluntary 
association  by  the  board  of  directors,  on  whom  that  power  is 
conferred  by  the  constitution  and  by-laws,  is  void,  where 
notice  of  the  meeting  was  not  given  to  all  the  directors,  and 

1  People  v.  Crossley,  69  111.  10.">.  135.  Concerning  the  election  of  of- 
8 Chicago  Mutual  v.  Hunt,  127  111.  ficers,  see  People  v.  Railroad  Co.,  55 
257;  20  N.  East,  Rep.  55.  Barb.  (N.  Y.)  344;  Partridge  v.  Bad- 
8  Rudolph  v.  Southern  Beneficial  ger,  25  Barb.  (N.  Y.)  146;  Owen  v. 
League,  1  N.Y.  Supp.136;  People  v.  Whitaker,  20  N.  J.  Eq.  122;  Johnston 
Hosmer,  2  How.  Pr.  (X.  S.)  472;  v.  Jones.  28  N.  J.  Eq.  216:  1  Water- 
People  v.  Railroad  Co.,  7  Abb.  Pr.  (N.  man  on  Corp.  §58;  State  v.  Bonnell, 
S.)  205;  In  re  Railroad  Co.,  19  Wend.  35  Oh.  St.  10. 


190  OFFICERS. 

the  terms  of  office  of  some  of  those  participating  in  the  elec- 
tion had  not  commenced;  and  the  old  treasurer  is  entitled  to 
retain  the  books,  papers,  and  moneys  of  the  association,  as 
against  the  person  so  elected.1 

§  94.  On  the  trial  of  a  quo  warranto  proceeding  in  which 
the  issue  is  on  the  legality  of  the  election,  evidence  may  be 
given  of  conversations  and  transactions,  threats  and  con- 
federacies of  members  previous  to  the  election,  if  they  were 
connected  with,  and  might  have  had  an  influence  on  it.2 
Where  the  charter  gave  to  the  society  power  "  to  make  rules, 
by-laws  and  ordinances,  and  to  do  everything  needful  for  the 
good  government  and  support "  of  the  society,  it  was  held 
that  the  society  had  power  to  make  a  by-law  vesting  the 
appointment  of  inspectors  of  their  elections  in  the  president  of 
the  society,  and  to  make  a  by-law  prohibiting  tickets  from 
being  counted  at  an  election,  which  had  other  things  on 
besides  the  names.  And  it  is  a  violation  of  such  a  by-law  as 
last  above  mentioned,  to  have  an  eagle  engraved  on  such 
tickets.3  When  the  mode  of  electing  officers  is  not  regulated 
by  the  charter,  a  corporation  may  make  by-laws  to  regulate 
the  election.4  Where  an  office  in  a  society  is  not  created  or 
expressly  authorized  by  state  law,  but  is  one  created  by  an 
unincorporated  society,  and  filled  by  election  by  a  body  which 
possesses  no  corporate  powers  or  functions,  the  courts  of  the 
state  have  no  authority  whatever  over  the  office,  or  over  the 
election  to  it.  These  are  controlled  exclusively  by  such 
society,  and  the  decisions  of  the  society  upon  the  legality  or 
the  result  of  such  elections  are  final.  Such  an  office  can  not 
be  made  the  subject  of  quo  warranto  proceedings.6 

Where  two  elections  for  trustees  of  a  religious  incorpo- 
rated society  were  held  on  the  same  day,  one  held  before 
persons  designated  in  the  manner  customary  with  the  con- 
gregation, and  held  at  the  usual  place,  and  the  other  at 
another  place,  the  persons  having  a  majority  of  votes  at  the 
election  conducted  at  the  usual  place,  and  in  the  usual  manner, 
are  to  be  considered  as  duly  elected  over  others  voted  for  at  a 

1  Grand  Rapids  Guard  v.  Bulkley,  3  Commonwealth  v.  Woelper,  sn- 
97  Mich.  610;  57  N.  W.  Rep.  188.  pra. 

2  Commonwealth    v.     Woelper,     3       4  Newling  v.  Francis,  3  T.  R.  189. 
Ser.  &  R.  (Pa.)  29.  6  Ter  Vree  v.  Geerlings,  55  Mich.  562. 


OFFICERS.  101 

different  place  of  election,  though  the  persons  holding  the 
latter  election  were  excluded  from  the  usual  place  of  election, 
and  though  the  latter  had  a  majority  of  all  of  the  votes  cast 
at  both  places  of  election.1  Plaintiffs  and  defendants  were 
originally  members  of  the  voluntary  society  known  as  "The 
Ancient  Order  of  Hibernians,"  which  consisted  of  national, 
state,  and  local  bodies.  Under  its  constitution,  members  of  a 
local  "  division  "  were  members  of  the  national  organization, 
and  a  withdrawal  from  the  latter  severed  the  connection  of  a 
member  with  the  former,  also.  Any  member  could  withdraw 
by  paying  bis  dues  and  giving  written  or  verbal  notice  of  his 
intention  to  do  so.  A  schism  arose  in  the  order,  and  a  new 
organization  of  seceding  members  was  formed,  which  repudi- 
ated connection  with,  or  obedience  to,  the  old  society,  both 
national  and  state.  Defendants  united  with  the  new  order, 
and  plaintiffs,  though  a  minority  of  the  division,  reorganized 
it,  and  elected  officers  in  lieu  of  the  seceding  members,  who 
comprised  all  the  officers  but  one.  The  reorganized  division 
was  recognized  by,  and  retained  its  relations  with,  the  old 
national  organization.  The  seceding  officers  no  longer  pre- 
tended to  act  as  officers  of  the  old  division.  It  was  held  that 
as  it  was  apparent  the  seceders  no  longer  intended  to  act  as 
officers,  vacancies  existed,  and  the  remaining  members  had  the 
power  to  fill  them  by  elections,  and  the  division  was  not 
dissolved.9 

In  svery  case  of  corporations  created  by  statute,  so  far  as 
the  statute  directs  and  provides,  it  must  rule;  but  in  cases  pre- 
termitted   by  the    statute,    there    are    numerous    principles  of 

common  law  which  apply,  and  guide  and  sustain  the  corpora- 
tion; and  to  ward  off  their  application,  it  would  be  necessary 
for  the  legislature  to  use  negative  expressions,  or  such  as  would 

exclude  those  general  rules  of   law.      It  is  one  of  1  hose  general 

rules  that  it  a  corporation  fails  to  elect  officers  on  its  corpo- 
rate flay  or  time,  still  the  corporation  does  not  cease;  the  old 
officers  retain  their  powers,  and  may  act  until  they  are  super- 
seded by  a  new  appointment.  Such  officers  are  subjeci  to 
liability  on  their  bonds  as  much  after,  as  before  the  time  for 
which  they  were   elected   expires,  it  they  continue  to  act.  and 

1  Juker  v.  Commonwealth,  20  Pa.  'McFaddeu  v.  Murphy,  149  Mass. 
St.  48-4.  341;  21  N.  East.  Rep.  868, 


192  OFFICERS. 

no  subsequent  election  has  taken  place.1  The  decision  of  a 
court  of  law  upon  a  quo  warranto  or  mandamus  operates  in 
rem,  and  may  remove  or  oust  any  one  from  an  office  which  he 
holds,  but  a  court  of  equity  has  no  jurisdiction  to  remove  an 
officer  from  the  possession  of  his  office  or  to  declare  such  office 
forfeited.  But  when  a  court  of  equity  has  jurisdiction  in  a 
suit  it  is  competent  to  inquire  into  and  decide  the  question  of 
the  right  to  an  office,  or  of  the  regularity  of  an  election  when 
that  question  arises  incidentally.3 

§  95.  Powers  and  duties. — In  the  absence  of  express  pro- 
visions in  the  charter  of  a  mutual  benefit  society,  limiting 
the  appointment  of  its  officers  and  agents  or  the  scope  of  their 
powers  and  duties,  it  must  be  presumed  that  each  person,  in 
becoming  a  member  of  the  society,  impliedly  consents  that  it 
shall  be  represented  by  such  officers  and  agents  as  are  reason- 
ablv  necessary  for  the  transaction  of  its  business,  and  that 
they  shall  possess  the  powers  and  perform  the  duties  ordinarily 
possessed  and  performed  by  such  officers  and  agents.  While 
it  is  not  competent  for  the  officers  and  agents  to  relieve  a 
member  from  the  payment  of  any  assessment  properly  made 
on  him,  it  is  competent  for  them  to  mitigate  the  terms  upon 
which  his  contract  would  otherwise  become  forfeited.  In 
regard  to  regular  insurance  companies,  it  is  well  settled  that 
ao-ents  may,  by  acts  binding  on  the  company,  waive  the  causes 
of  forfeiture  declared  in  the  policy,  and  there  is  no  reason 
why  the  principle  may  not  also  apply  to  mutual  benefit  socie- 
ties, where  the  waiver  does  not  substantially  impair  the  rights 
of  the  other  members.3  It  will  be  presumed  that  the  officers  of 
a  mutual  benefit  society  have  such  powers  as  are  generally  exer- 
cised by  officers  of  other  corporations.  Persons  acting  publicly 
as  officers  of  a  society  are  presumed  to  be  rightfully  in  office. 
If  officers  of  an  incorporated  society  openly  exercise  a  power 
which  pre-supposes  a  delegated  authority  for  the  purpose,  and 
other  corporate  acts  show  that  the  corporation  must  have  con- 
templated the  legal  existence  of  such  authority,  the  delegated 
authority  for  their  acts  will  be  presumed.     The  president,  sec- 

1  Weir  v.  Bush,  4  Littell  (Ky.)  430;  3  Protection  Life  v.  Foote,  79  111. 
People  v.  Runkel,  9  Johnson  Rep.  147.    361. 

2  Johnson  v.  Jones,  23  N.  J.  Eq. 
216;  Doremus  v.  Church,  2  Green's 
Ch.  332. 


OFFICERS.  193 

retary  or  other  general  officer  of  a  society,  when  in  the  dis- 
charge of  the  duties  of  his  office,  represents  the  society  itself, 
and  has  power,  prima  facit ,  to  do  any  act  which  the  directors 
could  authorize  or  ratify.1  He  rmoy  waive  the  prompt  pay- 
ment of  an  assessment,  and  the  valid  exercise  of  such  a  power 
does  not  depend  upon  the  particular  place  where  he  may  be  at 
the  time.  The  true  test  of  his  authority  to  bind  the  society 
is  not  whether  he  acts  in  its  general  office,  or  in  another  state 
from  that  in  which  the  general  office  is  situated,  but  whether 
at  the  time  he  is  engaged  in  the  discharge  of  the  general 
duties  of  his  office  and  in  the  business  of  the  corporation.'2 
He  may  by  his  acts,  after  knowledge  of  an  existing  cause  of 
forfeiture,  waive  the  forfeiture,  and  estop  the  society  to  take 
advantage  of  it.s  His  promise,  made  in  the  discharge  of  his 
general  duties,  is  binding  on  the  society.4  He  may  waive  the 
prompt  payment  of  assessments.6 

The  statement  of  the  secretary  of  a  mutual  benefit  society 
to  a  member,  that  he  need  not  pay  his  dues  until  certain  charges 
pending  against  him  were  disposed  of,  is  binding  on  the  so- 
ciety." Notice  from  the  secretary  of  a  society,  whose  duty  it 
is  to  send  it,  is  notice  from  the  society,  and  it  is  bound  by  his 
nets.7 

The  application  of  a  deceased  member  of  a  society  was  wit- 
nessed by  a  special  instituting  officer,  who  was  present  at  the 
institution  of  the  subordinate  council  to  which  the  deceased 
belonged,  and  performed  the  duties  of  the  secretary  of  such 
subordinate  council,  as  a  secretary  had  not  been  elected.     The 

1  Leslie  v.  Lorrilard,  110  N.  Y.  510;  Supp.  985;  Ken  yon  v.  Association,  100 

18  N.  East.  Rep.  363;  Holmes  v.  Wil-  N.  Y.  017:  25  N.  East  Rep.  299;  Mc- 

lanl,  125N.  Y.  75;   25  N.   East.  Rep.  Corkle  v.  Association,  71  Texas  149; 

ins::-.  Rathbunv.Snow,  L23N.  V.  843;  ss.  \V.  Rep. 516;  Van  Houton  v.  Pine, 

25  N.  East.  Rep.  879;  Hastings  v.  Ins.  0  Stew.  Eq.  133;  38  N.  J.  Eq.  70. 

Co.,188N.Y.473;34  N.  East.  Rep.289;         National  Mutual  v.  .1 a,  84  Ky. 

Mor.  Priv.  Corp.,  ;>:  251   258.  110;  2  S.  W.  Rep.  447:  Loughridge  v. 

Hastings  v.  Ins.  Co.,  supra.  Association,  sl   Iowa  ill:  50  N.  W. 

3  Lindsey  v.  Society,  84  Iowa  734;  Rep.    ."itiS;  Mallory  v.  Insurance  Co., 
50  N.  W.  Rep.   0!):    Grand  Lod^e   v.  90  Mich.  HO:  .">l  N.  W.  Rep.  188. 
Brand,  00  Neb.  644:  46  X.  W.  Rep.  •  Jones  v.  Association,  84  Ky.  110; 
95;   .Morrison  v.  <>iM  Fellows..')!)  Wis.  0  S.  W.  Rep.  447;  True  v.  Association. 
J62;  Warnebold  v.  Grand  Lodge,  83  78  Wis.  287;   17  N.  \V.  Rep.  520. 
Iowa  28;  48  N.  W.  Rep.  1009.  :  Olmstead  v.  Farmers'  Mutual,  50 

4  Keeler  v.  Association,  20   N.  Y.  Mich.  000. 

13 


19-JL  OFFICERS. 

instituting  officer  was  charged  with  no  duty  respecting  the 
application,  except  to  see  that  it  was  in  proper  form  when  it 
was  passed  to  the  supreme  council,  of  which  he  was,  however, 
no  officer.  The  grand  council,  of  which  he  was  an  officer,  had 
nothing  to  do  with  the  benefit  fund,  nor  was  he  by  law  charged 
with  the  duty  of  instituting  councils,  or  receiving  applications 
for  membership.  It  was  no  part  of  his  duty  to  pass  on  the 
qualifications  of  beneficiaries,  and  there  was  no  officer  on 
whom  such  duty  did  devolve.  This  officer  had  heard  that  the 
beneficiary  was  not  a  niece  of  the  member,  as  set  forth  in  the 
application,  but  testified  that  he  had  no  personal  knowledge  on 
the  subject,  and  did  not  recollect  paying  any  attention  to  the 
statement  in  the  application  to  the  effect  that  she  was  his 
niece.  The  society  was  not,  under  these  circumstances,  es- 
topped from  showing  that  the  beneficiary  was  not  a  niece  of 
the  deceased.1  When  the  trustees  of  a  secret  society  are  vested 
with  general  power  to  manage  its  property,  a  lease  of  the  lodge 
room  to  another  society  for  use  on  one  night  in  each  week  is 
not  beyond  their  power,  and  is  valid.2 

§  96.  Where  the  organic  law  of  a  society  or  the  charter 
procured  from  the  state  under  that  law,  prescribes  what 
classes  of  persons  may  become  beneficiaries  of  its  insurance,  it 
is  not  in  the  power  of  an  officer  of  the  society  to  enlarge  or 
restrict  these  classes.3  ISTo  restriction  contained  in  the  charter 
may  be  waived  by  an  officer.4 

§  97.  Mutual  benefit  societies  and  stock  companies  are 
essentially  different  in  their  plans  of  carrying  on  the  business 
of  life  insurance.  Societies  have  many  by-laws  which  are  a 
part  of  the  contract  of  insurance,  and  which  are  binding  on  all 
members,  whether  officers  or  not.  They  are  conducted  on 
principle  of  mutuality,  and  should  give  insurance  to  each 
member  on  the  same  terms,  conditions  and  restrictions.  It 
would  be  destructive  of  this  equality  in  the  contracts  of  insur- 

11  Supreme  Council  v.Green,  71  Md.  Mutual  v.  Eolfe,  76  Mich.  146;  Hy- 

263;  17  Atl.  Eep.  1048.  singer  v.    Supreme    Lodge,   42  Mo. 

2  Phillips  v.  Aurora  Lodge,  87  Ind.  App.  627. 

505.  4Luthe  v.    Ins.    Co.,  55  Wis.    543; 

3 Kentucky     Masonic    v.     Miller's  Belleville  Mutual  v.  Van  Winkle,    1 

Adm'r,  13    Bush  (Ky.)  489;  Eindge  Beasley  (N.  J.)  333. 
v.  Ins.  Co.,  146  Mass.  286;  Michigan 


OFFICERS.  195 

ance  to  give  to  an  officer  the  power  to  waive  the  provisions  of 
a  by-law  which  relates  to  the  substance  of  the  contract.  Asa 
general  rule,  an  officer  of  a  mutual  benefit  society  has  no 
authority  to  waive  a  strict  compliance  with  the  by-laws  on  the 
part  of  a  member.  The  society  has  power  to  establish  by-laws, 
and  it  is  the  imperative  duty  of  the  member  to  comply  with  them. 
Where  the  laws  of  a  society  provided  that  its  by-laws  should 
in  no  case  he  altered,  unless  previous  notice  of  such  intended 
alteration  was  given  as  prescribed,  and  it  should  be  voted  for 
by  two-thirds  of  all  the  members  presentat  that  meeting,  it  was 
held  that  the"  president  had  no  right  in  any  case  to  suspend  or 
change  the  by-laws  by  his  verbal  act,  and  at  his  pleasure,  and 
thai  a  member  was  chargeable  with  notice  that  he  had  no  such 
right.1  An  officer  of  a  mutual  benefit  society  has  no  authority,  as 
a  general  rule,  to  waive  a  strict  compliance,  on  the  part  of  a 
member,  with  its  by-laws.  This  rule,  however,  does  not  extend 
to  those  by-laws  which  relate  to  the  clerical  transaction  of  its 
business,  or  to  the  mode  of  establishing  its  liability.  By-laws 
in  regard  to  proof  of  deatb  of  a  member,  for  instance,  may  be 
waived.  But  it  is  well  settled  that  the  officers  of  such  a  soci- 
ety have  in.  authority  to  waive  those  of  its  by-laws  which  relate 
to  the  Bubstance  of  the  contract  between  it  and  a  member, 
determine  the  relations  of  the  members  to  each  other,  or  in  any 
manner  fix  the  rights  and  liabilities  of  the  parties.2  The 
by-laws  of  a  society  provided  that  no  person  should  be  eligible  to 
membership  who  was  under  twenty-one.  or  over  sixty  years  of 
age.  For  the  purpose  of  procuring  insurance  as  a  member,  a 
person  represented  that  he  was  fifty-nine  years  old,  when  in 
fact  he  was  sixty-four  years  of  age.  It  was  claimed  after  his 
death  that  the  treasurer  of  the  society  had  received  assess- 
ments after  he  had  knowledge  of  t  he  decedent's  t  rue  age.  The 
court  held  that  the  evidence  failed    to  show  that    the  treasurer 

had  acquired  any  knowledge  or  information  of  the  false  repre- 
sentation while  in  the  discharge  of  any  official  duty,  and  said  : 

'  Hal.'  ▼.  Mechanics'  Mutual,  6 Gray  Mulrey  v.  Ins.  Co.,  t  Allen    116;  Ev- 

169;  Baxter  v.  Los.  Co.,  I  Allen  SJ94;  ana   r.  Ens.  Co.,  9  Allen  839;  Harvey 

Hall    v.  .Merrill.   17   Minn.  360;    Bee  v.  Grand    Lodge,   50   Mo.  App.  473; 

£  147.  Lyon    v.    Supreme     Assembly,    153 

* Burbank  v.  Association,  144 Mass.  Mass.   83;  36   N.  Bast  Rep.  386;  see 

184;  it  N.  East.    Rep.,  691;   Swetl  v.    Grand  Lodg.  r.J ,50111.  Aj? p.  101. 

Society,  78  Me.  541;  7  Ail.  Rep.  :!!J4; 


196  OFFICERS. 

"  But  assuming  that  the  treasurer  acquired  notice  of  the  fact, 
when  he  received  the  assessments,  he  had  no  power  to  ratify 
the  invalid  contract.  He  could  not  admit  a  member,  and 
thereby  make  a  contract  of  insurance,  and  if  he  had  no  power 
to  make  such  a  contract  for  the  corporation,  he  had  no  power 
to  validate  a  void  contract  by  any  act  of  ratification." l 
Where  a  by-law  provided  that  only  persons  between  twenty 
and  fifty-one  years  of  age  were  eligible  to  membership,  and  the 
application  of  decedent  stated  that  he  was  about  forty-nine 
years  old,  when  he  was  in  fact  over  fifty-one  years  of  age,  it 
was  held  that  even  though  the  officers  of  the  society  knew  his 
age  and  attempted  to  waive  the  by-law,  they  could  not  do  so.2 

A  mutual  fire  insurance  company  issued  a  policy  to  its  treas- 
urer on  a  house  owned  by  him.  The  policy  contained  several 
conditions,  but  not  all  of  the  by-laws  of  the  society.  The 
treasurer  afterward  sold  the  house  and  lot  to  the  complainant, 
and  assigned  the  policy  to  him.  The  complainant,  during  the 
negotiations,  in  the  presence  and  hearing  of  the  secretary, 
asked  the  treasurer  whether  the  policy  contained  all  the  con- 
ditions of  insurance.  He  replied  that  it  did,  and  the  secretary 
remained  silent.  After  the  house  had  burned,  complainant 
brought  an  action  at  law  on  the  policy,  to  which  the  society 
pleaded  a  by-law  not  mentioned  in  it.  He  had  violated  this 
by-law,  and  thereby  forfeited  all  right  of  recovery.  It  was 
held  upon  these  facts  that  as  the  officers  of  a  society  could  not 
waive  its  by-laws,  it  was  not  estopped  by  the  treasurers  state- 
ment to  complainant,  or  by  the  secretary's  silence,  when  the 
statement  was  made.3  But  in  one  case  it  was  held  that  where 
the  by-laws  provide  that  no  one  over  the  age  of  fifty  years 
may  become  a  member  of  the  society,  this  qualification  may 
be  waived  by  the  society.4 

Neither  the  majority  of   the   members,  nor   the  board  of 

1  Swett  v.  Society,  78  Me.  541;  7  and  the  insured,  knowing  the  restrie- 
Atl.  Rep.  364.  tion,  conspired  to  falsely  represent 

4 McCoy  v.  Ins.  Co.,  152  Mass.  272;  that  the  applicant  was  under  that 
25  N.  East.  Rep.  289.  age,  the  society  is  not  bound  by  the 

3  Miller  v.  Association,  42  N.  J.  Eq.  acts  of  the  agent,  and  there  is  no 
457;  7  Atl.  Rep.  895.  waiver  of  the  by-law.     Hanf.  v.  As- 

4  Morrison  v.  Odd  Fellows,  59  Wis.    sociation,  76  Wis.  450;  45  N.  W.  Rep. 
162;  18  N.  W.  Rep.  13;  contra.  Mc-    315;  see  Supreme  Council  v.  Boyle, 
Coy  v.  Ins.  Co.,  152  Mass.  272;  25  N.    (Ind.  App.);  37  N.  East.  Rep.  1105. 
East.  Rep.  289.    But  where  the  agent 


OFFICERS.  197 

directors  hare  a  right  to  disregard  a  by-law  which  has  been 
properly  passed.  It  must  be  lived  up  to  until  repealed  or 
amended. 

In  one  case  the  by-laws  restricted  membership  to  persons 
between  certain  ages.  Applicant  was  ineligible  but  misstated 
his  age,  and  the  secretarv  knew  of  the  misstatement.  The 
by-laws  also  provided  that  "in  case  a  certificate  of  member- 
ship has  been  issued  upon  an  application  fraudulent  or  false  in 
any  statement  therein,  the  secretary  shall  cancel  the  certificate 
and  return  the  money."  Instead  of  acting  under  this  by-law, 
the  secretary  continued  to  make  assessments  on  the  member, 
and  the  court  held  that  the  course  pursued  was  an  effectual 
waiver  of  the  restriction  as  to  a^e.1 

An  officer  may  not  waive  prepayment  of  the  membership 
fee  or  an  assessment,  and  declare  the  contract  binding,  where 
the  by-laws  require  prepayment  before  the  contract  shall  be- 
come effective."  Where  the  by-laws  make  it  the  imperative 
duty  of  officers  to  literally  and  rigorously  enforce  forfeitures 
for  non-payment  of  assessments  on  the  day  fixed,  the  members 
are  each  bound  by  such  provisions. 

Where  the  constitution  of  a  supreme  body  sets  forth  the  only 
method  of  re-instating  a  member  after  he  has  been  suspended. 
the  officers  of  a  subordinate  lodge  may  not  waive  these  re- 
quirements.3 

§  98.  The  failure  of  the  officers  of  a  mutual  benefit  associa- 
tion to  keep  correct,  and  intelligible  books  of  accounts,  whether 
such  failure  results  from  design,  carelessness,  or  want  of  skill, 
is  a  serious  breach  of  official  duty.  Such  olficers  are  trustees, 
having  funds  intrusted  to  their  care,  to  be  safely  and  honestly 
kept  and  administered,  not  for  their  OWE  benefit,  but  solely  for 
the  promotion  of  the  laudable  objects  for  which  the  associa- 
tion is  organized.  It  is  a  duty  of  primary  importance,  incum- 
bent on  all  trustees,  to  keep  proper  accounts  of  trust  funds; 
for  unless  that  is  done  the  beneficial  owners  of  such  funds  are 
subjected  to  constant   uncertainty  as  to  their  rights,  and  to  a 

1  Morrison  v.  Odd  Fellows.  59  Wis.  s  Brewer  v.  Ins.  Co.,  14  Gray  iMass.) 

162.    In  this  case  the  court  expressly  SOS. 

states    that    the    secretary    bad  the  ''Grand  Lodge  v.  Jesse,  50  111.  App. 

power  to  waive  the  restriction  as  to  101. 
age.     See  Supreme  <  kmncil  v.  Boyle, 
Ind.  App.;  37  N.  East.  Rep.  1105. 


198  OFFICERS. 

constant  liability  to  be  defrauded.  Next  to  the  duty  of  hon- 
estly administering  a  trust  fund  is  that  of  keeping  a  true, 
honest,  and  intelligible  account  of  such  administration.1  It 
was  held  that  the  officers  of  a  society  were  guilty  of  fraud 
upon  the  members  in  issuing  certificates  of  membership  num- 
bered higher  than  the  total  number  of  certificates  issued  up  to 
that  date;  and  it  was  no  excuse  that  such  false  numbering  was 
done,  not  to  deceive  new  members,  but  merely  to  prevent  rival 
associations  from  ascertaining  the  state  of  the  business.  No 
attempt  having  been  made  to  apprise  applicants  of  the  truth, 
the  effect  was  fraudulent.2  Where  an  officer  of  a  society  ren- 
ders a  false  statement  of  its  affairs  to  an  officer  of  the  state,  to 
whom  he  is  required  by  law  to  make  a  report,  or  where  he  sup- 
presses facts  which  ought  to  have  been  stated  in  such  a  report, 
he  is  guilty  of  fraud  and  should  be  removed.3 

§  99.  Salary,  fees,  commissions. — Where  there  is  no 
agreement  between  the  society  and  one  of  its  officers,  that  he 
is  to  receive  any  salary  for  his  services,  the  right  to  such  com- 
pensation must  depend  upon  the  usage  in  like  cases.  Where  an 
officer  has  not  only  made  no  charge  against  the  society  from 
time  to  time,  as  he  has  made  reports  to  it  of  his  stewardship, 
but  has,  as  shown  by  the  minutes  of  the  proceedings,  received 
the  thanks  of  the  society  for  his  gratuitous  and  able  management 
of  the  affairs  under  his  control  as  such  officer,  it  must  be  held 
that  he  may  not  charge  the  society  for  such  services.4  Trustees 
of  a  society,  having  voted  to  themselves  and  accepted  desig- 
nated sums  of  money  as  compensation  for  their  services  for  par- 
ticular years,  have  no  power,  in  subsequent  years  of  their  serv- 
ice, to  vote  themselves  "  back  pay  "  for  their  services  during 
such  former  years.  Such  trustees  have  no  authority,  by  virtue 
simply  of  their  trusteeship,  to  act  for  or  bind  their  society, 
except  in  their  aggregate  and  administrative  capacity  as  a 
board ;  and  whore  they  assume,  by  virtue  of  their  trusteeship, 
to  act  in  the  separate  and  individual  capacity  of  treasurer, 
secretary,  or  as  general  or  special  agent  of  their  association, 
they  can  not  thereby  create  against  it  a  iegal  liability  to  com- 
pensate  them  as  trustees  for  such   services.     Such   trustees, 

'Chicago  Mutual  v.  Hunt,  127111.  3 Chicago  Mutual  v.  Hunt,  supra. 
257;  20  N.  East.  Rep.  55.  4  Vestry  and  Wardens  v.  Barksdale, 

2  Chicago  Mutual  v.  Hunt,  supra.    1  Strob.  Eq.  (S.  Car.)  197. 


OFFICERS.  199 

unless  specially  invested  with  the  additional  capacity  and 
authority  of  officers  or  agents,  are  limited  in  their  claims  for 
compensation  to  such  sums  as  will  reasonably  compensate 
them  for  the  time  and  expense  incurred  in  going  to,  attending, 
and  returning-  from  their  official  meetings,  and  for  their  serv- 
ices while  in  session.1  Trustees  are  charged  with  the  duty  of 
faithfully  executing  the  trust  which  the  laws  and  regulations 
impose  on  them.  They  are  entitled  to  a  reasonable  compen- 
sation for  the  service  rendered;  but  any  plan  or  scheme  by 
which  money  is  collected  from  members  by  assessment  or 
otherwise,  with  a  view  to  their  individual  profit,  and  beyond 
what  is  necessary  to  defray  the  reasonable  expenses  of  exe- 
cuting the  trust,  is  a  I  trench  of  trust.2  Where  officers  and 
directors  of  a  mutual  benefit  society,  engaged  in  the  business 
of  issuing  wagering  policies,  have  divided  among  themselves 
the  surplus  funds  of  the  society  as  compensation  for  their  own 
services,  a  decree  may  he  entered  against  the  officers  and  direct- 
ors jointly,  in  favor  of  a  receiver  appointed  on  dissolution  of 
the  company,  for  the  amount  of  the  funds  fraudulently  misap- 
propriated.3 

The  salaries  of  officers  of  voluntary  societies  must  not. 
especially  when  the  officers  fix  the  amount  of  their  own  sala- 
ries, he  out  of  proportion  to  the  amount  of  responsibility  and 
labor  devolving  upon  them.  And  where  it  is  shown  that  ths 
officers  of  the  society  seem  to  regulate  their  salaries  rather  by 
the  condition  of  its  expense  fund  than  by  the  compensation 
actually  earned,  courts  will,  upon  application,  interfere  to 
protect  the  interests  of  the  members.4  A  corporation  can  not 
avail  itself  of  a  mutual  agreement  made  by  its  officers  among 
themselves  to  accept  a  reduced  rateof  salary  for  their  services 
to  be  thereafter  performed,  the  corporation  not  having  been  a 
party  to  the  agreement,  and  the  same  not  having  been  com- 
municated to  or  accepted  by  it  or  its  directors.''  An  officer  of 
a  corporation,  in  order  to  recover  compensation  for  bis  sen  ices, 

■State  v.  Association,   12  <  (hio  St.  597;   Robinson   v.  Supreme  Council, 

579.  Baltimore Dailj  Record,May  IT.  L892. 

State  v.  Association,  88  Oh.  St.  s  Richard  Thompson  Co.  ▼.  Brook, 

281.  14  N.  V.  Supp,  370;   Robinson  v.  Su- 

McCarthy's  Appeal.  IT  W.  N.  C.  preme  Council,  Baltimore  Daily  Rec- 

182.  ord,  May  17,  1892. 

4  State  v.  Association,  42   Oh.  St. 


200  OFFICERS. 

must  show  that  he  is  an  officer  de  jure  as  well  as  de  facto.  It 
is  the  legal  right  to  an  office  which  confers  the  right  to  receive 
and  appropriate  the  salary,  fees,  and  emoluments  incident  to 
such  office;  and  if  an  officer  de  facto  has  obtained  such  salary, 
fees,  or  emoluments,  he  is  liable  to  the  officer  de  jure  in  an 
action  for  money  had  and  received."  If  suit  be  brought  by  a 
person  claiming  to  be  an  officer  for  the  salary  or  compensation 
belonging  to  such  office,  his  title  to  the  office  is  in  issue,  and, 
if  that  be  defective,  and  another  has  the  real  right,  although 
not  in  possession,  the  plaintiff  can  not  recover.2 

§  100.  Liability  of  officers  of  mutual  benefit  society. — It 
is  the  duty  of  the  officers  of  a  mutual  benefit  society  to  pro- 
tect and  properly  disburse  the  funds  which  have  been  col- 
lected by  assessments  for  the  payment  of  death  losses,  and  if 
the  directors  have  divided  among  themselves  and  other  incor- 
porators, and  paid  out  for  expenses,  any  money  which  ought 
to  have  been  applied  to  the  payment  of  a  death  loss,  they  are 
personally  liable  to  the  beneficiary  for  the  amount  misappro- 
priated or  misapplied,  even  though  they  acted  in  good  faith  in 
the  matter.3  But  officers  of  such  a  society,  whose  duties  are 
executive,  and  who  are  subject  to  the  direction  and  control  of 
the  directors,  are  not  liable  for  such  misappropriation  of 
funds,  if  they  have  simply  performed  their  duties  as  directed. 
The  officers  of  such  a  society  are  not  liable  for  money  of  the 
society  deposited  in  bank,  and  lost  by  its  failure,  if  they 
acted,  in  reference  to  such  deposit,  in  good  faith,  and  as  pru- 
dent men  generally  acted  in  the  same  community.4  The  treas- 
urer of  a  society  in  a  proceeding  for  an  accounting,  should  not 
be  allowed  a  set-off  for  expenses  incurred  "by  him  in  carrying 
out  an  illegal  vote  to  dissolve  the  society,  nor  for  costs  and 
expenses  of  an  equity  suit  brought  by  members  to  restrain 
him  from  carrying  into  effect  the  illegal  vote.5  Where  the 
laws  of  an  association  provide  that  the  funds  shall  be  placed 

JMayfield  v.  Moore,  53  111.  428.  Iowa  698;  10  N.  W.  Eep.  248;  Com- 

2  Waterman  v.  Company,  139  111.  siock  v.  Grand  Rapids,  40  Mich.  397. 

658;  29  N.  East.  Eep.  689;  Dolan  v.  3  Stewart  v.  Association,  64  Miss. 

Mayor,  68  N.  Y.   274;  Matthews  v.  499;  1  So.  Eep.  743. 

Supervisors,  53  Miss.  715;  Dorsey  v.  4  Stewart  v.  Association,  supra. 

Smyth,  28  Cal.  21;  Andrews  v.  Port-  5St.  Mary's   Ben.  Ass'n  v.  Lynch, 

land,    79  Me.   484;  10  Atl.  Rep.  458;  64  N.  H.  213;   9  Atl.  Rep.   98;   4  N. 

McCue    v.    County    of    Wapello,   56  Eng.  Rep.  163. 


OFFICERS.  201 

in  the  hands  of  the  treasurer,  and  that  no  money  shall  be 
drawn  except  by  an  order  of  the  executive  council,  signed  by 
a  chief  officer  (naming  him)  and  at  least  two  trustees,  without 
providing  any  maimer  of  turning  over  funds  to  a  successor,  an 
action  to  recover  the  funds  can  not  be  maintained  against  the 
treasurer  merely  because  he  refuses  to  pay  the  money  in  accord- 
ance with  a  resolution  of  the  executive  council,  when  no  order 
is  drawn  and  signed  as  provided.1     Trustees  or  officers  of  an 
unincorporated  society  are  not  individually  liable  for  its  debts, 
unless  they  have  in  some  way  specially  rendered  themselves 
liable.4     The  funds  of  a  society  were  kept  on  deposit  in  bank, 
subject  to  the  order  of  the  trustees.     One  of  the  by-laws  of 
the  society  provided  that  the  trustees  should  "keep  the  funds 
invested,  for  the  best  interests  of  this  tribe,  in  such  stocks, 
bonds,  mortgages,  or  other  securities  as  shall  be  approved  by 
two-thirds  of  the  members  thereof  present  at  a  regular  coun- 
cil."    An  order  was  passed  by  the  tribe  or  society,  instructing 
the  trustees  "to  try  and  invest  the  money  in  the  bank,  not  ex- 
ceeding $2,000."     Such  an  order  does  not  purport  to  author- 
ize  an    investment   of    money  of    the  tribe  otherwise  than 
"in  stocks,  bonds,  mortgages,  or  other  securities,  approved  by 
two-thirds  of  the  members  thereof  present  at  a  regular  coun- 
cil," and  an  investment  of  any  of  such  funds  by  the  trustees 
in  real  estate  bought  of  a  member  of  such  tribe  or  society,  is 
voidable  at  the  election  of  the  society.     In  an  action  against 
the  trustees  and  the  vendor  to  have  such  a  purchase  declared 
void,  evidence  that  one  of  the  trustees  understood  that  the 
propriety  of  the  purchase  was  first  to  be  submitted  to  the 
society,  is  admissible;   and  evidence  that  one  of  the  trustees 
acted  without  the  concurrence  of  a  co-trustee,  or  thai  the  lat- 
ter was  induced  to  concur  in  his  act  by  reason  of  misrepresen- 
tations which  he  had  made  with  respect  to  the  concurrence  of 
a  third  trustee,  is  also  admissible.     In    such   an   action   the 
question  whether  the  acts  of  the  officer  were  fair  or  unfair  is 
to  be  determined  by  the  jury,  and   not   by  the  trustees  who 
may  be  called   as  witnesses.     "Where  a  mortgage  made  by  the 

vendor  has  I n   paid   oil'  and  canceled   with   funds  derived 

from  a  fraudulent   sale  of  property  to  the  society,  and  suit  is 

"Smith  v.  Pinney,  86  Mich.  184;  i'.»       -  Wott  v.  Schlieffer,  2  Brewa  568. 
N.  \Y.  Rep.  305. 


202  OFFICERS. 

brought  to  set  aside  such  sale,  the  vendor  and  mortgagee  be- 
ing parties,  the  mortgage  may  be  revived  and  enforced  for  the 
benefit  of  the  society  against  all  the  property  therein  de- 
scribed, to  the  extent  of  the  amount  applied  by  the  vendor  to 
its  satisfaction,  from  the  proceeds  of  such  fraudulent  sale.1  A 
member  of  a  society,  who  is  elected  its  treasurer  to  receive 
and  invest  the  funds  of  the  society  in  his  individual  name,  and 
who  does  so  invest  them,  holds  the  funds  as  a  trustee  for  the 
society,  and  is  subject,  as  such  trustee,  to  the  jurisdiction  of  a 
court  of  equity.2  Neither  the  society  nor  its  officers  can  ap- 
propriate its  funds  to  other  purposes  than  those  for  which 
they  were  intended,  and  a  court  of  equity  will  interfere  to 
prevent  a  wrongful  disposition  of  them.3  The  fact  that  an 
unincorporated  society,  not  a  charity,  is  subject  to  the  sole 
government  and  control  of  a  superior  body,  does  not  deprive 
courts  of  their  jurisdiction  to  compel  certain  trustees  of  the 
society,  removable  at  its  pleasure,  to  transfer  the  trust  estate 
to  new  trustees  duly  chosen  by  it.4  A  bill  in  equity  stated 
that  the  plaintiffs  and  many  others  had  formed  a  voluntary 
association  for  benevolent  purposes,  that  the  name  of  the  as- 
sociation was  afterward  changed  by  vote  of  its  members  at  a 
regular  meeting,  that  the  funds  of  the  association  were  depos- 
ited for  its  use  in  the  names  of  its  four  trustees  in  a  savings 
bank,  that  one  of  its  trustees  had  refused  to  join  with  his  co- 
trustees in  an  assignment  of  those  funds  to  their  successors, 
and  that  the  bank  had  refused  to  transfer  the  funds  without 
such  an  assignment;  it  prayed  that  the  savings  bank  might  be 
ordered  to  transfer  the  funds,  and  that  the  trustee  might  be 
ordered  to  join  in  the  assignment.  The  court  held  that  plaint- 
iffs and  their  associates  might  maintain  the  bill.5 

Where  the  trustees  of  a  lodge  had  executed  their  notes  for  its 

1  Red  Jacket  Tribe  v.   Gibson,  70  Library  v.  Bliss,  151  Mass.  364;  25  N 

Cal.  128.  East.    Rep.    92;    Peter  v.  Carter,   70 

s  Weld  v.  May,  9  Cusb.  (Mass.)  181.  Md.  139;  16  Atl.  Rep.  450;  Trustees  v. 

3Penfleld  v.   Skinner,   11   Vt.  296;  Adams,  65  N.  H.   225;    18  Atl.   Rep. 

Bailey  v.  Lewis,  3  Day  (Conn.)  450:  777. 

Stadler  v.   District  Grand   Lodge,   3  4  Brown  v.  Griffen,  14 "Weekly  Notes 

Am.  L.  Rec.  589;    In   re   Equitable  of  Cases,  358. 

Reserve,  16  N.  Y.    Supp.  80;   Good-  5  Birmingham    v.    Gallagher,    112 

man  v.  Jedidjah  Lodge,  67  Md.  117;  Mass.  190;    see  Snow  v.  Wheeler,  113 

9  Atl.  Rep.  13;  Thomas  v.  Ellmaker,  Mass.  179. 
1    Par.    Sel.    Cases    (Pa.)    98;    Cary 


OFFICERS.  203 

debts  and  afterward  bad  in  good  faith  made  a  sale  of  its  prop- 
erty to  a  stranger,  in  consideration  of  his  agreement  to  pay 
such  notes,  it  was  held  that  they  might  thereafter,  as  individ- 
uals, repurchase  the  property  from  such  purchaser,  and  tin- 
mere  fact  that  they  did  so.  without  any  consideration  other 
than  their  agreement  to  pay  the  notes  assumed  by  the  pur- 
chaser, did  not  render  such  sal*1  fraudulent  and  void  as  to  the 
creditors  of  the  lodge.1  Zealous  as  courts  of  equity  are.  in 
watching  the  conduct  of  a  trustee  in  connection  with  the  ob- 
jects of  his  trust,  he  is  only  forbidden  by  them  from  dealing 
with  the  trust  property  for  his  own  benefit,  so  long  as  the 
trust  continues.  The  moment  it  ceases,  he  occupies  precisely 
the  same  relation  to  it  that  strangers  to  the  trust  do,  and,  act- 
ing in  good  faith,  he  may  become  the  owner  by  purchase  or 
otherwise.2 

§101.  Suits  upon  the  bonds  of  officers — Rights  and  liabil- 
ities of  sureties. — Where  persons  become  sureties  upon  the 
bond  of  a  treasurer  of  a  society,  for  the  faithful  application  of 
money  in  his  hands  belonging  to  the  society,  the  fact  that  the 
officers  and  members  knew  of  his  previous  misappropriations 
of  the  funds  intrusted  to  him  during  the  prior  year,  and  with 
such  knowledge  re-elected  him,  and  failed  to  communicate  such 
tad  to  his  sureties,  no  inquiry  having  been  made  of  them  by 
the  sureties,  and  they  having-  done  no  act  to  put  the  sunt  ies 
off  their  guard  or  to  prevent  them  from  ascertaining  the  facts. 
does  not  impute  fraud  on  the  part  of  the  society,  which 
can  be  set  up  in  avoidance  of  the  liability   of  such    sureties  on 

the  loud.  This  rule  is  not  changed  by  the  fad  thai  such  so- 
ciety is  a  secret  organization.  The  account  books  are  not 
under  the  seal  of  secrecy.  But,  under  any  circumstances,  if  a 
per-.Mii  proposing  to  become  surety  for  an  officer  of  a  Lodge  in- 
quires of  any  other  officer,  or  even  of  its  members,  they  will,  if 
within  their  knowledge,  be  required  to  communicate  correct 
information.  The  sources  of  information  are  open  to  the  pro- 
posed sureties  it'  they  are  disposed  to  pursue  them,  hut  if  the 
officers  and  members  are  asked  nothing  and  say  nothing,  they 
are  not  guilty  of  fraud.3     If  the  principal  in  the  bond  was.  at 

'Miller  v.  Lebanon  Lodge,  sS  1  n<  1 .       'Roper  v.  Sangai i  Lodge,  (J1  111. 

r.ts. 
•  Munn  v.  Burgess,  7<>  111.  604;  Bush 
v.  Sherman,  80  111.  160. 


20-i  OFFICERS. 

the  close  of  his  first  term,  a  defaulter  in  his  capacity  as  such 
officer  as  respected  a  material  amount  of  the  funds  of  the  so- 
ciety, and  if  such  fact  was  known  to  the  president  of  the  society 
before,  and  at  the  time  of  the  delivery  by  the  sureties  of  the 
bond,  but  was  unknown  to  the  sureties,  or  any  of  them,  and 
the  latter,  before  they  would  deliver  the  bond,  made  or  caused 
to  be  made  inquiries  of  said  president,  or  in  open  lodge,  in  his 
presence  and  hearing,  for  information  respecting  the  condition 
of  the  accounts  or  financial  relation  with  the  society  of  such 
officer,  and  if  the  fact  of  such  defalcation  was  fraudulently 
concealed  from  them  by  the  president,  or  other  agent  of  the 
society,  acting  within  the  scope  of  his  apparent  authority,  and 
having  knowledge  of  such  defalcation,  or  if  they  falsehT  repre- 
sented to  the  sureties  that  his  accounts  were  all  right  and  cor- 
rect, and  thereby  induced  them  to  deliver  the  bond  to  the 
society,  then  it  would  be  void,  and  no  recovery  could  be  had 
upon  it.1  It  is  fraud  in  law,  if  a  party  makes  representations 
which  he  knows  to  be  false,  and  injury  ensues,  although  the 
motive  from  which  the  representations  proceeded  may  not 
have  been  bad.  Fraud  will  be  inferred  in  such  a  case,  and  it 
is  not  necessary  to  show  in  addition  to  the  knowingly  false 
representations,  that  they  were  made  with  the  intention  to  de- 
ceive the  sureties,  and  with  the  purpose  of  deceiving  them 
and  inducing  them  to  deliver  the  bond.2 

In  an  action  against  the  sureties  on  the  bond  of  an  officer  of  a 
society  it  was  held  that  admissions  by  the  principal  on  the 
bond,  although  made  subsequently  to  the  acts  to  which  they 
related,  were  properly  admitted  to  charge  the  sureties,  such 
admissions  being  against  the  interest  of  the  principal,  and  he 
having  since  died;  that  a  letter  of  the  principal  containing  col- 
lateral matters,  written  in  extenuation  of  his  conduct  in  using 
certain  money  in  his  hands,  wTas  improperly  admitted.3     F.  wras 

1  Drabek  v.  Grand  Lodge,  24  111.  3  Drabek  v.  Grand  Lodge,  supra, 
App.  82;  Wayne  v.  Commercial  Nat.  citing  as  sustaining  the  first  proposi- 
Bank,  52  Pa.  St.  250;  Franklin  Bank  tion  1  Greenleaf  on  Ev.  (May's  Ed.) 
v.  Cooper,  36  Me.  180;  39  Me.  542;  §§  151,  152,  and  authorities  cited  in 
Sooy  ads.  the  State,  39  N.  J.  L.  135.  notes,  and  as  sustaining  the  second,  1 

2  Drabek  v.  Grand  Lodge,  supra;  Greenleaf  on  E v.  §  52. 
Case  v.  Avers,  65  111.  142;  Gough  v. 

St.  John,  16   Wend.  645;  Railton  v. 
Mathews,  10  CI.  and  Fin.  934. 


OFFICERS.  205 

elected  treasurer  of  a  lodge  of  Knights  of  Pythias  in  1879, 
and.  annually  thereafter  until  1885.  Although  the  constitu- 
tion of  this  order  required  that  this  officer  should  give  bond 
with  security  before  entering  upon  the  duties  of  his  office,  F. 
was  not  required  to  give  bond  until  April,  1884,  when  he  exe- 
cuted the  bond  sued  on.  This  bond  covenanted  that  he  would 
render  an  account  for  all  money  or  other  property  which 
should  come,  or  had  already  come  to  his  hands, "  or  is  now  in 
his  hands."  At  the  time  he  executed  the  bond  he  owed  the 
lodge  from,  $400  to  $500.  He  had  placed  the  money  in  his 
business,  but  this  fact  was  not  known  either  to  the  lodge,  or 
to  his  sureties.  When  his  successor  was  elected  in  1S85,  he 
owed  the  lodge  $880.17,  and  soon  afterward  paid  $500.  An 
action  was  brought  on  the  bond  to  recover  the  remainder. 
The  court  held  that  F.  was  at  least  a  de  facto  officer  prior  to 
the  time  he  executed  the  bond,  and  the  sureties  could  not  rely 
upon  his  failure  to  execute  bond  as  a  defense  as  to  the  money 
which  came  into  his  hands  during  that  time;  that  the  amount 
which  F.  owed  to  the  lodge  when  the  bond  was  executed  was 
in  legal  contemplation,  "in  his  hands"  within  the  meaning  of 
the  bond,  although  the  money  was  invested  in  his  business, 
and  that  his  sureties  were  liable  therefor.1 

§  102.  Liability  of  new  sureties. — That  new  sureties  are 
not  responsible  for  prior  defalcations,  unless  the  condition  of 
the  new  obligation  embraces  them,  is  a  principle  which  has 
frequently  been  decided  by  the  courts.8  It  is  a  familiar  prin- 
ciple that  the  obligation  of  a  surety  is  a  matter  of  strict  law, 
and  can  never  arise  from  implication.  The  bond  must  speak 
for  itself,  and  its  language  can  never  be  extended  or  altered  to 
the  injury  of  the  surety.  It  would  be  a  violation  of  this  ele- 
mentary principle  to  hold  the  sureties  on  the  last  bond  liable 
for  the  defaults  of  the  first  as  well  as  the  second  term.8  But 
a  different  rule  prevails  in  Illinois,  and  it  is  there  held  that 
when  an  officer  of  a  society  is  re-elected  and  becomes  his  own 

1  Wilson  v.  "Wright,  8Ky.  Law  Rep.  'dining  v.  City  of  Evansville,  66 
963  (Ky.  Sup'r  Ct).  Irul.  51);  Vivian  v.  Otis,  24  Wis.  518; 

2  United  States  v.  Boyd,  15  Peters  Thomas  v.  Hubbell,  15  N.  Y.  405;  35 
187;  Myers  v.  U.  S.,   1  McLean  493;  N.  Y.  120. 

Bessinger  v.  Dickerson,  20  Iowa  260; 
Inhabitants,  etc.,  v.  Randall,  105 
Mass.  295. 


206  OFFICERS. 

successor,  and  at  the  commencement  of  his  second  term  re- 
ports a  certain  sum  in  his  hands,  and  gives  bond  with  sureties 
to  account  for  and  pay  over  the  moneys  coming  to  his  hands 
during  the  term,  his  sureties  when  sued,  will  be  responsible 
for  the  sum  so  reported  in  his  hands,  and  will  not  be  permitted 
to  show  that  the  defalcation,  in  fact  occurred  during  the  pre- 
vious term,  and  throw  the  liability  on  his  sureties  for  that  term.1 
§  103.  Liability  on  a  bond  to  a  state. — The  law  of  Kansas 2 
provides :  "  The  officers  of  each  such  association  having  custody 
of  the  papers  or  funds  thereof  shall  enter  into  bonds  to  the  state 
of  Kansas  for  the  benefit  of  the  party  interested,  in  the  sum 
of  fifty  thousand  dollars,  with  three  or  more  sureties,  to  be 
approved  by  the  superintendent  of  insurance,  conditioned  for 
the  faithful  accounting  for,  and  proper  payment  and  disburse- 
ment to  the  legitimate  purposes  of  the  association,  of  all  the 
moneys  thereof  which  come  into  their  hands,  and  for  the  faith- 
ful performance  of  all  contracts  made  with  its  certificate  or 
policy  holders."  Of  this  statute  the  supreme  court  of  that 
state  said:  "The  legislature  has  seen  fit  to  require  a  bond 
from  these  officers  for  a  faithful  performance  of  their  duty 
under  the  law,  and  the  contracts  made  with  the  members,  in- 
stead of  requiring  a  bond  to  be  given  by  the  association,  and 
thus  holding  all  the  members  liable  for  the  defaults  of  those  in 
office.  Some  doubt  is  thrown  on  the  construction  of  the  stat- 
ute by  providing  in  addition  for  the  faithful  performance  of 
the  contracts  made  with  the  certificate  or  policy  holders;  but 
as  the  bond  is  given  by  the  officers,  and  the  promise  is  made 
for  them,  the  manifest  meaning  is  that  they  were  to  faithfully 
perform  the  contracts  of  the  association  while  they  were  in- 
trusted with  the  control  of  its  business, — that  is,  during  their 
terms  of  office.  At  each  annual  meeting  officers  are  chosen 
who  are  required  to  give  a  bond;  and  it  would  be  an  unreason- 
able interpretation  which  would  require  officers  to  be  respon- 
sible for  the  derelictions  or  defaults  of  those  who  succeed 
them.  Taking  the  provisions  of  the  act  together,  the  reason- 
able construction  is  that  the  officers  will  faithfully  discharge 
their  duties,  and  perform  the  contracts  of  the  association,  dur- 
ino-  the  term  for  wdiich  thev  were  elected.'' 3 

1  Roper  v.  Sangamon  Lodge,  91  111.        3  Kaw  Life  Ass'n  v.  Lemke,  40  Een. 
518.  142  and  661;  20  Pac.  Rep  512. 

2  Chapter  131,  Laws  1885. 


CHAPTER  VIII. 

MEETINGS. 

§  104.  Notice  of  meetings. 

105.  Rules  governing  future  meetings. 

106.  Duty  of  members  present  to  vote. 

107.  Presumption  that  a  quorum  was  present. 

108.  When  corporate  acts  are  binding. 

109.  Meetings  on  Sunday. 

§  104.     Notice  of  meetings. — If  the  charter  or  by-laws  of  a 

society  fix  the  time  and  place  at  which  regular  meetings  shall 
be  held,  no  further  notice  to  the  members  is  necessary.  But 
where  particular  business  of  great  importance  and  extra- 
ordinary character  is  to  be  brought  before  a  regular  meeting, 
notice  of  the  meeting,  and  the  particular  matter  to  be  brought 
before  it  should  be  given.  In  order  to  give  validity  to  acts 
done  at  a  special  meeting,  all  the  members  must  be  notified.1 
A  notice  of  a  special  meeting  must  always  be  given.  It 
should  be  given  to  the  member  in  person,  unless  it  is  other- 
wise provided  in  the  charter  or  by-laws.  A  notice  of  a  meet- 
ing should  state  specifically  the  time  when,  and  the  place 
where  it  will  be  held,  and  the  particular  business  which  will 
come  before  the  meeting.  Where  the  charter  or  by-laws  do 
not  prescribe  how  long  before  a  meeting  a  notice  shall  be 
served,  it  must  be  served  a  reasonable  time  before  it.  A 
notice  of  a  special  meeting  of  a  society,  which  does  not  state 
the  business  to  be  transacted,  does  nol  authorize  a  vote  to  dis- 
solve the  association  and  dispose  of  its  property."  When  a 
member  of  a  society  is  present  at  a  meeting,  and  participates 
in  the  proceedings  he  complains  of,  such  proceedings  not  being 
improper   in  themselves,   nor   subversive    of    the    object     for 

1  Commonwealth  v.  Guardians,  6  C.  789;  Kuhl  v.   Meyer,  42  Mo.  Arp. 

Serg.  &  R.  469:  Knyaston  v.    Mayor,    474. 

2  Strange  1051;  Rex  v.  Liverpool,   2       5St.  Mary's  Association  v.  Lynch, 
Burr.  734;  Smyth  v.  Darley,  2  H.   L.    64  N.  H.  213;  9  At!.  Rep.  98. 

(297) 


208  MEETINGS. 

which  the  society  was  formed,  he  is  estopped  to  object  to  the 
irregularity  of  the  meeting  and  the  insufficiency  of  the  notice 
of  it.'  Where  the  organic  law,  the  charter,  or  the  by-laws 
prescribe  a  form  of  notice,  or  the  manner  in  which  it  shall  be 
served,  the  notice  must  conform  to  these  requirements.  If  it 
fails  so  to  conform,  the  proceedings  of  a  meeting  held  pur- 
suant thereto,  are  invalid.2  All  members  of  a  society  are  pre- 
sumed to  know  of  the  times  appointed  by  the  charter,  con- 
stitution or  by-laws,  for  the  transaction  of  particular  business; 
and,  therefore,  no  special  notice  is  required  to  be  given  of  such 
meeting,  or  of  the  intention  to  transact  such  business.  A 
society  can  transact  any  business  at  an  adjourned  meeting, 
which  could  have  been  done  at  the  original  meeting,  the 
former  being  but  a  continuation  of  the  latter.  No  new  notice 
of  the  adjourned  meeting  is  necessary.3  But  if,  at  a  regular 
meeting,  notice  is  given  that  a  special  meeting  has  been  called, 
notice  of  such  meeting  should  be  sent  to  the  members,  for 
there  is  no  presumption  that  persons  not  present  at  a  regular 
meeting  knew  what  was  done  there." 

It  is  a  presumption  of  law,  that  every  meeting  of  a  society 
was  lawfully  and  regularly  held,  and  that  the  proper  notice  of 
it  had  been  given.  It  is  for  him  who  attacks  the  legality  and 
validity  of  a  meeting,  to,  prove  want  of  notice,  or  its  insuf- 
ficiency.5 Where  the  time  or  manner  of  giving  notice  is  pre- 
scribed, it  is  essential  to  the  validity  of  the  acts  done  at  the 
meeting  that  notice  was  given  as  prescribed.0  Any  member 
may  object  to  the  sufficiency  of  the  notice  and  the  validity  of 
the  acts  done.  But  the  prescribed  notice  may  be  dispensed 
with  by  unanimous  consent,  and  where  all  the  members  appear 
and  participate  in  the  proceedings  of  the  society  without 
objection  to  the  notice  of  the  meeting,  they  waive  any  objection 
to  it.7 

§  105.    Rules  governing  future  meetings  of  the  society. — 

1  Fischer  v.  Raab,  57  How.  Pr.  87;  Porter  v.  Robinson,  30  Hun  209;  Sar- 

Hussey  v.  Gallagher,  61  Ga.  86.  gent  v.  Webster,  13  Mete.  (Mass.)  497. 

4  Stevens  v.  Society,  12  Vt.  688.  6 Hunt  v.   School  District,    14  Vt. 

3  Warren  v.    Movver,    11   Vt.    385;  300;  39  Am.  Dec.  255;  Stow  v.  Wyse, 

Scadding  v.  Lorant,  5  Eng.  L.  &  Eq.  7  Conn.  214;  18  Am.  Dec.  99. 

16;  Smith  v.  Law,  21  N.  Y.  296.  'Judah  v.    Ins.   Co.,   4  Ind.   333; 

4 People  v.  Batchelor,  22  N.  Y.  128.  Jones  v.  Milton,  7  Ind.  547. 

6  Society  v.  Weather  ly,  75  Ala.  248; 


MEETINGS.  209 

An  enactment  made  by  one  meeting  of  the  society  to  govern 
the  proceedings  of  future  meetings,  is  inoperative  beyond  the 
pleasure  of  the  society,  acting  by  a  majority  vote  at  any  regu- 
lar meeting.  The  power  of  the  society  to  enact  its  laws  is 
continuous,  residing  in  all  regular  meetings  of  the  society  so 
long  as  it  exists.  Any  meeting  can,  by  a  majority  vote,  mod- 
ify or  repeal  the  law  of  a  previous  meeting,  and  no  meeting 
can  bind  a  subsequent  one  by  irrepealable  acts  or  rules  of  pro- 
cedure. The  power  to  enact  is  the  power  to  repeal.  A  by-law 
requiring  a  two-thirds  vote  of  members  present  to  alter  or 
amend  the  laws  of  the  society,  may  itself  be  altered,  amended 
or  repealed  by  the  same  power  which  enacts  it.1 

§  106.  It  is  the  duty  of  members  present  to  vote. — When 
the  proper  presiding  ollicer  of  a  society  puts  a  question  to  a 
vote,  it  is  the  duty  of  every  member  to  respond,  or  be  counted 
with  the  greater  number,  because  he  is  supposed  to  have  as- 
sented beforehand  to  the  process  pre-established  to  ascertain 
the  general  will.  But  the  rule  of  implied  assent  is  certainly 
inapplicable  where  the  proceedings  are  revolutionary  in  their 
character,  and  the  question  is  not  put'by  the  proper  presiding 
officer.  The  refusal  of  an  appeal  from  the  decision  of  the  pre- 
siding officer  is  no  ground  for  his  degradation  at  the  call  of  a 
minority;  nor  could  it  impose  on  the  majority  an  obligation  to 
vote  on  the  question  when  put  unofficially,  and  out  of  the 
usual  course.  Ln  such  a  case,  the  rule  of  implied  assent  does 
not  apply,  and  such  a  vote  of  degradation  can  not  be  sustained 
by  the  constructive  votes  of  those  who  remain  silent.2  '  All 
persons  present  at  a  meeting  at  which  a  vote  is  taken,  dispos- 
ing of  a  fund  of  the  society,  if  no  one  dissents,  are  considered 
as  voting  with  the  majority  for  the  motion,  and  assenting 
thereto.  Their  right  to  the  fund  is  concluded.  But  the  rule 
is  otherwise  as  to  those  not  present.' 

§107.  When,  a  quorum  is  presumed  to  have  been  pres- 
ent.— Where  it  is  not  usual  to  mention  on  the  minutes  the 
names  or  number  of  those  present,  and  the   charter    requires 

1  Commonwealth  v. Mayor, 5 Watts  ^Alids  v.  McKeen,  18  N.  J.  Eq. 
I.Y..':  Richardson  v.  Society,  58  X.  II.  462;  Richardson  v.  Society,  ob  X.  II. 
1ST:  see §28.  187. 

'-'( k>mmonwealth  v.Green,4Whart, 

•£Pa.)  537-(io:;. 

14 


210  MEETINGS. 

two-thirds  to  form  a  quorum,  it  will  be  presumed  that  the 
required  two-thirds  assembled,  where  it  is  stated  on  the  min- 
utes that,  on  due  invitation,  the  members  met.' 

§  108.  When  corporate  acts  are  binding. — In  aggregate 
societies,  the  acts  of  the  majority,  in  cases  within  the  charter 
powers,  bind  the  whole.  The  majority  here  means  the  major 
part  of  those  who  are  present  at  a  regular  meeting.  There  is 
a  distinction  taken  between  a  corporate  act  to  be  done  by  a 
select  and  definite  body,  as  by  a  board  of  directors,  and  one 
to  be  performed  by  the  members  of  the  society;  the  majority 
of  the  definite  body  must  be  present,  and  then  a  majority  of 
the  quorum  must  decide;  but  a  majority  of  the  members  of  the 
society  present  may  act.2  When  no  special  provision  is  made 
by  the  constitution  of  a  corporation,  the  whole  are  bound  by 
the  acts,  not  only  of  the  major  part,  but  of  the  major  part  of 
those  who  are  present  at  a  regular  corporate  meeting,  whether 
the  number  present  be  a  majority  of  the  whole  body  or  not. 
And,  though  a  particular  constitution  require  the  presence  of 
a  majority  of  the  whole  number,  yet  the  concurrence  and  con- 
sent of  a  majority  of  the  whole  is  not  necessary;  it  is  sufficient 
that  a  majority  of  the  number  present  concur.  So,  where  a 
number  less  than  the  majority  of  the  whole  are  by  a  particular 
constitution  competent  to  do  a  corporate  act,  the  act  of  a  ma- 
jority of  that  smaller  number  is  equivalent  to  the  act  of  the 
majority  of  the  whole.3  An  incorporated  society  can  only 
speak  and  act  through  the  medium  prescribed  by  law.  When 
the  law  prescribes  this  medium  to  be  the  board  of  directors, 
the  society  at  large  may  not  assume  the  management  and  di- 
rection of  its  affairs.  At  a  meeting  of  the  members  of  an 
incorporated  mutual  benefit  society,  a  resolution  was  passed 
directing  a  larger  amount  to  be  paid  to  certain  beneficiaries 
than  the  amount  of  the  respective  assessments  collected  for 
their  benefit.  A  by-law  of  the  society  provided  that  no  money 
could  be  drawn  or  appropriated  from  the  treasury  Avithout  the 
order  of  the  directors.  The  supreme  court  of  California  held 
that,  in  the  absence  of  an  adoption  or  ratification  by  the  di- 
rectors, the  resolution  was  inoperative,  as  in  that   state   an 

1  Commonwealth    v.     Woelper,   3       2  2  Kent's  Com.  293;  see  §  127. 
Ser.  &  R.  28.  s  2  Bacon's  Abridgment,  459. 


MEETINGS.  211 

incorporated  society  could  only  act  by  its  board  of  directors.' 
A  by-law  adopted  at  a  meeting  at  which  a  quorum  is  not  pres- 
ent is  invalid.2  An  amendment  to  the  by-laws  is  binding  upon 
members  not  present  at  the  meeting  at  which  it  was  adopted, 
only  when  it  is  affirmatively  shown  that  the  meeting  was 
called  in  the  manner  provided  by  the  constitution.3  Where 
the  minutes  of  a  society  show  that  a  motion  was  made  to  sus- 
pend a  certain  member,  but  do  not  show  what  action  was 
taken  on  the  motion,  it  is  competent  to  prove  by  parol  evi- 
dence that  the  motion  was  put  and  carried.4 

§  109.  Meetings  on  Sunday. — A  member  was  expelled 
from  the  society  at  a  meeting  held  on  Sunday  evening,  and 
the  notice  of  the  charges  and  meeting  was  also  served  on  Sun- 
day. He  applied  to  be  reinstated  on  the  ground  that  the  pro- 
ceedings and  notice  were  void.  But  the  court  held  that, 
however  objectionable  it  might  be  to  hold  business  meetings 
of  such  a  society  on  that  day,  it  was  not  forbidden  by  the 
statutes  of  the  state  of  New  York,  and,  in  the  opinion,  the 
court  said  :  "  The  relator  chose  to  belong  to  a  society  which 
held  all  its  regular  meetings  on  that  day,  and  if.  at  such 
a  meeting,  he  was  served  with  a  notice  to  attend  the  next 
meeting,  it  does  not  rest  with  him  to  make  the  objection. 
At  the  common  law,  judicial  proceedings  only  were  prohib- 
ited on  Sunday.  Hence,  judicial  proceedings  on  Sunday  are 
void  at  common  law.  But  all  other  business  transactions 
are  valid,  except  so  far  as  prohibited  by  our  statute." 
Speaking  parenthetically  of  the  fact  disclosed  by  the  record, 
that  a  member  had  been  expelled  on  Sunday  from  a  mutual 
benefit  society  consisting  of  Israelites  only,  the  supreme  court 
of  Pennsylvania  said  :  "  It  may  not  be  amiss,  with  a  view  to 
call  attention  to  it,  to  notice  that  this  was  not  an  ecclesiastical 
or  church  trial,  concerning  matters  of  conscience.  It  was 
an  ordinary  secular  or  business  affair,  being  the  same  kind 
of  trial  which  any  other  corporation  mighl  engage  in.  It 
miffht   be   well  to   consider  how   far  such  trials  on  Sunday 

1  In  re  Association,  68  Cal.  :V.t  J.  *  Hamill  v.  Supreme  Council,  152 

-  Lockwood  v.  Bank,  9  R.  I.  308.  Pa.  St,  5:57:  35  Atl.  Rep.  846. 

3  Metropolitan  Association  v.  Wind-  5  People  v.  Society,  05  Barb.  (N.  Y.) 

over.  137  111.  417;  27  N.  East.  Rep.  538;  357. 

see  §  20. 


212  MEETINGS. 

comport  with  the  legislation  of  the  state  and  the  genius  of  our 
institutions.  It  will  also  be  remembered  that  Jews,  who  regard 
the  seventh  day  only  as  their  Sabbath,  are  bound  to  observe 
the  civil  regulations  made  for  the  observance  of  the  Christian 
Sabbath." ' 

1  Society  v.  Commonwealth,  52  Pa.  St.  125;   citing  Merritt  v.  Earle,  31 
Barb.  38,  41. 


CHAPTER  IX. 

JURISDICTION  OF  COURTS  OVER  SOCIETIES.— PART  I. 

§  110.    Visitorial  power.of  courts. 

111.  Courts  of  society  must  first  be  resorted  to. 

112.  Courts  may  not  be  ousted  of  jurisdiction. 

113.  114.     When  courts  will  not  take  jurisdiction. 

115.  Injunction  to  restrain  illegal  act. 

116.  Injunction  to  restrain  society  from  doing  business  on  erroneous 

plan. 

117.  Status  of  unincorporated  societies. 

118.  Dissolution  of  an  unincorporated  society. 

119.  Dissolution  of  an  incorporated  society. 

120.  When  a  society  is  dissolved  by  its  own  act  or  neglect. 

§  110.  Yisitorial  power  of  courts. — The  visitorial  or  su- 
perintending power  of  the  state  over  incorporated  societies 
created  by  the  legislature  will  always  be  exercised  in  proper 
cases,  through  the  medium  of  the  courts  of  the  state,  to  keep 
those  corporations  within  the  limits  of  their  lawful  powers, 
and  to  correct  and  punish  abuses  of  their  franchises.  To  this 
end,  the  court  will  appoint  receivers,  and  issue  writs  of  quo 
warranto^  mandamus^  or  injunction,  as  the  exigencies  of  the 
particular  case  may  require,  will  inquire  into  the  grievance 
complained  of ,  and,  if  the  same  is  found  to  exist,  will  apply 
such  remedy  as  the  law  prescribes.  Ever}'-  corporation  of  the 
state,  whether  public  or  private,  civil  or  municipal,  is  subject 
to  this  superintending  control,  although  in  its  exercise  differ- 
ent rules  may  be  applied  to  different  classes  of  corporations.1 
The  doctrine,  as  laid  down  by  the  supreme  court  of  Illinois, 
that  the  power  of  incorporated  voluntary  societies  to  enact 
by-laws  is  unlimited,  and  thai  courts  will  not  interfere  with 
the  enforcement  of  any  by-law  thus  enacted,  is  in  conflict 
with  the  decisions  and  principles  oh  this  subject.3     But  over 

1  State  ex  rel.  v.  Chamber  of  Com-       2  People  v.  Board  of  Trade,  80  111. 
merce,  47  Wis.  670.  134. 

(213) 


211  JURISDICTION    OF   COURTS    OVER    SOCIETIES. 

unincorporated  societies  the  state  has  no  visitorial  or  superin- 
tending control.  They  are  not  created  by  the  state,  but  are 
brought  into  being  by  the  contract  of  the  members.  Courts 
will  interfere,  on  the  application  of  an  aggrieved  member,  to 
see  that  his  property  or  civil  rights  are  governed  according  to 
such  contract,  but  will  in  no  wise  interfere  with  the  terms  of 
the  contract,  so  long  as  they  are  not  contrary  to  law.1 

§  111.  Courts  will  not  take  jurisdiction  until  the  reme- 
dies provided  for  in  the  society  have  been  exhausted. — It  is 
the  law  of  voluntary  societies,  whether  incorporated  or  unincor- 
porated, that  they  may,  in  all  matters  relating  to  their  internal 
and  governmental  affairs,  and  concerning  the  relations  and 
rights  of  members,  as  such,  provide  methods  for  redressing 
grievances  and  deciding  controversies,  and  may  compel  mem- 
bers to  resort  to  the  prescribed  methods  of  procedure,  before 
invoking  the  power  of  the  courts  of  the  land.  Men  volun- 
tarily enter  such  societies,  and  in  becoming  members,  sub- 
scribe to  their  laws.  It  is,  therefore,  no  hardship  to  require 
them,  before  seeking  their  remedy  under  the  law,  to  exhaust 
their  remedy  under  the  contract  of  membership.  The  har- 
mony and  efficiency  of  such  societies  require  that  they  be 
permitted,  as  far  as  possible,  to  carry  out  their  purposes 
and  objects  in  the  manner  and  mode  which  shall  be  agreed 
upon  bv  the  members,  and  that  the  right  to  resort  to  the 
courts  for  the  settlement  of  controversies  and  grievances 
be  restricted.  When  the  charter,  constitution  or  by-laws  of 
the  society  require  a  member  to  first  seek  redress  within  the 
society,  and  by  appeal  to  carry  the  question  to  its  highest  tri- 
bunal, he  has  no  right  to  bring  an  action  against  the  society 
in  a  court  of  the  land,  until  he  has  exhausted  his  remedy  in  its 
tribunals.2  After  a  controversy  has  been  submitted  to  a  tri- 
bunal of  a  society,  while  it  is  still  pending,  and  before  the  de- 
cision is  announced,  a  court  will  refuse  to  entertain  jurisdic- 
tion of  it.3  There  is  no  presumption  that  societies  provide 
methods  within  themselves  for  redressing  grievances,  or  set- 

i  §  22.  Harrington  v.  Association,    70    Ga. 

2  See  §§47,  311;  Screwmen's  Asso-  310;  Karcher  v.  Supreme  Lodge,  137 

ciation  v.  Benson,  76  Texas,  552;  Es-  Mass.  368. 

sery  v.  Court  Pride,  2  Ontario  Rep.  3  Strempel  v.  Rubing,  4  N.  Y.  Supp. 

596;  Poultney  v.  Bachman,  31  Hun  534. 
49;  Lafond  v.  Deems,  81  N.  Y.  508; 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  215 

tling  controversies,  and  in  the  absence  of  evidence  showing 
the  existence  and  terms  of  such  provisions,  the  courts  will  as- 
sume that  there  are  none.1 

Where  the  society  makes  provision  for  the  settlement  of 
controversies  between  it  and  its  members,  or  between  its 
members,  concerning  its  government,  its  dissolution,  or  its 
property,  courts  Avill  refuse  to  take  cognizance  of  such  contro- 
versies until  those  who  have  grievances  have,  in  the  first  in- 
stance, resorted  to  and  exhausted  the  remedies  provided  by 
the  society;  and  it  is  not  necessary,  in  such  a  case,  that  the 
language  of  such  provisions  shall  make  it  imperative  on  the 
members  to  exhaust  these  remedies,  but  it  is  sufficient  that  the 
society  has  afforded  a  means  for  a  settlement  within  the 
society  itself.  The  mere  provision  of  such  a  means  abridges 
the  right  to  appeal  to  the  courts,  until  the  prescribed  means 
have  be.en  pursued.  This  rule  also  prevails  in  matters  of  dis- 
cipline, in  the  expulsion  and  suspension  of  members,  and 
arises  from  the  fact  that  in  such  cases  the  controversy  springs 
from  the  contract  of  membership,  anel  is  a  matter  of  internal 
regulation.  "With  such  matters  courts  are  loth  to  deal,  and 
will  take  jurisdiction  only  when  compelled  to  do  so.  But  it 
has  been  held  that  where  a  member  appears  in  the  relation  of 
a  creelitor  of  the  society,  he  is  not  bound  to  present  his  claim 
to  the  tribunals  of  the  society  unless  such  provisions  stipulate 
expressly  that  he  must  first  submit  his  claim  to  the  tribunals 
of  the  society,  before  seeking  to  enforce  it  in  the  courts  of  the 
land.3  The  plaintiffs  were  members  of  an  association  which 
received  its  charter  from,  and  was  subject  to  the  laws  and 
usages  of  a  state  association,  both  organizations  being  sub- 
ordinate to  a  national  association  or  council.  Acting  under 
its  rules,  the  state  association  declared  forfeited  the  charter  of 
the  first  mentioned  association  for  non-compliance  with  the 
constitution,  laws,  and  usages  of  the  state  council,  anel  took 
its  property,  as  provided  in  its  charter.  The  general  laws  of 
the  national  council  provided  that  a  member  of  the  order 
might  appeal  from  the  action  of  his  state  or  subordinate 
council,  pointed  out  the  steps  to  be  taken,  and  declared  that 
the  decision  of  a  state  council  should  be  binding  until  reversed 
by  the  national  council.     Xo  appeal  to  the  latter  was  made 

1  Olery  v.  Brown,  51   How.  Pr.  92.        2  See  g  360. 


216  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

by  the  plaintiffs,  but  they  at  once  resorted  to  the  public 
courts.  The  court  held  that  a  bill  in  equity  by  the  plaintiffs 
to  recover  back  their  property  so  taken,  on  the  ground  that 
their  charter  had  been  illegally  forfeited,  could  not  be  main- 
tained until  the  plaintiffs  had  first  sought  the  relief  prayed 
for  from  the  tribunals  provided  by  the  association.1  The 
rights  of  different  persons  claiming  to  represent  a  subordinate 
lodge  are  to  be  determined  by  the  constitution  of  the  grand 
lodge,  and  although  a  subordinate  lodge  has  done  acts  which 
render  it  liable  to  have  its  charter  declared  forfeited  to  the 
grand  lodge,  yet,  until  such  forfeiture  has  been  declared,  it  is 
entitled  to  possession  of  the  property  of  the  lodge;  and  a  bill 
in  equity  can  not  be  maintained  against  its  members  to  recover 
possession  of  such  property  by  persons  claiming  to  be  recog- 
nized by  the  grand  lodge  as  the  subordinate  lodge,  until  such 
charter  has  been  formally  declared  forfeited  by  the  grand 
lodge,  and  until  the  remedies  within  the  society,  prescribed  by 
the  constitution,  have  been  exhausted.2 

§  112.  Courts  may  not  be  ousted  of  jurisdiction. — But  it 
has  been  held  that  while  a  society  may,  by  its  by-laws,  com- 
pel members  to  submit  their  controversies  concerning  its  prop- 
erty and  their  rights  therein  to  the  tribunals  of  the  society, 
before  seeking  the  aid  of  the  courts,  it  may  not  prohibit  them 
entirely  from  resorting  to  the  courts.  So  long  as  the  members 
of  the  society  recognize  its  decisions  as  final  on  questions  of 
property  rights,  the  law  interposes  no  objection;  but  when  a 
member  refuses  to  abide  by  the  decision  of  the  society,  depriv- 
ing him  of  his  interest  in  its  property,  it  is  the  duty  of  the 
courts,  on  his  application,  to  afford  him  his  proper  remedy. 
The  remedy  of  an  expelled  member  who  has,  by  the  judgment 
of  the  society,  been  deprived  of  his  rights  in  its  property,  has 
already  been  treated  of;  the  question  now  is,  how  far  the 
judgments,  orders  and  decrees  of  the  society  are  binding  upon 
existing  members.  This  question  frequently  arises  in  the 
attempt  of  a  grand  or  supreme  lodge,  whose  decisions,  it  is 
agreed,  shall  be  final,  to  take  from  a  subordinate   lodge  its 

1  Oliver  v.  Hopkins,  144  Mass.  175;  136;  Supreme  Council  v.  Forsinger, 

ION.  East-  Rep.  776;  Reed  v.  Ins.  Co.,  125  Ind.  52;  25  N.  East.  Rep.  129. 

138  Mass.    575;  Supreme  Sitting  v.  2  Chamberlain  v.  Lincoln,  129  Mass. 

Stein,  120  Ind.  270;  22  N.  East.  Rep.  70. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  217 

property  and  its  rights  in  the  order.  It  may  be  laid  down  as 
the  Law  that,  whatever  powers  the  higher  lodges  or  councils 
of  a  society  may  have  to  make  rules  or  laws  for  the  govern- 
ment of  subordinate  lodges,  the  courts  can  never  recognize  as 
valid  any  by-law,  the  effect  of  which  is  to  give  to  these  higher 
bodies  the  final  right  to  determine  when,  under  what  circum- 
stances, and  for  what  causes,  the  property  of  the  subordinate 
lodges  may  be  taken,  nor  will  the  courts  permit  or  recognize 
the  enforcement  of  any  such  by-law,  when  its  enforcement 
will  accomplish,  and  is  designed  to  accomplish,  the  confiscation 
of  property,  or  the  talcing  away  of  property  from  one  set  of 
members  to  give  it  to  another  set.1  Where  the  by-laws  of  an 
unincorporated  society  establish  an  executive  board,  "to  which 
shall  be  referred  for  final  action  all  matters  of  difference 
which  may  arise,"  and  a  decision  of  the  board,  transferring 
certain  property  and  affecting  pecuniary  interests,  operates 
unjustly  against  any  of  the  members,  the  enforcement  of  the 
decision  will  be  restrained  by  the  courts.2 

§  113.  When  courts  will  not  take  jurisdiction. — In  ques- 
tions of  doctrine  or  policy,  a  society  is  the  sole  and  exclusive 
judge.  Courts  of  justice  will  not  entertain  jurisdiction  on  the 
merits  of  such  matters.  They  will  not  inquire  whether  the 
decision  or  declaration  of  the  society  upon  the  subject  of  its 
principles  is  in  harmony  with  the  traditions,  customs,  usages 
and  practices  of  the  society,  nor  will  they  examine  into  the 
merits  of  the  decision  of  a  society,  concerning  the  policy  to  be 
adopted  by  it  in  its  internal  government  and  administration. 
The  courts  take  it  for  granted  that  the  society  is  the  best 
judge  of  such  matters,  and  accept  its  decisions  as  final.  The 
society  being  purely  voluntary,  the  person  who  joins  it  con- 
sents that  he  will  he  bound  by  the  principles  and  rules  of  gov- 
ernment, which  it  has  adopted  or  may  adopt.  Although  he 
may  be  dissatisfied  with  the  action  of  the  society  in  such  mat- 
ters, he  has  no  right  to  appeal  to  the  courts  unless  he  claims 
that  such  action  has  injured  him  in  liiscivil  or  property  rights, 
[n  case  any  civil  or  property  right  is  affected  by  such  action, 
the  courts  will  impure  whether  the  society,  under  the   laws  of 

1  Goodman  v.  Lodge,  67  Md.  117;  9      'Rudolph    v.    Southern    League, 
At!.  Rep.   IS;  An-tiii  v.  Searing,   1G   7  N.  Y.  Supp.  135. 
N.  V.  112;  see  §  311  etwq.     . 


218  JURISDICTION    OF   COURTS    OVER    SOCIETIES. 

the  state  and  the  provisions  of  its  charter,  had  authority  to 
decide  upon  such  questions  and  to  pass  such  laws,  and  will  ex- 
amine into  the  proceedings  of  the  society  and  determine 
whether  they  are  regular  under  the  rules  prescribed  by  the  so- 
ciety. Courts  will  not  interfere  at  all  in  the  matters  of  a  society, 
where  there  are  no  civil  or  property  rights  involved,  and,  even 
where  the  controversy  is  concerning  such  rights,  courts  will 
not  act  unless  they  see  clearly  that  they  are  obliged  to  take 
jurisdiction.  They  will  only  interfere  to  protect  some  civil 
right,  or  for  the  due  disposal  and  administration  of  property.1 
At  the  regular  annual  meeting  of  a  society  a  vote  was  taken 
on  the  adoption  of  a  certain  amendment  to  the  constitution. 
The  president  decided  that  the  amendment  was  not  carried,  for 
the  reason  that  it  did  not  have  the  votes  of  two-thirds  of  all 
the  members  of  the  association  in  its  favor.  Several  persons 
protested  against  the  decision,  on  the  ground  that  it  only  re- 
quired the  vote  of  two-thirds  of  those  present,  voting  either 
in  person  or  by  proxy,  to  adopt  it.'J  A  petition  for  a  writ 
of  numdamm  was  filed  to  compel  the  oilieers  to  declare 
the  adoption  of  the  amendment.  An  agreed  statement  of 
the  laws  of  the  society  and  of  the  facts  in  the  case  was  also 
filed  in  the  cause.  The  court  in  denying  the  writ  of  man- 
damus said :  "  The  question  arises,  whether  from  this  agreed 
state  of  facts  it  can  be  inferred  that  petitioners  have  shown 
the  slightest  pecuniary  interest  in  the  settlement  of  the  ques- 
tion raised  by  the  petition.  From  the  most  careful  considera- 
tion of  the  facts,  we  are  unable  to  find  that  they,  or  either  of 
them,  have.  It  is  merely  to  settle  a  dispute  whether  or  not  a 
particular  proposed  amendment  to  the  constitution  of  the  asso- 
ciation was  adopted.  We  do  not  see,  nor  can  we  determine 
that  the  decision  of  the  question,  one  way  or  the  other,  can  or 
will  affect  the  pecuniary  interest  of  either  petitioner.  It  has 
ever  been  held  that  relief  will  not  be  granted  to  a  petitioner 
until  he  shows  that  he  has  a  clear  legal  right  which  is  denied, 
and  that  the  denial  of  the  right  affects  his  pecuniary  interest. 
This  is  a  mere  fancy  question  that  will  not,  as  now  presented, 
bo  considered  or  determined  by  the  court."  3 

'Eigby  v.  Connell,  28  W.  E.  650;       2  See  §108;  §127. 
Ellison  v.  Bignold,  2  Jacobs  &  Walker       3  People  ex  rel.  v.  Masonic  Benevo- 
503.  lent  Association,  98  111.  035. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  219 

A  court  of  equity  in  this  country  will  not  interpret  the  or- 
ganic laws  of  a  mutual  benefit  society  to  determine  whether 
subordinate  lodges  conform  to  its  tenets,  and  specifically  to 
direct  the  conduct  of  officers  and  agents  in  performing  their 
duties,  but  will  accept  the  decision  of  the  authorized  tribunals 
of  the  society.  To  interfere  in  such  matters  would  amount  to 
administering  the  internal  affairs  of  such  a  society.1  A  court 
will  not  inquire  whether  it  is  necessary  to  establish  other 
funds  and  plans  of  insurance  for  the  protection  of  the  members 
and  their  beneficiaries,  in  addition  to  those  already  established 
in  a  society,  nor  will  a  court  restrain  the  officers  of  a  society 
in  the  creation  and  dispensation  of  a  fund  which  such  society 
has,  within  the  proper  objects  of  its  existence,  provided  for. 
These  are  matters  of  internal  regulation.2  Nor  will  a  court 
interfere  to  control  the  discretion  of  the  officers  of  a  mutual 
benefit  society  in  the  management  of  the  funds  of  a  society, 
as,  for  instance,  to  direct  them  to  pay  a  death  benefit  from 
the  reserve  fund  of  the  society,  instead  of  by  levying  an  assess- 
ment when  the  reserve  fund  is  within  the  limited  amount 
which  it  may  carry.  This  is  a  matter  of  internal  regulation 
and  management.3  It  is  the  essence  of  a  voluntary  society  and 
of  its  right  to  establish  a  tribunal  for  the  decision  of  questions 
of  principle  and  policy  arising  upon  matters  of  internal  govern- 
ment,  that  its  decisions  should  be  binding  and  final,  subject 
only  to  such  appeals  as  the  society  itself  provides  for.  This 
power  to  decide  upon  such  questions  is,  in  some  respects,  anal- 
ogous to,  and  is  certainly  as  necessary  as,  the  power  to  pass 
by-laws  for  the  government  of  the  society. 

§111.  [incorporated  societies  possess  the  inherent  right,  and 
unincorporated  societies  are  usually  given  the  right  to  pass. 
alter,  amend  and  abrogate  by-laws  for  the  management  of 
their  affairs,  as  their  necessities  and  welfare  may  require. 
Their  members,  or  their  chosen  and  authorized  representatives 
are  alone  vested  with  the  power  of  determining  when  a  new 
by-law  shall  be  passed  or  an  old  one  changed  or  repealed,  and 
with  their  discretion  courts  may  not  interfere.  Were  it  other- 
wise, courts  would  control  all  corporations,  fraternities  and 

'Stadler  v.  I.  O.  B.  B.,  3  Am.  L.  'Grossman  v.  Mass.  Mutual,  143 
Rec.  589.  Mass.  433;  9  N.  East  Rep.  758. 

!  Stadler  v.  I.  O.  B.  B.,  supra. 


220  JURISDICTION    OF   COURTS   OVER   SOCIETIES. 

societies.  It  is  only  where  there  is  an  abuse  of  discretion,  and 
a  clear,  unreasonable  and  arbitrary  invasion  of  private  rights, 
that  courts  will  assume  jurisdiction  over  societies  or  corpo- 
rations. They  will  compel  adherence  to  the  charter,  and  to 
the  purpose  for  which  the  society  was  organized, -but  they  will 
do  no  more.  To  justify  interference  by  the  courts,  and  war- 
rant the  overthrow  of  by-laws  enacted  in  the  mode  prescribed 
by  the  by-laws,  it  must  be  shown  that  there  is  an  abuse  of 
power,  or,  in  case  of  an  incorporated  society,  that  the  by-law 
is  unreasonable.  It  is  not  enough  to  show  that  a  better  or 
wiser  course  might  have  been  pursued,  for  it  must  be  shown 
that  there  was  an  abuse  of  discretion. 

§  115.  Injunction  to  restrain  illegal  or  unauthorized 
act  of  the  society. — If  the  officers  of  a  society  are  about  to 
engage  in  a  method  of  doing  business,  or  in  an  enterprise,  not 
contemplated  by  its  charter  or  articles  of  association,  or  are 
about  to  apply  its  funds  or  credit  to  other  purposes  than  those 
specified  in  such  charter  or  articles,  a  court  of  equity  will  in- 
terfere by  injunction  at  the  instance  of  any  of  its  members. 
In  one  case  the  court  granted  an  injunction  restraining  the 
society  from  expending  money  in  sending  a  committee  to 
Washington  to  urge  congress  to  pass  an  amendment  to  the 
contract  labor  law,  so  as  to  include  foreign  actors  among  those 
debarred  from  entering  this  country  under  contract,  holding 
that  the  clause  in  its  constitution,  which  extends  its  benefits 
to  ''members  of  the  profession  in  all  parts  of  the  world,"  made 
it  improper  to  use  its  funds  in  discriminating  against  foreign 
actors.1  A  court  of  equity  on  a  proper  bill  may  prevent  the 
unauthorized  use  of  the  funds  of  a  society,  and  enjoin  upon  its 
officers  the  proper  application  of  them.'2 

§  116.  Injunction  to  restrain  society  from  carrying  on 
business  upon  erroneous  principles  and  plans. — An  injunc- 
tion was  granted  restraining  a  friendly  society  from  applying 
any  of  its  funds  to  the  payment  of  annuities  payable  according 
to  the  rules  and  plan  of  the  society,  when  the  annuities  charge- 
able on  the  funds  had,  in  consequence  of  the  erroneous  prin- 

1  Flocton  v.  Edwin  Forrest  Lodge,  4  Stadler  v.  District  Grand  Lodge,  3 
N.  Y.  Supp,  7.  Am.  L.  Rec.  589;  In  re  Equitable  Re- 

-  Roper  v.  Burke,  83  Ala.  193;  8  serve,  16  N.  Y.  Supp.  80;  Peniield  v. 
So.  Rep.  439;  Goodman  v.  Jedidjah  Skinner,  11  Vt.  296;  Bailey  v.  Lewis, 
Lodge,  67  Md.  117;  9  Atl.    Rep.  13;   3  Day  (Conn.)  450;  see  §  126. 


JURISDICTION   OF   COURTS    OVER    SOCIETIES.  221 

ciples  upon  which  the  plan  was  founded,  become  so  numerous 
as  to  be  likely  to  exhaust  the  whole  fund  in  the  hands  of  the 
society.1 

§117.  Status  of  unincorporated  societies  in  courts  of 
justice. — It  is  exceedingly  difficult  to  define  the  status  of 
unincorporated  societies  under  the  law.  It  seems  that  they 
were  entirely  unknown  to  the  common  law,  and  that  their 
existence  has  been  recognized  in  the  statutes  of  very  few 
states.  It  is  acknowledged  that  an  unincorporated  society  is 
sui  generis,  but  courts  do  not  agree  as  to  the  legal  principles 
which  they  will  apply  to  it.  It  is  generally  assumed,  in  the 
decisions  of  courts  upon  questions  involving  rights  under  such 
organizations,  that  they  must  either  partake  of  the  nature  of 
corporations  or  of  partnerships,  and  that,  as  the  law  does  not 
incline  to  give  the  shield  of  the  acts  of  incorporation  to  un- 
incorporated bodies,  they  must  necessarily  be  governed  largely 
by  the  rules  which  govern  in  matters  of  partnership.  If  it  be 
stated  that  such  a  society  must  be  regarded  as  a  partnership, 
it  is  not  difficult  to  cite  numerous  authorities  as  sustaining1  the 
proposition;2  but  it  is  equally  easy  to  find  authorities  which 
hold  the  contrary  doctrine.3  Many  cases  hold  that  in  some 
of  their  relations  they  are  to  be  regarded  as  partnerships,  and 
to  be  governed  by  the  general  law  of  partnerships,  and  that, 
in  other  relations,  the  law  of  corporations,  in  absence  of  a 
better  rule,  is  to  be  regarded  as  applicable  to  them.  They 
hold  that  this  distinction  is  to  be  made  in  cases  involving  the 
rights  of  third  parties  in  their  relations  with  the  society,  or 
one  or  more  of  its  members,  on  the  one  hand,  and  in  cases 
involving  the  rights  of  members,  as  between  themselves,  on 
t  be  other  hand.  The  general  rule  founded  upon  this  distinc- 
tion has  been  Laid  down  as  follows: 

" The  true  principle  is,  and  upon  this  view  the  apparenl  dis- 
cordance in  the  cases  may  be  'nearly  reconciled,  that  the  law 
allows  associates  to  imitate  the  organization  and  methods  of 
corporations  so  far  as  their  rights  between  themselves  ar<  in? 
vol/vvd,  and  will  enforce  their  articles  of  agreement  (nothing 

1  Reeve  v.  Parkins.  2  Jac.  &  Walk.  Womeraley  v.    Men-it.   L.  R.  4  Eq. 

800;  see  Pearcev.  riper.  17  Yes.  1.  Cas.  695;  Butterfield  v.  Beardsley,28 

*  Gorman  v.    Russell.    11   Cal.  537;  Mich.  412;    Brown  v.  Dale.  L.   R..  9 

Richardson  v.  Hastings,  ?  Beav.  823;  Ch.  Div.  78. 

Cockburn  v.  Thompson,  16  Vt.  321;  3  See  cases  cited  in  this  section. 


222  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

illegal  or  unconscientious  appearing)  as  between  the  parties  to 
them.  But  the  public  and  creditors  have  a  right  to  invoke 
the  application  of  the  law  of  partnership  to  the  dealings  of 
any  trading  association,  unless  such  association  has  the  shield 
of  incorporation.  Thus,  if  the  controversy  is  between  mem- 
bers of  the  association,  and  relates  to  such  subjects  as  modes 
of  acquiring  membership,  tenure  of  the  property,  division  of 
the  profits,  transfer  of  shares,  voting,  expulsion,  dissolution, 
or  the  like,  the  courts  may  deal  with  the  association  by  anal- 
ogy to  the  law  of  corporations,  so  far  as  the  compact  between 
the  members  contemplates.  But  if  the  question  is  between 
the  association  or  its  members  and  third  parties,  and  relates 
to  such  points  as  in  what  name  the  association  may  sue, 
whether  members  are  individually  liable  to  the  creditor  for 
debts,  etc.,  a  mere  compact  of  association  can  not  vary  the 
rights  of  strangers  to  it,  but  the  associates  must  submit  to  the 
general  rules  of  law  applicable  to  the  questions  raised."  ' 
An  association  for  purposes  of  mutual  benevolence  among  its 
members  only,  such  as  a  lodge  of  Odd  Fellows,  is  not  an  asso- 
ciation for  charitable  uses.  If  not  incorporated,  its  members 
are  regarded  in  law  as  partners  in  their  relations  to  third  per- 
sons, and  the  property  of  the  association  must  be  appropriated 
to  pay  the  debts  of  creditors  who  are  not  members,  before  it 
can  be  applied  toward  payment  of  the  claims  of  its  members.2 
An  unincorporated  society  organized  for  relief  in  sickness,  by 
means  of  a  fund  raised  by  subscription  of  the  members,  must 
be  considered  in  the  nature  of  a  partnership,  and  in  a  suit 
against  the  trustees  by  some  members  for  an  account,  alleging 
a  dissolution  contrary  to  the  articles,  all  other  members  must  be 
parties.3  An  unincorporated  voluntary  society  formed  for 
mutual  relief  in  sickness  or  distress,  by  funds  raised  by  initia- 
tion fees,  fines,  dues,  and  assessments  upon  its  members,  par- 
takes of  the  nature  of  a  partnership.4 

While  a  member  has  no  severable  interest  in  the  property  of 
such  a  society,  and  has  no  interest  which  is  transmissible,  yet 

1  Abb.  Dig.  Corp.,  title  Association;       4  Gorman  v.  Eussell  et  al.,  14  Cal. 
Brown  v.  Stoerkel,  74  Mich.  269.  531;  Rabb  v.  Reed,  5  Rawle(Pa.)  158; 

2  Rabb  v.  Reed,   5  Rawle  151;  28  Pearce  v.  Piper,  17  Vesey  15;  Ellison 
Am.  Dec.  650.  v.  Reynolds,   2  Jac.  &  "Walker  511; 

3  Beaumont  v.  Meredith,  3  Ves.  &  Reeve  v.  Parkins,   2  Jac.  &  "Walker 
Beame  180.  300. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  223 

the  rights  of  members  in  this  property,  and  the  modes  of 
enforcing  these  rights  are  not  materially  different  from  those 
of  partners  in  partnership  property.1  Prima  fade  the  interest 
of  each  member  in  the  property  of  the  society  is  equal  and 
proportionate,  but  his  interest  can  not  be  separated  and  reduced 
to  his  possession,  until  the  society  has  been  dissolved,  and  the 
rights  of  all  parties  in  the  property  have  been  adjusted  and 
determined.  His  interest  in,  and  right  to  use  this  property 
may  cease  by  refusal  to  comply  with  the  contract  of  association, 
by  death,  or  by  expulsion  for  improper  conduct,  and  his  rights 
in  this  regard  are  far  different  from  the  rights  of  a  partner  to 
partnership  assets.  In  one  case  it  was  held  that  the  minority 
of  the  members  are  not  entitled  to  a  decree  of  dissolution  of 
the  association  on  grounds  which  might  be  urged  for  the  dis- 
solution of  a  partnership;  that  a  society,  where  there  is  no 
power  to  compel  the  payment  of  dues,  and  where  the  right  of 
the  member  ceases  on  his  failure  to  make  such  payment,  is  not 
a  partnership.'2  A  mutual  benefit  society  formed  by  several 
persons  who  carry  on  business  substantially  for  the  benefit  of 
the  individual  members  among  themselves,  and  not  for  the  ben- 
efit of  the  society  as  such,  is  not  to  be  regarded  as  a  partner- 
ship.3 

g  118.  Dissolution  of  an  unincorporated  society. — A 
court  will  require  a  strong  case  to  be  made  out  before  it  will 
dissolve  an  unincorporated  society,  and  decree  a  sale  of  the 
whole  concern,  but  in  the  dissolution  of  such  an  association,  it 
will  be  governed  by  the  same  principles  which  obtain  in  the 
dissolution  of  partnerships.  Not  only  willful  acts  of  bad  faith 
and  fraud,  but  gross  instances  of  carelessness  and  waste  in  the 
administration  of  the  affairs  of  the  association,  as  well  as  the 
exclusion  of  members  from  their  just  share  in  the  manage- 
ment and  benefits  of  the  association,  preventing  the  business 
from  being  conducted  on  the  stipulated  terms,  are  sufficient 
grounds  for  the  dissolution  of  the  contract  of  association  by  a 
court  of  equity.  Though  the  court  stands  neuter  with  respect 
to  occasional  breaches  of  agreements  between  tin'  members  of 

i  McMahon  v.  Rauhr,   47  X.  Y.  69.  Mich.    106;  Caldicot  V.Griffiths,   33 

2  Lafond  v.  Deems,  81  N.  Y.  508.  Eng.  L,    and    Eq.'527;  8    Exch.  898; 

3  Bear  v.  Bromley.  It  Eng.  Law  2:5  L.  J.  Ex.  54:  Ash  v.  Guie,  1  Ont. 
and  Equity,  414;  Burt  v.  Lathrop,  52  493;  97   Pa.  St.  493. 


224:  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

such  an  association,  which  are  not  so  grievous  as  to  make  it 
impossible  for  the  association  to  continue,  yet,  when  it  finds 
that  the  acts  complained  of  are  of  such  a  character  that  relief 
can  not  be  given  to  the  members,  except  by  dissolution,  the 
court  will  decree  it  even  though  not  specifically  asked.  "When 
it  is  insisted  that  the  conduct  of  a  majority  of  the  members 
entitles  the  minority  to  a  dissolution,  the  court  must  consider 
not  merely  the  terms  of  the  express  contract  between  them, 
but  also  the  duties  and  obligations  implied  in  every  such  con- 
tract of  association. 

If  such  an  association  exclude  a  member  from  its  meetings, 
because  he  refuses  to  take  an  oath  to  be  administered  by  the 
president,  which  oath  is  not  required  by  the  constitution  or  the 
by-laws,  and  is  foreign  to  the  objects  of  the  association,  it  is 
ground  for  a  dissolution.1  Courts  should  not,  as  a  general 
rule,  interfere  with  the  contentions  and  quarrels  of  voluntary 
associations,  so  long  as  the  government  is  fairly  and  honestly 
administered.2  Before  a  court  will  decree  a  dissolution  of  a 
society,  opportunity  will  be  given,  where  it  can  properly  be 
done,  for  a  correction  of  the  cause  of  complaint  within  the  so- 
ciet}7.3  Where  a  majority  of  the  association  have  mistaken 
their  powers  or  duties,  and  acted  under  such  mistake,  and  are 
willing  to  correct  the  error,  a  court  of  equity  will  not  neces- 
sarily dissolve  the  association,  but  may  give  them  an  oppor- 
tunity to  correct  the  mistake.4  An  unincorporated  voluntary 
society  for  mutual  relief  having  excluded  certain  members 
from  the  association  because  of  their  refusal  to  take  an  oath 
not  required  by  its  constitution  or  by-laws  and  foreign  to  the 
objects  thereof,  these  members,  as  plaintiffs,  instituted  a  pro- 
ceeding for  the  dissolution  of  the  society  and  the  distribution 
of  its  funds.  The  supreme  court,  having  decided  on  demurrer 
to  the  complaint  that  the  society  was  a  partnership,  and  would 
be  dissolved  by  a  court  of  equity  for  improperly  excluding  a 
member,  remanded  the  cause  for  further  proceedings.  The 
society  then  rescinded  its  resolution  requiring  an  oath,  and 
filed  an  answer  offering  to  admit  the  plaintiffs  to  all  their 
rights  and  privileges. 

The  supreme  court  of  California  held  that  this  action  of  the 

1  Gorman  v.  Russell,  14  Cal.  531.  3  Gorman  v.  Russell,  supra. 

2  Lafond  v.  Deems,  81  N.  Y.  508.  4  Lafond  v.  Deems,  supra. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  225 

society  sufficed  to  prevent  a  decree  of  dissolution,  and  that  the 
bill  was  property  dismissed  in  the  court  below.1  Notice  of  a 
special  meeting  of  a  society,  which  does  not  state  the  business 
to  be  transacted,  does  not  authorize  a  vote  to  dissolve  the  asso- 
ciation and  dispose  of  its  property.2  A  voluntary  association 
instituted  for  moral,  benevolent  and  social  objects  should  not 
be  dissolved  by  the  courts  for  slight  causes,  and,  if  at  all,  only 
when  it  is  entirely  apparent  that  the  organization  has  ceased 
to  answer  the  ends  of  its  existence,  and  no  other  mode  of  relief 
is  attainable.  The  parties  to  a  proceeding  were  members  of 
an  unincorporated  association  for  moral  improvement,  relict' 
in  sickness  and  in  case  of  death.  In  an  action  brought  to  dis- 
solve the  association,  it  was  urged  that  the  association  was  di- 
vided into  factions,  that  the  feelings  of  hostility  between  the 
members  were  such  as  to  render  it  impossible  for  them  to 
aarree  as  to  the  transaction  of  its  business  and  the  care  of  its 
funds,  and  that  the  usefulness  of  the  association  had  departed. 
By  the  constitution  and  by-laws,  provision  was  made  for  re- 
dress of  grievances,  and  for  the  punishment  of  parties  offend- 
ing, and  it  was  within  the  power  of  the  association  to  suppress 
conduct  of  the  kind  complained  of.  An  appeal  was  authorized 
to  a  higher  tribunal.  No  complaint  before  the  association  had 
been  made  against  the  members  charged  by  plaintiffs  with  a 
violation  of  the  rules.  The  by-laws  provided  that  the  associa- 
tion should  not  be  dissolved,  save  by  unanimous  vote,  and  that 
no  motion  to  dissolve  should  be  entertained  so  long  as  ten 
members  remained  in  good  standing.  The  court  held  that  the 
action  was  not  maintainable;  that  plaintiffs  were  at  least  re- 
quired in  the  first  instance  to  resort  to  the  remedies  provided 
by  the  rules  of  the  association,  before  seeking  the  interposition 
of  a  court  of  equity.3 

In  the  same  proceeding  it  was  urged  as  a  further  ground  for 
the  dissolution  of  the  association,  that  it  had  hired  more  room 
than  was  necessary  for  the  meetings,  that  it  had  fitted  up. 
furnished  and  sublet  the  portion  it  did  not  require, and  rented 
its  own  room  when  not  in  use,  and  that  it  had  from  these 
rents  accumulated  a  large  fund;  but  the  court  held    that  the 

1  Gorman  v.  Russell,  18  Cal.  C88.  8  Lafond  v.  Deems,  siq)ra. 

-St.  Mary's  Association  v.  Lynch, 
64  N.  H.  213;  9  Atl.  Rep.  «JS. 
15 


226  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

association  in  such  matters  might  exercise  a  reasonable  dis- 
cretion, and  where  the  renting  of  rooms  was  merely  incidental 
to  its  primary  object,  and  the  rents  received  were  the  result  of 
accident  and  good  management,  in  the  exercise  of  a  proper 
discretion,  having  in  view  merely  the  accommodation  and 
prosperity  of  the  association,  there  was  no  such  accumulation 
of  funds  as  would  call  for  the  dissolution  of  the  association  on 
that  ground.  In  case  of  violent  dissension  and  irreconcilable 
differences  between  the  members  of  a  voluntary  association, 
judgment  will  be  rendered  at  the  suit  of  one  or  more  members 
against  all  others,  dissolving  the  society; '  but  no  action  will 
be  entertained  for  such  a  purpose  upon  mere  proof  of  differ- 
ences of  opinion,  bad  temper,  the  ordinary  disputes  common  to 
such  societies,  or  upon  proof  of  injuries  or  injustice  sustained 
by  one  member,  through  the  vote  or  action  of  the  society,  if 
he  have  another  remedy.2  Where  the  constitution  of  a  society 
provides  that  it  shall  not  be  dissolved  so  long  as  a  certain 
number  of  members  desire  its  continuance,  such  provision  is 
controlling  in  an  action  to  obtain  a  decree  of  dissolution,  and 
if  that  number  of  members  oppose  a  dissolution  when  the  vote 
is  put  in  the  society,  or,  if  there  be  no  vote,  when  the  action 
is  commenced,  dissolution  will  not  be  decreed.3  But  in  an  old 
English  case4  it  was  held  that  a  court  will  not  enjoin  a  society 
from  dissolving  itself  where  a  great  majority  of  its  members 
agree  to  such  dissolution,  notwithstanding  a  by-law  of  the 
society,  providing  that  if  "  three  agree  to  hold  the  society,  i-t 
shall  not  be  dissolved." 

§  119.  Dissolution  of  an  incorporated  society. — In  the 
absence  of  statutory  provisions,  courts  of  equity  have  no  juris- 
diction to  decree  the  dissolution  of  a  corporation,  by  forfeit- 
ure of  its  franchises,  either  at  the  suit  of  an  individual  or  at 
the  suit  of  the  state.6 

1  Roshi's  Appeal,  69  Pa.  St.  462.  6  Attorney  General  v.  Bank,l  Hopk. 

2  Fischer  v.  Raab,  57  How.  Pr.  87.    Ch.  354;  Doremus  v.  Church,  3  N.  J. 
3 Fischer  v.    Raab,  supra;  Lafond    Eq.  332;  Doyle  v.  Petroleum  Co.,  44 

v.  Deems,  supra;  St.  Mary's  Asso-  Barb.  239;  Strong  v.  McCagg,  55  Wis. 
ciation  v.  Lynch,  64  N.  H.  213;  9  624;  Slee  v.  Bloom,  5  Johns.  Ch.  366  ; 
Atl.  Rep.  98;  Kuhl  v.  Meyer,  42  Mo.  2  Mor.  Priv.  Corp.  §  1040;  see  §  121. 
App.  474. 

4  Waterhouse  v.  Murgatroyd,  9  L. 
J.  Ch.  (old  series)  272. 


JURISDICTION   OF    COUKTS    OYER    SOCIETIES.  227 

But  it  has  been  uniformly  admitted,  whenever  the  ques- 
tion has  arisen,  that  jurisdiction  to  decree  the  dissolution 
of  a  corporation  may  be  conferred  upon  courts  of  equity  by 
statute.  Whether  a  corporation  which  is  shown,  upon  a  quo 
Warranto  proceeding,  to  have  misused  or  abused  its  franchises, 
should  be  ousted  of  its  corporate  franchises,  is  a  question  not 
capable  of  determination  by  any  fixed  rule  or  test,  hut  rests  in 
the  sound  discretion  of  the  court,  in  the  light  of  all  the  cir- 
cumstances of  the  case  before  it.  Where  trustees  of  a  society 
had  operated  it  for  their  own  profit,  and  had  misused  and 
abused  its  franchise,  the  supreme  court  of  Ohio  said : 
"The  present  membership  of  the  defendant  numbers  about 
thirty-five  hundred,  chiefly  worthy  and  deserving  people,  ut- 
terly innocent,  if  not  wholly  ignorant  of  any  misuse  or  abuse 
of  its  franchises.  Purged  of  the  unfortunate  features  of  its 
management  which  this  trial  has  developed,  this  association  is 
capable  of  much  usefulness.  To  visit  the  perversion  of  its  ob- 
jects by  a  few,  upon  the  heads  of  the  entire  membership,  must 
result  in  irremediable  hardship;  and  without  stating  more  fullv 
the  grounds  of  our  action,  or  the  considerations  which  move 
us,  it  must  serve  our  present  purpose  to  say  that  the  relators' 
prayer  that  the  defendant  be  ousted  of  its  franchises  to  be  a 
corporation  is  refused.  Judgment  will  be  entered,  however, 
ousting  it  of  the  use  of  its  franchises  for  the  profit  of  its 
trustees.1 

The  charter  of  a  benefit  society  will  not  be  forfeited  because 
it  docs  an  insurance  business  in  violation  of  the  statutes,  as  this 
would  inflict  upon  many  innocent  members  a  severe  loss.  It 
will  be  permitted  to  wind  up  its  insurance  business,  and  to  con- 
tinue any  functions  it  may  have  as  a  fraternal  order,  or  it  may 
amend  its  charter  so  as  to  bring  itself  within  the  insurance 
laws  of  the  state.4 

AY  here  it  is  shown  that  the  scheme  of  insurance  as  oriffinallv 
marked  out  is  a  failure;  that  substantial  and  organic  depart- 
ures must  be  made  from  the  fundamental  scheme,  in  order  to 
save  the  society  from  ruin;  that  the  fund  is  in  danger,  and  that 
a  large  number  of  the  members  are  desirous  of  having  its  affairs 
wound  up,  the  court  will  appoint  a  receiver  for  the  society  in 

1  State  v.  Association,  42  Oh.  St.  579.       2  Order  of  Alliance  v.  State,  77  Md. 

547;  26  Atl.  Rep.  1040. 


228  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

order  to  mike  an  equitable  distribution  of  its  assets  among 
the  persons  entitled  to  them.  Where  misconduct  and  mis- 
application of  funds  on  the  part  of  the  officers,  fraud  and 
breaches  of  trust  which  endanger  the  fund,  are  charged  and 
proved,  the  court  will  appoint  a  receiver  to  protect  the  prop- 
erty, and,  if  necessary,  wind  up  the  corporation.  Mere  mis- 
takes, or  acts  of  misuser  or  non-user  are  not  enough  to  warrant 
a  judgment  of  ouster  against  an  incorporated  mutual  benefit 
society.  Such  a  society  can  not  be  dissolved  on  account  of  loss 
of  members,  so  long  as  enough  remain  to  supply  vacancies 
and  continue  the  succession.1  An  incorporated  society  organ- 
ized under  an  original  act,  against  which  an  information  in 
the  nature  of  a  quo  warranto  was  pending  at  the  time  of  the 
passage  of  an  amendatory  act,  is  entitled  in  such  suit  to  the 
benefit  of  the  amendment.2  Where  the  statute  under  which  a 
society  is  incorporated  provides  that  no  part  of  the  funds  col- 
lected for  the  payment  of  death  benefits  shall  be  applied  to 
any  other  purpose,  it  is  unlawful,  and  a  ground  of  dissolution, 
for  the  society  to  use,  in  the  payment  of  running  expenses, 
any  part  of  the  fund  acquired  from  mortuary  assessments.3 
In  quo  warranto  against  an  incorporated  society,  where  it  has 
assumed  franchises  not  granted,  and  it  appears  that  the  certifi- 
cate of  incorporation  doas  not  comply  with  the  requirements 
of  the  statute  under  which  it  is  organized,  the  cou*t,  in  the 
exercise  of  its  discretion,  will  oust  it  of  its  corporate  franchises.4 
When  a  foreign  corporation,  doing  business  in  a  state,  is  exer- 
cising its  franchises  in  contravention  of  the  laws  of  that  state, 
it  may  be  ousted  therefrom  by  proceedings  in  quo  warranto? 
It  is  not  a  ground  for  dissolution  of  a  corporation,  that  it 
provides  in  its  by-laws  that  contracts  may  be  entered  into  by 
it  with  persons  who  are  not  of  lawful  age,  and  that  it  issues 
certificates  of  membership  to  minors  in  the  regular  course  of 
its  business.8  In  this  case  the  court  said :  "  The  statute  under 
which  the  association  was  organized  is  silent  on  the  subject, 
nor  do  we  find  any  statute  which  either  expressly,  or,  so  far  as 

1  State  v.  Societe  Republicaine,  9  4  State  v.  Association,  29  Oh.  St. 
Mo.  App.  114.  399. 

-  State  v.  Association,  26  Oh.  St.  B  State  v.  Society,  47  Oh.  St.  167; 
19.  24  N.  East.  Rep.  392. 

3  Chicago  Mutual  v.  Hunt,  127  111.  6  Chicago  Mutual  v.  Hunt,  127  111. 
257;  20  N.  East.  Rep.  55.  257;  20  N.  East.  Re>  55. 


JURISDICTION   OF   COURTS    OVER    SOCIETIES.  229 

we  can  discover,  by  implication,  either  permits  or  forbids  their 
admission  to  membership.  If,  then,  minors  are  ineligible,  such 
ineligibility  arises  from  some  principle  growing  out  of  the 
nature  and  objects  of  these  associations,  or  the  policy  of  the 
law  applicable  thereto.  The  contention  is  that  the  certificate 
of  membership  is  a  personal  contract  between  the  member  and 
the  association,  and  that,  as  an  infant  is  capable  of  making 
only  a  voidable  contract,  his  admission  to  membership  is  a 
violation  of  those  principles  of  mutuality  which  lie  at  the  basis 
of  mutual  benefit  societies.  We  may  admit,  in  the  broadest 
sense,  that  these  societies  are  founded  upon  the  principle  of 
entire  mutuality  in  relation  to  burdens  as  well  as  benefits,  yet 
we  are  unable  to  see  how  that  principle  places  the  membership  of 
infants  upon  any  footing  different  from  that  of  adults.  While 
the  certificate  of  membership  is  a  contract,  such  contract,  in 
the  absence  of  express  stipulations  to  the  contrary,  is  purely 
unilateral.  It  may  be  enforced  against  the  association  where 
the  member  has  performed  all  the  prescribed  conditions,  but 
none  of  its  stipulations  are  enforceable  against  the  member.  If 
he  fails  to  pay  his  assessments  or  dues,  or  does  any  act  forbidden 
by  the  certificate  of  membership,  the  certificate  becomes  void, 
and  the  membership  ceases.  But  the  making  of  an  assessment 
or  the  maturing  of  dues  does  not  make  the  member  a  debtor 
to  the  association  so  as  to  authorize  it  to  bring  a  suit  for  its 
recovery  in  case  of  his  neglect  or  refusal  to  pay.  Payment  is 
left  wholly  to  his  discretion.  The  contract,  then,  not  being 
one  which  has  the  legal  effect  of  binding  him  to  the  payment 
of  any  money  or  the  performance  of  any  condition,  we  can  not 
see  how  it  can  be  at  all  important  whether  it  is  voidable  or 
otherwise. 

••  Performance  is  no  more  left  to  the  option  of  the  member 
where  the  contract  is  made  by  an  infant  than  when  made  by 
an  adult.  If  an  infant  performs  the  conditions  prescribed  in 
the  certificate,  he,  the  same  as  an  adult,  becomes  entitled 
to  the  benefits  thereby  secured.  If  he  fails  to  perform, 
his  membership  ceases,  and  that  is  all.  We  do  not  assent 
to  the  view  that,  as  a  further  consequence  of  his  disability, 
he'  may  recover  back  the  dues  and  assessments  he  may 
have  already  paid.  'If  an  infant  advances  money  on  a  void- 
able contract  which  he  afterward  rescinds,  he  can   not   re- 


230  JURISDICTION    OF    COURTS    OVER   SOCIETIES 

cover  this  money  back,  because  it  is  lost  to  him  by  his 
own  act,  and  the  privilege  of  infancy  does  not  extend  so  far 
as  to  restore  this  money  unless  it  was  obtained  by  fraud.' ' 
Kor  are  we  able  to  see  any  force  in  the  suggestion  that  minors 
should  not  be  admitted  to  membership  because  of  their  inca- 
pacity to  act  as  trustees,  or  to  perform  the  duties  of  members  at 
corporate  meetings,  such  as  consulting  or  giving  advice  for  the 
mutual  benefit  of  the  members,  voting  for  officers,  and  the 
like.  We  know  of  no  reason  why  the  capacity  to  act  as  trustee 
should  be  a  necessary  qualification  for  membership.  If  a 
sufficient  number  of  members  possess  the  requisite  capacity, 
so  as  to  afford  the  members  a  reasonable  and  proper  range  of 
choice  in  the  selection  of  trustees,  the  admission  of  others 
who  are  not  thus  qualified  can  work  no  injury  to  anybody.  It 
will  not  be  claimed  that  the  want  of  the  requisite  intelligence 
or  business  experience  on  the  part  of  an  adult  to  qualify  him 
to  act  as  trustee  would  render  him  ineligible  to  membership. 
But  these  are  quite  as  essential  to  the  proper  discharge  of  the 
duties  of  trustee  as  mere  legal  capacity.  There  would  seem 
to  be  no  legal  obstacle  in  the  way  of  minors  taking  part  in 
corporate  meetings,  consulting,  advising,  or  even  voting.  The 
only  objection  to  their  doing  so  grows  out  of  their  inexperience 
and  the  immaturity  of  their  judgments.  But  these  are  disqual- 
ifications which  are  not  necessarily  confined  to  persons  under 
the  age  of  twenty-one  years,  and  no  one  would  allege  them  as 
a  legal  bar  to  the  admission  of  an  adult  to  membership.  It 
should  be  remembered  that  in  this  proceeding  we  have  noth- 
ing to  do  witJi  the  good  or  bad  policy,  in  an  economic  or  busi- 
ness point  of  view,  of  admitting  minors  to  membership. 
"Whether  it  wras  wise  or  unwise  is  not  the  question.  "We  have 
only  to  determine  whether  it  was  such  a  violation  of  the  rules 
or  policy  of  the  law  as  should  subject  the  association  to  dissolu- 
tion. On  this  point  we  are  unable  to  agree  with  the  learned 
chancellor  before  whom  the  cause  was  heard;  our  opinion  being 
that,  so  far  as  this  charge  is  concerned,  the  decree  is  not  sus- 
tained." 2 

A  statute  provided  that  the  affairs  of  mutual  benefit  socie- 
ties should  be  managed  by  not  less  than  five  directors,  trustees, 

1  1  Pars.  Cont.  332.  tual  Ben.  Assn.,  135  N.  Y.  280;  32  N. 

2  But  see  contra,  In  re  Globe  Mu-   East.  Eep.  122. 


JURISDICTION    OF    COURTS    OYER    SOCIETIES.  231 

or  managers,  elected  from  and  by  the  members.  A  certificate 
of  association  provided  for  a  board  of  eight  trustees,  to  be 
elected  annually.  At  first  the  manager  and  secretary  were 
appointed  by  the  trustees,  but  in  1886  a  resolution  was 
adopted  that  the  manager  and  secretary  should  thereafter  be 
elected  annually  by  the  members.  Blank  applications  for 
membership  then  in  use  by  the  association  had  printed  upon 
them  a  blank  proxy,  authorizing  the  person  whose  name  should 
be  inserted  to  act  and  vote  for  the  member  at  all  meetings, 
and  underneath  it  was  a  request  to  the  applicant  to  sign  it  in 
blank,  to  be  filled  up  by  the  secretary.  In  accordance  with 
this  request  a  great  number  of  such  proxies  were  so  signed  and 
sent  to  the  secretary.  The  resolution  above  mentioned  was 
adopted  mainly  by  the  use  of  such  proxies.  From  that  time 
on  the  board  of  trustees  practically  ceased  to  control,  the  real 
governing  authority  being  the  manager  and  secretary,  who 
held  a  sufficient  number  of  these  proxies  to  perpetuate  them- 
selves in  office,  and  conducted  the  association  as  they  saw  lit. 
It  was  held  that  this  was  a  violation  of  law,  and  a  fraud  on 
the  members,  justifying  dissolution.'  It  is  sufficient  ground 
for  dissolving  the  association,  that  the  books  containing  the 
accounts  of  receipts  and  expenditures  are  so  confused  and  un- 
systematic as  to  make  it  almost  impossible,  even  by  the  aid  of 
experts,  to  derive  therefrom  any  certain  information  as  to  the 
financial  affairs  of  the  association." 

Where  a  statute  provides  that  associations  organized  there- 
under may  provide  for  an  accumulation  of  a  surplus  or  guar- 
anty fund,  which  shall  belong  to  the  association  and  not  to 
the  officers,  "and  shall  be  used  only  for  mortuary  benefitSj 
without  assessment,  or  applied  in  payment  of  future  assess 
ments,  or  otherwise  used  for  the  promotion  of  the  objeel  for 
which  such  funds  are  specially  provided  and  set  apart,  and 
such  use  shall  not  be  deemed  or  construed  to  mean  a  profit 
received  by  members;"  and  where  a  society  organized  under 
this  ac1  created  a  tontine  reserve  fund,  by  reserving  twenty- 
five  percent  of  the  assessments  for  death  benefits,  for  the  ap- 
portionment of  which  fund  the  members  were  divided  into 
classes,  the  surviving  persistenl  members  of  each  class  to  re- 
ceive a  distribution  at  the  end  of  ten  years,  it  was  held  that 

'Chicago  Mutual  v.  Hunt,  supra.  9Chicago  Mutual  v.  Hunt,  supra. 


232  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

such  disposition  of  the  reserve  fund  was  a  direct  violation  of 
the  statute,  justifying  dissolution.1 

§120.  When  a  society  is  dissolved  by  its  own  act  or  neg- 
lect.— A  society,  in  which  persons  must  be  elected  to  member- 
ship by  the  votes  of  existing  members,  is  dissolved  by  the 
death  of  all  the  members,  whether  it  be  incorporated  or  un- 
incorporated.2 

A  legal  surrender  of  the  corporate  franchise  of  a  mutual 
benefit  society  will  not  be  presumed  from  non-user,  or  from 
failure  to  collect  dues,  or  to  hold  meetings  for  six  months  or 
any  short  period  of  time.3  A  chapter  of  Free  Masons,  in 
1836,  disposed  of  all  their  real  and  personal  property,  con- 
sisting of  their  hall,  furniture  and  equipment,  pursuant  to  a 
vote  of  the  chapter,  and  for  twenty -three  years  held  no  meet- 
ings, elected  no  officers,  performed  no  acts  required  by  its  by- 
laws and  rules,  and  ceased  to  have  any  visible  sign  of  exist- 
ence; it  was  held  that  the  legal  existence  of  the  chapter  was 
gone,  and  that  it  was  beyond  the  power  of  the  state  chapter 
to  restore  it  to  life  so  as  to  preserve  for  it  a  continued  exist- 
ence from  1836.  A  rule  of  the  society  that  the  officers  should 
hold  their  offices  until  their  successors  were  elected,  could 
not,  in  such  a  case  as  above  stated,  operate  to  preserve  its  legal 
existence.4  The  grand  lodge  of  a  society  can  not  make  new 
regulations  subversive  of  fundamental  principles  and  land- 
marks of  the  order,  without  the  clear  consent  of  the  subordi- 
nate lodges;  nor  can  the  officers  of  a  corporation  composed  of 
several  integral  parts  dissolve  the  corporation,  without  the  full 
assent  of  the  great  body  of  the  society.  The  dereliction  of 
the  charter  by  the  heads  of  the  corporation  does  not  dissolve 
the  corporate  body  especially  if  the  remaining  members  have 
the  power  of  renovating  the  head.6 

1  Chicago  Mutual  v.  Hunt,  supra.  4  Strickland  v.  Pritchard,  37  Vt.324. 

2MorawetzonCorp.,  §1009.  5  Smith  v.   Smith,  3  Desau.  (S.  C.) 

3  State  v.   Societe  Republicaine,  9  557;  see  State  v.  Societe  Republicaine, 

Mo.  App.  114.  etc.,  9  Mo.  App.  114, 


CHAPTER  IX. 

JURISDICTION  OF  COURTS  OVER  SOCIETIES.— PART  II. 

§  121-125.  Dissolution,  trust  funds,  distribution  of  property. 

126.  Trust  funds  of  a  society. 

127.  Rights  of  contributors  to  funds. 

128.  Rights  of  members  in  property  and  funds. 

129.  Revocation  of  social  and  fraternal  charter. 

130.  Mutual  benefit  society  is  not  a  public  charity;  taxation. 

§  121.  Dissolution,  trust  funds,  distribution  of  property 
on  dissolution. — The  dissolution  of  a  voluntary  society  can 
not  be  prevented.  It  is  in  the  power  of  any  association, 
whether  incorporated  or  not,  except  such  as  are  created  for 
the  administration  of  political  or  municipal  authority,  to  dis- 
solve itself  by  its  own  assent.  This  has  been  repeatedly  ad- 
judged. But  it  by  no  means  follows  that  the  members  of  a 
society  holding  funds  in  trust,  or  of  a  body  incorporated  for 
eleemosynary  purposes,  can  on  such  dissolution  appropriate 
its  funds  among  themselves.  Mere  monied  corporations,  in 
which  the  funds  are  owned  solely  by  the  stockholders,  and  are 
not  held  in  any  manner  for  charitable  or  public  use,  may  do 
this,  but  no  others.  The  society  may  be  dissolved,  but  the 
trust  fund  is  not,  therefore,  to  be  either  distributed  or  aban- 
doned. It  is  an  established  maxim  in  equity  that  no  trust 
shall  fail  for  want  of  a  proper  trustee.  Such  fund  may  be 
saved  to  carry  out  the  original  purposes  and  wishes  of  the 
donors  or  contributors.  Although  a  court  of  equity  may  nol 
decree  a  dissolution  of  an  incorporated  society  unless  that 
power  be  expressly  conferred  by  statute,1  yet,  in  virtue  of  its 
general  jurisdiction  over  trusts,  it  has  jurisdiction  to  grant 
relief  against  an  incorporated  society  upon  the  same  terms  as 
against  an  individual  under  similar  circumstances,  and  it  will 
interfere  to  prevent  an  actual  or  threatened  misapplication 
of  its  funds. 

'See  §119. 

(233) 


234  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

Where  the  funds  of  a  masonic  lodge  have  accumulated  under 
a  by-law  providing  that  they  shall  be  appropriated  "  for  the 
good  of  the  craft,  or  the  relief  of  indigent  and  distressed 
worthy  masons,  their  widows  and  orphans,"  these  funds  are  in 
the  hands  of  the  acting  members  for  a  charitable  use,  and  a 
dissolution  of  the  lodge  and  a  division  of  the  funds  among  the 
acting  members  for  their  private  use,  is  a  violation  of  the 
trust  on  which  they  were  raised.1  In  1870,  a  subordinate 
charitable  society  was  incorporated,  chartered  and  organized 
under  the  powers  and  regulations  of  the  general  council 
of  the  association.  One  of  the  provisions  of  its  charter 
was  that,  if  it  should  dissolve,  its  charitable  funds  should 
be  paid  over  to  the  general  council,  and  be  held  and  dis- 
bursed by  the  latter,  according  to  its  rules.  These  rules  pro- 
vided for  holding  the  funds  by  that  council  in  trust  for 
the  purposes  to  which  the  widows'  and  orphans'  fund  was 
devoted  originally,  and  for  refunding  them  if  the  subordinate 
council  should  reorganize.  In  1881,  the  subordinate  council 
voluntarily  disbanded,  surrendered  its  charter  to  the  general 
council,  and,  under  a  resolution,  divided  all  its  charitable  funds 
among  its  members  then  in  good  standing.  The  court  held 
that  it  had  jurisdiction  to  compel  those  participating  in  the 
division  to  refund  to  the  general  council  the  money  so  received 
bv  them.2  A  mutual  benefit  society  which  has  created  an  en- 
dowment fund  can  not,  on  being  refused  a  license  by  the  state 
in  which  it  was  incorporated,  and  thus  being  compelled  to 
cease  business,  organize  a  new  company,  and,  against  the  pro- 
test of  parties  insured,  use  such  endowment  fund  to  obtain  re- 
insurance of  the  old  members  in  the  new  society;  and  the 
members  insured,  in  such  case,  may  proceed  in  a  court  of 
equity  to  wind  up  the  affairs  of  the  old  society  and  compel  the 
distribution  of  such  fund  among  those  for  whose  benefit  it  was 
created.3  A  contract  by  which  an  incorporated  mutual  benefit 
society  undertakes  to  pay  from  its  own  mortuary  fund  the 
losses  of  another  society  is  ultra  vires  and  void.4 

The  minority  of  the  members  of  a  lodge,  having  been  out- 

1  Duke  v.  Fuller,  9  N.  H.  536.  4Twiss  v.  Association   (Iowa),    55 

2  State  Council  v.  Sharp,  38  N.  J.    N.  W.  Rep.  8. 
Eq.  24. 

3Stamm  v.  Association,   65  Mich. 
317;  32  N.  W.  Rep.  710. 


JURISDICTION    OF   COURTS    OVER    SOCIETIES.  235 

voted  upon  the  question  of  the  disposition  of  its  funds,  brought 
an  action  against  its  trustees,  charging  them  with  an  intention 
to  divert  the  funds,  and,  by  concealing  the  fact  of  the  vote, 
obtained  an  injunction  and  the  appointment  of  a  receiver, 
which  action  the  court  revoked  upon  full  information.  Sub- 
sequently the  district  grand  lodge,  at  the  instigation  of  the 
minority  of  the  lodge,  revoked  the  fraternal  charter  of  the 
lodge  referred  to,  and  thereupon  the  minority  filed  a  bill  in 
their  individual  names  for  a  proportion  of  the  funds,  alleging 
that  the  lodge  had  ceased  to  exist  "  through  no  fault  of  theirs." 
The  court  held  that  the  conduct  of  plaintiffs,  who  had  vol- 
untarily seceded  from  the  lodge,  and  formed  a  separate  lodge 
under  authority  of  the  district  grand  lodge,  was  so  unfair  and 
inequitable  as  to  preclude  them  from  relief.  Courts  will  never 
recognize  as  valid  any  rule  or  law  of  a  mutual  benefit  society, 
the  effect  of  which  is  to  confiscate  property,  or  arbitrarily  take 
away  property  rights  from  one  set  of  members  and  give  them 
to  another  set;  and  where  a  minority  of  the  members  claim 
title  to  the  property  of  the  society  under  an  arbitrary  for- 
feiture of  the  charter  of  a  subordinate  lodge  by  the  supreme 
lodge  of  the  society,  they  can  not  recover.1 

i'hf  facts  in  this  ease  showed  that  the  trustees  had  appropri- 
ated from  nine  to  ten  thousand  dollars  of  the  funds  of  the  old 
society,  amounting  to  about  fifty  thousand  dollars,  and  had  paid 
tin- same  to  the  new  society  for  reinsurance  of  members  who 
hail  insured  in  the  new  company  and  accepted  a  cancellation 
of  their  certificates  of  membership  in  the  old  society.  The 
court  said:  "These  facts  show  the  necessity  forthe  interposi- 
tion of  a  court  of  equity  to  prevent  a  further  misapplication  of 
the  funds  of  the  old  association,  and  to  decree  an  equitable  dis- 
tribution thereof.  Otherwise,  what  is  to  become  of  this  large 
accumulation  of  money  now  in  the  hands  of  the  trustees  i 
The  new  association  is  not  entitled  to  it.  The  trustees  have 
no  righl  t«>  appropriate  it.  It  can  not  he  used  in  carrying  out 
the  purposes  for  which  it  was  created.  There  is  no  equity  in 
applying  it  to  the  payment  of  death  losses  in  full,  as  they 
occur,  for,  aside  from  there  being  no  contract  to  that  effect,  it 
Would,    in    the     natural    COUrse    of    events,    he    exhausted     long 

'Goodman  v.  Jedidjah  Lodge,  67  Mil.   117;  9  Ail.   Rep.  18;  see  §§  128 
L89. 


236  JURISDICTION   OF    COURTS   OVER    SOCIETIES. 

before  membership  in  the  association  would  be  terminated  by 
death,  and  the  surviving  members  would  receive  nothing."  If 
there  has  been  a  perversion  of  the  funds  of  a  society,  a  court  of 
equity,  on  a  proper  bill  may  prevent  the  further  unauthorized 
uses  of  them,  enjoin  on  its  officers  the  proper  appropriation  of 
them,  and  hold  such  officers  to  account  for  the  amount  per- 
verted.1 

§  122.  "Where  the  contract  of  insurance  provides  for  a  re- 
serve fund  to  be  used  only  for  mortuary  benefits,  without  as- 
sessments, or  applied  otherwise  for  the  promotion  of  the  object 
for  which,  by  the  by-laws,  it  is  set  apart,  it  is  a  trust  fund,  and 
may  not  be  diverted  from  such  objects.  Under  such  a  con- 
tract, a  society  had  accumulated  a  reserve  fund  of  $518.68,  but, 
despairing  of  success,  the  directors  and  the  society  filed  a  bill 
to  wind  up  the  corporation.  The  beneficiary  of  a  member 
who  died  subsequent  to  the  filing  of  the  bill  filed  a  cross-bill, 
claiming  that  there  was  due  from  the  society  eighty  per  cent, 
of  the  amount  which  could  be  collected  from  the  certificates  in 
force,  not  to  exceed  $1,000,  alleging  that  all  other  claims 
had  been  paid  except  his,  and  that  there  remained  in  the  re- 
serve fund  the  above  amount;  and  asking  that  this  money  be 
decreed  to  him.  The  directors  set  up  by  way  of  answer  to 
the  cross-bill  that  they  had  advanced  $1,058.51  from  their  own 
money  to  pay  the  last  claim  against  the  society,  in  favor  of 
one  Pierce,  in-order  to  avoid  making  an  assessment;  that  when 
the  resolution  was  passed  to  wind  up  the  corporation  there 
was  in  the  reserve  fund  $518.68,  and  that  said  sum  was  ap- 
plied in  payment  to  the  directors  upon  the  amount  which  they 
had  advanced  to  the  death  fund,  and  that  there  was  still  due 
the  directors  something  over  $500.  The  court  below  found 
that  the  claim  of  this  beneficiary  was  the  only  outstanding 
claim  against  the  society  on  account  of  a  death  loss,  and  that 
there  was  in  the  hands  of  the  directors  $518.68  belonging  to 
the  reserve  fund,  realized  from  assessments  for  death  losses, 
and  ordered  the  directors  to  pay  that  sum  to  the  claimant. 
On  appeal  the  court  said :  "  We  think  this  action  of  the  court 
was  correct.  It  was  the  duty  of  the  directors  to  make  an  as- 
sessment upon  the  members  to  pay  the  death  claim  of  Pierce, 
and  if,  instead  of  doing  so,  they  saw  fit  to  advance  their  own 

1  Roper  v.  Burke,  83  Ala.  193;  3  So.  Rep.  439. 


JURISDICTION   OF    COURTS    OVER   SOCIETIES.  237 

money  to  discharge  said  claim,  they  did  not  thereby  gain  a 
right  to  appropriate  the  reserve  fund  in  payment  to  themselves 
of  such  advance,  so  long  as  there  was  any  certificate  holder 
who  had  the  right  to  have  such  reserve  fund  paid  out  to  him 
as  a  mortuary  benefit.  By  force  of  the  statute,1  and  under  the 
terms  of  the  certificates  which  the  association  issued,  such 
reserve  fund  was  a  trust  fund  to  be  used  only  for  mortuary  ben- 
efits, without  assessments,  or  applied  otherwise  for  the  promo- 
tion of  the  object  for  which,  by  the  by-laws,  it  was  set  apart. 
The  advance  of  the  directors  made  them  only  ordinary  cred- 
itors, and  the  trust  fund  could  not  be  used  to  pay  such  debts, 
if  there  were  trust  purposes  to  which  it  could  be  applied.  No 
doubt  the  act  of  the  directors  in  advancing  the  money  was  in 
good  faith,  and  done  for  what  they  regarded  as  the  best  inter- 
est of  the  association,  but  the  good  faith  of  their  act  in  ad- 
vancing the  money  did  not  take  them  out  of  the  class  of  ordi- 
nary creditors.  *  Those  holding  death  claims  have  the  first 
right  to  be  paid  out  of  the  reserve  fund  when  the  association 
is  not  in  a  condition  to  pay  their  claims  by  a  regular  assess- 
ment."3 

A  death  claim,  which  had  been  approved  before  the  levy  of 
the  last  assessment  made  before  suit,  has  no  priority  over  other 
death  claims  where  the  assessment  in  question  was  not  made 
to  satisfy  that  particular  claim,  but  merely  to  increase  the 
death  fund.'  The  constitution  of  a  society  provided  that  the 
reserve  fund  should  be  paid  only  to  those  members  who  were 
living  when  the  fund  was  to  be  divided,  and  who  had  paid  all 
ssments.  After  the  suit  to  dissolve  the  society  had  been 
begun,  an  assessment  wasmade  by  order  of  court.  Itwas  held 
that  those  who  paid  such  assessment  were  entitled  to  be  repaid 
such  assessment  in  fall  out  of  the  reserve  fund,  and  that  the 
balance  should  he  divided  pro  rata  among  those  members 
who  had  paid  all  assessments  up  to  the  commencement  of  the 
suit,  regardless  of  the  last  assessment,  since  the  pendency 
of  the  suit  was  a  sufficient  excuse  for  the  members  who 
failed    to    pay  the   last    assessment.4       The  constitution    of    a 

•Sec.  L29,  Chap.  7:$,  Starr  &  C.  Illi-  *  In  re  Equitable   Association,  131 

nois  Statutes.  N.  Y.  :s~>t:  80  N.  East.  Rep.  114,  mod 

•  Wilber  v.  Torgerson,  -I  111.  App.  ifying  16  N.  Y.  Supp.  80,  supra. 

119;  see  Jn  re  Equitable  Associa-  *  In  re  Equitable  Association, supra. 
tion.  10  X.  Y.  Supp.  80. 


238  JURISDICTION   OF   COURTS    OVER    SOCIETIES. 

society  provided  that  assessments  should  be  applied  to  the 
creation  of  two  distinct  funds,  one  of  which  was  a  death 
fund,  and  the  other  a  reserve  fund;  that  death  claims  should 
be  paid  from  the  death  fund,  and  that  no  death  claim  should 
be  paid  from  the  reserve  fund,  except  on  a  contingency  which 
had  never  happened.  The  society  was  dissolved  and  a  receiver 
placed  in  charge  of  its  property.  It  was  held  that  although 
the  death  fund  was  insufficient  to  pay  the  death  claims  in  full 
the  beneficiaries  were  not  entitled  to  share  in  the  reserve  fund. 
The  time  at  which  to  determine  who  may  share  in  the  reserve 
fund  and  who  may  share  in  the  death  fund,  is  the  date  of  the 
commencement  of  the  suit,  and  not  the  date  of  the  decree  of 
dissolution.1  Where  the  by-laws  of  a  society  provided  for 
the  payment  of  a  specific  sum  to  each  member  in  case  of  sick- 
ness or  disability  caused  by  accident,  and,  in  case  of  death  for 
the  payment  of  a  sum  to  his  beneficiary,  on  dissolution  and 
distribution  of  its  assets,  the  claims  of  members  for  benefits  in 
cases  of  sickness  beginning  or  accidents  occurring  before  disso- 
lution, as  well  as  cases  of  death,  will  be  held  to  be  preferred 
claims.  The  right  to  benefits  does  not  terminate  with  the  dis- 
solution.4 On  dissolution  death  losses  must  be  paid  pro  rata, 
although  an  assessment  for  a  particular  loss  has  been  made  and 
collected,  but  not  paid  over.3 

The  charter  and  by-laws  of  a  society  created  a  mortuary 
fund  and  a  security  fund.  It  was  provided  that  if  the  society, 
after  a  specified  time,  should  be  unable  to  pay  out  of  the  mor- 
tuary fund,  the  maximum  indemnity  called  for  by  the  certifi- 
cates issued,  then  it  should  be  the  duty  of  the  trustees  at  once 
to  convert  the  security  fund  into  money  and  distribute  the 
same  "  among  the  holders  of  the  certificates  then  in  force,  or 
their  legal  representatives,  in  the  proportion  which  the  amount 
of  each  of  their  certificates  shall  bear  to  the  amount  of  the 
whole  number  of  such  certificates  in  force.  It  was  held  that 
representatives  of  deceased  members,  whose  certificates  had 
not   been   paid  in   full  out  of  the  mortuary  fund,  were  not 

1  In  re  Equitable  Association,  su-  Commonwealth  v.  Ins.  Co.,  119  Mass. 
pra  .but  see  Commonwealth  v.  Amer-  45;  Taylor  v.  Ins.  Co.,  46  Minn.  198; 
ican  Life  (Pa.  St.),  29  Atl.  Rep.  660.  48  N.  W.  Rep.  773. 

2  Baltimore  v.  Association,  77  Md.  3  Ellerbe  v.  Association,  106  Mo, 
566;  26  Atl.  Rep.  1045  ;  see  Mayer  v.  13;  Ellerbe  v.  Association,  114  Mo. 
Attorney  General,   32  N.  J.  Eq.  813;  501. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  239 

entitled  to  priority  over  living  members  in  the  distribution  of 
the  security  fund,  but  that  both  classes  were  placed  on  equal 
terms,  and  that  the  fund  should  be  divided  among  the  living 
members  and  the  representatives  of  deceased  members  in  pro- 
portion to  the  amount  of  their  respective  certificates.1  AVhere 
a  foreign  corporation,  consisting  of  a  governing  body  and  local 
branches,  becomes  insolvent,  and  the  by-Jaws  ret  pure  a  part  of 
each  assessment  received  by  the  local  branches  to  be  set  aside 
as  a  reserve  fund,  to  be  the  property  of  the  governing  body, 
but  to  be  retained  by  the  branch  and  invested  by  it,  the  reserve 
fund  of  a  branch  in  one  state  will  be  distributed  among  the 
members  of  such  branch  in  proportion  to  the  assessments  paid 
by  them.2 

§  123.  It  may  be  stated  on  principle  and  authority  that 
when  a  corporation  is  virtually  dead,  although  the  term  of  its 
existence  as  limited  by  law  has  not  expired  and  it  has  in  its 
possession  property  or  assets  which  can  not  be  used  in  carry- 
ing out  the  purposes  of  its  organization,  courts  have  juris- 
diction to  distribute  such  property  and  assets  among  its  mem- 
bers or  beneficiaries  upon  such  a  basis  as  shall  be  just  and 
equitable.  "Where  the  functions  of  a  corporation  have  ceased, 
its  managers  are  bound  to  account  for  all  moneys  belonging 
to  it,  and  when  such  moneys  are  improperly  retained  by  them, 
the  court  will  on  proper  application  enter  a  decree  against 
them  and  recover  the  funds,  in  order  that  they  may  be  distrib- 
uted among  those  persons  who  are  equitably  entitled  to  them. 

A  mutual  benefit  society,  the  dues  of  which  were  to  be  used 
to  pay  to  the  widows  of  members  fifteen  dollars  per  month 
during  widowhood  and  good  deportment,  in  the  judgment  of 
the  directors,  being  dissolved,  the  fund  in  the  treasury  at  the 
time  of  the  dissolution  was  ordered  to  be  distributed  as 
follows:  The  valued  annuity,  by  annuity  tables,  of  each 
widow's  lilV.  . 'it  tlif  date  of  dissolution,  al  the  rate  of  fifteen 
dollars  per  month,  must  be  first  ascertained,  without  taking 
into  consideration  the  possibility  of  her  marrying  again,  or  not 
properly  conducting  herself,  and  the  fund,  if  insufficient,  paid 

Kentucky   Mutual  v.  Turner.  89      'Lindguisl    v.   Glinea,  28  X.    Y. 
Ky.  666;     20  s.   W.   Rep.   888;    Bee   Supp.  872;    8  Misc.  Rep.  814. 

Commonwealth  v.  Am.  Ins.  Co.  (Pa. 
St.),  29  Atl.  Rep-  060;  M->  29  Atl.  Rep. 
TUT. 


240  JURISDICTION   OF   COURTS    OYER    SOCIETIES. 

pro  rafa,  and  if  sufficient  to  pay  the  annuities  in  full,  the 
remainder  to  be  divided  equally  among  the  members  surviving 
at  the  date  of  dissolution.  The  widows  of  those  dying  since 
[issolntion  were  nut  to  have  their  annuity  value  reckoned  and 
allowed,  but  were  required  to  work  out  their  rights  through 
the  estates  of  their  deceased  husbands.  The  rights  of  a  widow 
who  remarried  prior  to  distribution  ceased  on  such  remarriage. 
though  she  again  became  a  widow,  for  she  is  then  the  widow 
of  the  last,  and  not  of  the  first  husband.  Where,  by  reason  of 
the  surviving  members  not  being  made  parties,  no  final  dis- 
tribution was  made,  and  by  reason  of  s<>me  of  the  widows  who 
were  made  parties  being  in  default  for  answer,  another  widow 
receives,  under  decree  of  court,  more  than  the  present  value  of 
her  annuity,  she  is  not  to  be  compelled  to  repay  the  excess,  on 
the  stockholders  being  made  parties,  and  the  other  widows 
then  insisting  on  their  rights.  Where,  by  investment  of  the 
fund  after  dissolution  and  before  final  distribution,  it  has  in- 
creased, each  widow  is  entitled  to  the  portion  of  the  net  ac- 
cumulations produced  by  the  investment  of  the  amount  due 
her  on  her  annuity  value.1  A  mutual  benefit  society,  organ- 
ized to  pay  monthly  to  the  widows  of  members  a  sum  of 
money,  which  has  the  right  to  dissolve  at  any  time  on  the  votes 
of  a  certain  number  of  members,  if  so  dissolved,  can  not  be 
administered  by  a  court  of  equity  in  perpetuity,  by  the  con- 
tinued collection  of  dues,  but  the  funds  in  the  treasury  must 
be  distributed,  and  the  society  wound  up.3 

The  certificates  of  a  mutual  benefit  society  provided  for 
payment  of  death  benefits,  not  exceeding  $1,000,  by  ass<  ss- 
ment  on  its  members,  and  for  payments  to  a  "  safety  fund." 
which  was  to  enure  to  the  benefit  of  members  of  five  years' 
standing  by  having  the  income  of  it.  after  five  years,  or  after 
it  had  amounted  to  $100,000,  applied  to  the  payment  of  future 
dues.  If  after  that  time,  the  association  should  fail  to  pay  the 
indemnity  provided  in  the  certificates,  the  fund  was  to  be  di- 
vided among  all  the  holders  of  certificates  then  in  force,  but 
the  fund  should  "  be  in  no  way  chargeable  or  liable  for  any 
use  or  purpose  except  as  above  mentioned."  The  society  failed 
before  the  five  years,  and  while  the  fund  was  only  $19,000. 

1  Collier  v.  Association,  1  Cin.  Law       -  Collier  v.  Association,  supra. 
Bulletin  18. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  241 

The  supreme  court  of  Massachusetts  held  that  the  safety  fund 
must  be  divided  among  all  the  holders  of  certificates  in  force, 
or  their  legal  representatives,  in  the  proportion  which  the 
amount  of  the  certificates  of  each  should  bear  to  the  amount 
of  the  whole  number  of  certificates  in  forca;  that  the  date  to 
be  adopted  in  taking  this  account  should  bs  the  date  of  the  filing 
of  the  bill  for  the  dissolution  of  the  society;  that  the  safety 
fund  could  not  be  taken,  by  attachment  or  otherwise,  by  the 
holders  of  death  claims,  notwithstanding  general  expressions 
on  the  back  of  the  certificates  asserting  that  the  society  pro- 
vided substantial  protection  for  the  families  and  dependents  of 
deceased  members  by  means  of  the  safety  fund;  that  the  legal 
representatives  of  holders  of  certificates  who  died  without 
having  incurred  any  forfeiture,  and  who  had  not  had  any 
benefit  from  an  assessment  to  pay  the  death  loss,  though  not 
entitled  to  maintain  any  claim  upon  the  safety  fund  in  conse- 
quence of  such  death,  should  share  in  the  division.1  Where,  in 
such  a  case,  the  by-laws  of  the  society  provide  that  a  certificate 
shall  lapse  by  reason  of  the  non-payment  of  a  certain  sum 
toward  the  safety  fund  within  one  year  from  the  date  of  the 
certificate,  the  payment  of  such  sum  after  a  bill  for  dissolution 
has  been  filed,  but  within  one  year  from  the  date  of  the  cer- 
tificate, will  keep  it  in  force  so  as  to  entitle  its  holder  to  share 
in  the  safety  fund,  but,  unless  it  appears  that  such  payment 
was  made  within  the  year,  the  holder  is  not  entitled  to  share  in 
it,  for  it  is  manifestly  contrary  to  the  true  intent  of  the  con- 
tract to  permit  holders  who  have  contributed  nothing  toward 
it,  to  share  in  the  division  of  the  fund.  The  non-payment  of 
an  assessment  made  prior  to  the  filing  of  a  bill  for  dissolution, 
within  the  time  limited  for  its  payment,  after  notice  given  as 
required,  will  invalidate  a  certificate,  so  as  to  preclude  its 
holder  from  sharing  in  the  safety  fund.11 

1  Burdon    v.    Mass.   Safety    Fund  was  organized  under  statutes  of  Mas- 

Assn..  147  Mass.  360;  17  N.  East.  Rep.  sarhusetts,  1888,  c.  421).  as  amended 

874:  6  N.  Eng.  Rep.  840;  see  Mayer  by  St.   1890,  <•.  841,  which  provided 

v.  Attorney  General,  32  N.  J.  Eq.  815;  that  all  the  money  derived  from  the 

9  Ins.  Law  Jour.  671;  Bank  v.  Bank,  first-class   assessments    therein    pro- 

23  Pick.  480,  489.  vided  for  should  lie  divided  into  two 

*  Burdon    v.    Association,    supra,  funds, — one  to  be  set  aside  as  a  re- 

The  Order  of  the  Golden  Lion,  a  mu-  serve  fund  for  the  exclusive  paymrnt 

tual  benefit  insurance  corporation,  of  matured  endowment  certificates, 
16 


242 


JURISDICTION    OF    COURTS    OVER    SOCIETIES. 


§  124.  The  filing  of  a  bill  to  wind  up  an  incorporated 
society,  is  an  invitation  to  all  persons  to  present  their  claims 
against  it,  and  in  such  a  case,  claims  not  due  at  law  will  be 
accelerated  so  as  to  share  in  the  assets.     It  would  be  flagrantly 


and  the  other  to  constitute  a  benefit 
fund,  to  be  applied  exclusively  to  the 
payment  of  disability  benefits, — and 
that  no  portion  of  the  moneys  so  re- 
ceived should  be  used  for  any  other 
purpose.  The  act  further  provided 
for  assessments  to  meet  expenses.  A 
receiver  was  appointed  for  the  corpo- 
ration in  a  suit  to  wind  up  its  affairs. 
Held  that,  though  the  business  prose- 
cuted by  the  corporation  may  have 
been  illegal,  and  ultra  vires,  the  cer- 
tificate holders  are  not  entitled  to  re- 
cover the  moneys  paid  by  them  in 
assessments  and  initiation  fees,  as  for 
money  had  and  received,  but,  in  dis- 
tributing the  assets,  each  should  re- 
ceive from  the  fund  derived  from 
assessments  of  the  first  class  a  divi- 
dend in  proportion  to  the  amount 
paid  by  him  into  that  fund. 

The  date  of  filing  the  bill  for  a  re- 
ceiver of  the  corporation  is  to  be 
taken  as  the  date  which  fixes  the 
rights  of  the  parties.  • 

The  law  governing  such  corpora- 
tions provided  that  any  member  who 
should  fail  to  pay  an  assessment 
within  thirty  days  from  the  date  of 
the  call  should  stand  suspended,  but 
that  thirty  days  should  be  allowed 
for  reinstatement,  by  the  payment  of 
a  fine.  An  assessment  was  laid  Sep- 
tember 19th,  payable  October  19th, 
and  the  right  to  reinstatement  ex- 
pired November  18th.  The  bill  for  a 
receiver  and  an  injunction  was  filed 
November  18th,  and  service  made, 
and  an  injunction  granted,  Novem- 
ber 19th.  It  did  not  appear  that  the 
members  knew  of  the  injunction  on 
the  18th,  or  were  prevented  from 
paying  their  assessments.  Held,  that 
holders  of  certificates  who  failed  to 


pay  the  assessment  by  November  18th 
are  not  entitled  to  prove  their  claims 
against  the  assets.  Members,  how- 
ever, who  failed  to  pay  an  assessment 
laid  October  20th, payable  November 
19th,  are  entitled  to  prove  their 
claims,  as  they  were  excused  by  the 
legal  proceedings  on  November  19th 
from  payment  to  procure  reinstate- 
ment. 

Payments  made  to  a  certificate 
holder  on  account  of  sick  or  disability 
claims  are  to  be  deducted  from  the 
money  paid  in  by  him,  and  the  bal- 
ance, only,  is  provable;  but  no  com- 
putation of  interest  should  be  made 
on  sums  paid  for  sick  or  disability 
benefits. 

Though,  while  the  business  of  the 
corporation  was  carried  on,  the  rela- 
tions of  the  certificate  holders  to  it 
were  such  that  their  rights  under 
their  certificates  could  not  be  as- 
signed, after  the  injunction  against 
further  business  they  could  assign 
their  claims,  subject  to  rights  of  set- 
off and  other  equities  against  them. 

An  assessment  for  expenses  was 
made,  and  some  of  the  certificate 
holders  paid  the  same,  prior  to  the 
injunction.  The  general  fund  appro- 
priated for  expenses  in  the  receiver's 
hands  was  insufficient  to  pay  cred- 
itors of  the  corporation  in  full,  but 
payment  of  the  assessment  by  all  the 
certificate  holders  would  give  more 
money  than  needed.  Held,  that  the 
assessment  should  be  treated  as 
valid,  and  enforced  for  a  sum  suf- 
ficient to  pay  the  debts.  Those  cer- 
tificate holders  who  have  paid  the 
assessment  should  have  their  propor- 
tion deducted  therefrom,  and  the 
balance    refunded,   and   those    who 


JURISDICTION    OF    COUKTS    OVER    SOCIETIES.  243 

unjnst  for  tlie  court  to  proceed  to  wind  up  a  corporation  and 
distribute  its  assets,  part  of  which  are  trust  funds,  and  leave 
unpaid  a  just  claim  entitled  to  have  such  funds  appropriated 
to  its  discharge,  because  if  the  society  Was  continuing  in  busi- 
ness, it  could  not  be  sued  thereon  at  law  until  after  the  lapse 
of  a  given  number  of  days.  A  certificate  issued  to  a  mem- 
ber, provided,  among  other  things,  that  within  sixty  days  after 
the  receipt  of  evidence  by  the  society  of  her  death,  it  would 
pay  to  her  husband  the  amount  of  one  assessment.  The 
directors  of  the  society  filed  a  bill  to  wind  up  the  corporation, 
and  afterward  the  member  died.  Her  husband,  as  the  bene- 
ficiary of  her  certificate,  immediately  after  her  death  filed  a 
cross-bill  claiming  that  the  amount  of  the  reserve  fund  should 
be  paid  him  on  the  death  claim.  The  society  objected  that 
the  claim  was  premature,  as  it  would  have  sixty  days  after 
notice  of  death  in  which  to  pay  it;  but  the  court  held  that  as 
the  original  bill  was  filed  to  wind  up  the  society  and  dis- 
tribute its  assets,  and  the  claimant  had  an  interest  in  the  sub- 
ject-matter of  the  proceeding  and  had  filed  his  cross-bill  for  a 
proper  purpose,  to  wit,  to  prevent  the  misappropriation  of  a 
trust  fund,  the  court  had  full  jurisdiction  of  the  whole  matter 
and  a  right  to  do  complete  justice  b}r  ordering  the  fund  to  be 
paid  to  him.1 

have  not  paid  should  have  their  pro-  fund  derived  from  the  first  class  of 

portion  of  the  debts  deducted  from  assessments,  but  not  against  the  gen- 

their  dividends.  eral  or  expense  fund.     Fogg  v.  Su- 

The    holders  of  certificates,   who  preme  Lodge,  159  Mass.  9;  33  N.  East, 

have  Lost  their  right  to  prove  claims  Rep,  692;  seeFoggv.  Supreme  Lodge, 

against  the  reserve  or  benefit  fund  by  156  Mass.  431. 

failing  to  pay  assessments,  can  not  '  Wilber  v.  Torgerson,  ~2\  111.  Appj 
escape  the  effect  of  Buch  failure  by  119.  Under  Rev.  St.  ?'  1232,  of  En- 
mowing  that  the  assessments  were  diana,  providing  that  a  "receiver  may 
illegal  because  of  irregularities, where  be  appointed  when  a  corporation  lias 

they     allowed     the   other    certificate    been  dissolved,  or  is  insolvent,  or  ill 

holders  to  pay,  and  failed  to  make  imminent  danger  of  insolvency,   or 

such    objection,  or    make  it    known  has    forfeited   its    corporate  rights,  a 

that  they  would  jnsist  on  their  rights,  court  of  equity  has  jurisdiction   to 

Holders   of   certificates,   who   re-  appoint  a  receiver  in  proceedings  to 

ceived  checks  in  payment  of  sick  or  secure  an  accounting  of  the  officers, 

disability  benefits,  or  otherwise,  and  and  the  application  of  the  funds  to 

failed  to  collect  them  bet,, re  the  cor-  the  proper  objects  of  the  corporation, 

poration  was  enjoined,  are  not   en-  The  right    to   have    a    receiver  ap- 

titled  to  have  the  checks  paid  in  full,  pointed  for  a  corporation  exist-  as 

but  may  prove  the  same  against  the  well    in    a     policy    holder     therein, 


214  JURISDICTION   OF    COURTS    OVER    SOCIETIES. 

Where  a  mutucal  benefit  association,  with  branches  in  several 
states,  becomes  insolvent,  and  a  receiver  is  appointed,  the 
benefit  and  reserve  funds  should  be  proportionally  distributed 
among  the  certificate  holders,  regardless  of  their  residence,  to 
which  end  certificate  holders  who  have  attached  property  of 
the  association  will  be  excluded  from  any  share  in  such  funds 
unless  they  release  such  attachments  or  account  for  the 
property  in  their  possession.1 

A  voluntary  association  of  individuals  who  have  contributed 
funds  for  a  public  purpose  will  be  regarded  as  a  charity,  and 
a  court  of  equity  has  jurisdiction  over  the  parties.  Funds 
supplied  from  private  gifts  for  legal,  general  or  public  pur- 
poses are  charitable  funds  to  be  administered  by  a  court  of 
equitv.  Where  the  association  is  for  private  and  individual 
profit  or  pleasure,  with  no  public  object,  it  is  treated  as  a  co- 
partnership.    So,  where  the  association  is  for  private  emolu- 

though  his  debt  be  not  due.  as  in  a  Acts  1888,  c.  429,  of  Massachusetts, 
creditor  of  such  corporation.  In  a  authorizing  the  incorporation  of  "fra- 
proceeding  by  policy  holders  to  have  ternal  beneficiary  organizations," 
a  receiver  appointed  for  a  mutual  provides  (section  8)  that  "  any  cor- 
benefit  association,  a  complaint  poration  duly  organized  as  aforesaid, 
alleging  that  it  is  insolvent;  that  its  which  does  not  employ  paid  ageuts" 
assets  amount  to  $1,000,000;  that  its  in  soliciting  business,  "  and  which 
officers  have  converted  $750,000  to  conducts  its  business  as  a  fraternal 
their  own  use,  placing  them  in  a  society  on  the  lodge  system,"  may 
bank  under  their  control,  without  pay  a  benefit  to  the  member  or  his 
security,  save  the  money  so  deposited;  family.  It  was  held  that  where  a 
that  the  money  due  the  corporation  corporation,  organized  under  such 
from  branches  in  the  various  states  act,  provided  for  the  payment  of  a 
is  only  secured  by  the  indemnity  of  benefit  to  members  at  the  end  of  a 
such  irresponsible  bank;  that  the  year  out  of  a  fund  created  by  assess- 
chief  officer,  who  has  misappropri-  ments  levied  for  that  purpose,  but 
ated  the  funds,  and  whose  duty  it  is  employed  paid  agents  to  solicit  busi- 
to  call  meetings  of  the  board  of  man-  ness,  members  to  whom  such  benefit 
agers,  fails  to  do  so,  and  refuses  to  certificates  had  been  issued  might 
allow  the  proceedings  to  be  published  refuse  to  pay  further  assessments 
as  required:  and  that  a  large  sum  will  without  forfeiting  payments  already 
fall  due  on  certificates  within  about  made,  and  were  entitled  to  have  the 
six  months  from  the  filing  of  the  fund  so  accumulated  distributed 
complaint — states  ample  cause  for  among  the  certificate  holders.  Fogg 
the  appointment  of  a  receiver.  Su-  v.  Supreme  Lodge,  156  Mass.  431;  31 
preme  Sitting  v.  Baker,  134  Ind.  293;  N.  East.  Rep.  289;  see  In  re  Order  of 
33  N.  East.  Rep.  1128.  Fraternal  Guardians,  159  Pa.  St.  594; 

1  Garham  v.  Society  (Mass.),  37  N.   28  Atl.  Rep.  482. 
East.  Rep.  447. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  245 

ment,  or  for  benevolence,  confined  exclusively  to  the  members, 
and  in  which  none  others  participate,  as  between  themselves 
they  are  partners.  But  a  private  unincorporated  association 
for  general  purposes  of  public  utility,  a  court  of  equity  will 
not  treat  as  a  partnership,  nor  declare  its  dissolution  and  diyide 
its  assets  among  the  members  composing  it.  Property  given 
to  such  an  association  is  pledged  to  the  objects  for  which  it 
was  intended  to  be  applied  by  the  successive  contributors,  and 
can  not  be  diverted  from  them,  while  those  remain  who  are 
ready  and  willing  to  execute  the  public  trust  with  which  it 
has  been  clothed.  A  court  of  equity  will  not  suffer  its  funds 
to  be  diverted  to  other  uses  than  the  donors  intended.1  In 
private  unincorporated  associations  of  individuals  for  public 
purposes,  the  majority  can  not  bind  the  minority  in  the  dispo- 
sition and  management  of  its  funds,  except  by  special  agree- 
ment, and  in  the  manner  and  to  the  extent  stipulated  in  the 
agreement.2 

§  125.  A  decree  had  been  entered  dissolving  an  incorpo- 
rated mutual  fire  insurance  company,  and  the  court  was  called 
upon  to  decide  what  should  be  done  with  its  assets.  The  con- 
clusion reached  by  the  court  was  not  in  accord  with  the  decis- 
ions which  have  just  been  cited,  and  the  decision  may  well  be 
stated  at  length.  The  court  said  :  "  Our  statutes  contain  ample 
provisions  for  the  disposition  of  the  assets  of  stock  companies, 
but  this  is  a  mutual  company  and  has  no  stockholders,  and  the 
provisions  cited  do  not  apply.  According  to  the  old  settled 
Law  of  the  land,  says  Chancellor  Kent,  upon  the  civil  death  of 
a  corporation,  when  there  is  no  special  statute  to  the  contrary, 
all  its  real  estate  reverts  to  the  grantors  and  their  heirs,  and 
all  its  persona]  estate  vests  in  the  people.1  But  it  is  said  that 
in  this  class  of  cases  the  corporators  named  in  the  act  of  in- 
corporation should  be  regarded  as  stockholders.  They  are  not 
stockholders;  and  to  hold  that  they  are  would  bea  fiction,  and 
fictions  are  not  favored,  and  are  never  resorted  to  except  to 
work  out  some  strong  and  inherent  equity;  and  there  is  no 
such  equity  in  favor  of  the  corporators  of  a  mutual  insurance 

1  Thomas  v.  Ellmaker,  1  Par.  Sel.  573:  Kulil  v.  Meyer,  12  M<>.  Aj.p.  IT!. 

Cases  (Pa.)  98.  32  Kent  Comm.  i  LOth  ed.)  885  386; 

'  Thomas  v.  Ellmaker,  s>i)>ra;  Liv-  Aug.  &  A.  Corp.  (2ded.)c  22,  £6. 
ingston  v.  Lynch,  -1  John.  Ch.  (N.Y.) 


21G  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

company.  They  contribute  nothing  toward  its  assets,  and  we 
think  it  would  be  against  public  policy  to  allow  them  to  have 
a  pecuniary  interest  in  them.  Such  an  interest  would  inevita- 
bly tend  to  create  a  temptation  to  fix  the  rates  of  insurance 
higher  than  would  be  necessary  to  meet  losses;  and  then,  when 
a  surplus  had  been  thus  obtained,  to  divide  it  among  them- 
selves, and  thus  reap  a  profit  from  a  business  in  which  they 
had  invested  no  capital  and  had  taken  no  risks;  and  this,  at 
the  expense  of  the  policy-holders.  We  think  there  is  a  much 
stronger  equity  in  favor  of  the  former  policy-holders,  whose 
money  has  contributed  to  produce  the  assets.  But  we  do  not 
think  they  can  be  regarded  as  stockholders  after  their  policies 
have  expired,  and  their  premium  notes  have  been  canceled,  or 
given  up  to  them.  They  have  received  in  full  the  benefits  for 
which  they  contracted,  and  are  no  longer  members  of  the  com- 
pany; and  to  distribute  among  them  a  small  amount  of  assets, 
and  to  determine  what  each  former  policy-holder's  share  ought 
in  equity  to  be,  would  be  attended  with  difficulties,  and  an 
amount  of  labor  which  the  end  would  not  justify.  When  a 
man  dies  leaving  no  wife  or  kindred,  his  property  descends  to 
the  state;  and  when  a  corporation  which,  like  a  mutual  in- 
surance company,  has  no  stockholders,  ceases  to  exist,  we  are 
not  prepared  to  say  that  the  rule  of  the  common  law,  which 
gives  its  surplus  assets  to  the  state,  is  not  a  wise  one."  ' 

§  126.  Trust  funds  of  a  society.— It  has  been  held  that 
money  contributed  by  the  members  of  a  society  to  a  common 
fund,  to  be  applied  to  the  relief  and  assistance  of-  its  members 
when  in  sickness,  want  of  employment,  or  other  disability,  is 
not  a  charitable  fund  to  be  controlled  by  a  court  of  equity.2 
There  is,  however,  a  distinction  between  a  fund  contributed 
by  the  members  of  a  society,  to  be  employed  and  disposed  of 
among  themselves  as  they  may  agree,  and  a  gift  conferred  as 
a  matter  of  bounty  upon  such  society,  in  trust  to  be  distributed 
in  charity.  Where  the  fund  belongs  to  the  first  class,  courts 
of  equity  will  not,  as  a  general  rule,  interfere  with  the  mere 
administration  of  the  fund,  for  this  would  be  a  virtual  admin- 
istration of  the  internal  affairs  of  the  society.3  In  such  a 
case,  to  authorize  the  court  to  interfere,  it  must  be  shown  that 

1  Titcomb  v.  Ins.  Co. ,  79  Me.  315;  9       2  Rabb  v.  Reed,  5  Rawle,  151. 
Atl.  Rep.  732;  4  N.  E:ig.  Rep.  411.  3 See §114. 


JURISDICTION    OF    COURTS    OYER    SOCIETIES.  247 

the  fund  is  distinctly  impressed  with  the  qualities  of  a  trust, 
and  that  the  trust  has  been,  or  is  about  to  be,  violated  by  a 
misapplication  of  the  fund.  Whether  a  fund  formed  by  the 
contributions  of  the  members  of  a  society  has  been  impressed 
with  a  trust  and  so  accepted,  is  a  question  of  fact  always  open 
to  judicial  inquiry,  and  whether  the  alleged  trustee  be  an 
individual,  or  a  collective  body  of  individuals,  incorporated  or 
otherwise,  no  act,  declaration,  or  decision  of  such  trustee  will 
prevent  such  inquiry.  If  the  terms  of  the  alleged  trust  are 
contained  in  an  instrument  of  gift,  that  instrument  will  be 
examined  and  the  intentions  of  the  donor  carried  into  execu- 
tion. If  expressed  in  the  articles  of  association  of  a  voluntary 
society,  these  articles  will  be  carried  into  specific  execution 
for  the  purpose  of  enforcing  the  trust,  and  if  in  the  funda- 
mental law,  or  in  the  ordinances  and  by-laws  of  a  society,  on 
the  faith  of  which  contributions  have  been  made,  the  court 
will  adopt  the  construction  of  the  members,  and  apply  relief 
according  to  their  own  views  of  the  law. 

An  ordinance  of  a  society,  which  provides  for  the  creation 
of  a  fund  for  the  benefit  of  the  widows,  orphans,  heirs,  or 
designated  beneficiaries  of  the  members,  and  commits  the  ad- 
ministration of  such  fund  to  the  officers  of  the  society,  im- 
presses any  money  paid  into  such  fund  with  the  qualities  of  a 
trust  for  the  special  purposes  expressed  therein;  and  the  fund 
thus  formed  can  properly  be  applied  only  in  that  particular 
manner  pointed  out  in  such  ordinance,  which,  in  this  regard, 
is  to  be  treated  as  an  express  declaration  of  trust.  Where 
funds  have  been  contributed  by  members  of  a  society,  under 
its  by-laws,  for  the  exclusive  benefit  of  its  own  members  when 
in  sickness  and  distress,  and  have  accumulated  in  the  treasurv. 
Slich  by-laws  will  be  treated  as  declarations  of  trust,  and  a 
court  of  equity  will  not  permit  such  accumulations  to  be 
diverted  from  the  specified  objects.  And  funds  collected  by 
the  separate  lodges  of  a  mutual  benefit  society  from  theirown 
members,  for  the  exclusive  benefit  of  the  members  of  each 
Lodge,  are  held  in  trust  for  the  special  purposes  expressed  in 
their  by-laws  and  ordinances,  which  are  to  be  treated  as  ex- 
press declarations  of  trust,  and  the  appropriation  of  anypart 
of  such  funds  to  a  new  purpose,  by  order  «>:'  a  representative 
body,  governing    the  subordinate  lodges,  is  a  misappropria- 


248  JURISDICTION  OF  COURTS   over  societies. 

tion  which  a  court  of  equity  will  restrain,  on  application  of 
members  of  such  lodges.1 

Where  a  number  of  persons  belonging  to  a  society  were 
killed  and  injured  by  a  cyclone,  and  a  call  is  made  on  the  differ- 
ent branches  of  the  society  for  financial  aid  for  the  sufferers, 
the  money  sent  to  it  in  response  to  the  call  is  given  to  it  in 
trust,  to  be  distributed  among  the  sufferers  in  proportion  to 
their  necessities,  and  the  society  has  no  discretion  as  to  how 
much  shall  be  distributed,  but  is  bound  to  distribute  the  whole 
sum.2  In  such  a  case,  the  contributions  are  made  to  relieve 
the  necessities  of  sufferers,  and  the  sum  necessary  for  that  pur- 
pose is  to  be  estimated  by  the  contributors;  and,  as  the  sum 
necessary  for  that  purpose  depends  upon  the  opinion  of  each 
contributor,  there  can  be  no  surplus,  and  the  contributors  can 
not  recover  back  any  part  of  their  contributions,  unless  on 
the  ground  of  mistake  or  fraud.  The  power  of  the  trustee 
does  not  extend  so  far  as  to  withhold  any  part  of- the  fund, 
where  there  is  no  complaint  on  the  part  of  the  contributors. 

§  127.  Rights  of  contributors  to  funds  in  the  custody  of 
the  society. — The  contributors  to  a  fund  placed  in  the  cus- 
tody of  a  society  for  a  specific  purpose  have  a  right  to  have 
repaid  to  them,  in  proportion  to  their  contributions,  any  sur- 
plus not  needed  for  the  object.  The  claim  is  founded  in 
equity,  and  will  be  enforced  in  the  courts.  This  fund  is  in  the 
control  of  the  society  only  for  the  purpose  for  which  it  was 
raised.  It  may  be  disposed  of  for  any  purpose  within  the  ob- 
ject for  which  it  was  contributed,  at  any  regular  meeting  of 
the  society,  by  the  voice  of  the  majority  of  the  members  pres- 
ent, even  if  a  minority  of  the  whole  number.3  But  the  vote 
must  be  for  some  purpose  for  which  the  money  was  contrib- 
uted. A  majority  can  not  devote  the  money  of  the  minority, 
or  even  of  a  single  member,  to  any  other  purpose  without  his 
consent.     All  persons  present  at  the  meeting  at  which  the  vote 

1  See  §115;  Stadler  v.  District  Grand  25  N.  East.  Rep.  92:  Peter  v.  Carter, 

Lodge,  3  Am.  Law  Record,  589;  In  re  70  Md.  189;  16  Atl.  Rep.  450;  Trustees 

Equitable  Reserve,   16  N.  Y.  Supp.  v.  Adams,  65  N.  H.  225;  18  Atl.  Rep. 

80;     Goodman   v.    Jedidjah    Lodge,  777;  Penfield  v.  Skinner,  11  Vt.   296; 

67  Md.  117;  9  Atl.  Rep.  13;  Thomas  Bailey  v.  Lewis,   3  Day  (Conn.)  450. 

v.  Ellmaker,  1   Par.  Sel.  Cases  (Pa.)  '2  Supreme  Lodge  v.  Owens  (Ky.), 

98;  Kuhl  v.  Meyer,  42  Mo.  App.  474;  22  S.  W.  Rep.  326. 

Cary  Library  v.  Bliss,  151  Mass.  364;  3See  §  108. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  249 

is  taken,  disposing  of  the  fund,  if  no  one  dissents,  are  consid- 
ered as  voting  with  the  majority  for  the  motion,  and  assenting 
thereto.  Their  right  to  the  fund  is  concluded;  but  it  is  other- 
wise as  to  those  not  present.1  If  it  is  so  provided,  the  ma- 
jority may  control  the  minority  by  a  vote,  if  such  vote  is  for 
the  purposes  of  the  association,  and  within  its  provisions. 
Courts  of  chancer}7  have  power  to  see  that  societies  are  faith- 
ful trustees  in  the  disposition  of  the  fund,  and  will  see  that  it 
is  appropriated  to  the  object  designed,  and  will  not  suffer  it  to 
be  diverted  to  another,  unless  with  the  consent  of  the  con- 
tributors. 

Where,  under  a  resolution  of  the  majority,  the  surplus  fund 
has  passed  into  the  hands  of  new  trustees,  between  whom  and 
the  original  contributors  there  is  no  privity,  such  trustees  are 
not  accountable  to  them  for  the  fund.  Their  remedy  is  against 
the  original  trustees  only.2  The  supreme  court  of  Kentucky 
interfered  to  require  the  funds  raised  by  a  fair,  to  be  applied 
to  the  objects  for  which  the  fair  was  held,  and  to  prevent  self- 
constituted  trustees  from  diverting  such  funds  from  those  ob- 
jects.3 Contributors  to  a  fund  creating  a  trust  for  religious  or 
charitable  purposes,  can  not,  as  such,  call  the  trustees  to  an 
account  for  their  disposition  of  the  fund.  They  have  no  stand- 
ing in  court  for  such  a  purpose,  unless  they  are  trustees,  or 
cestuis  que  irmtent,  or  have  some  reversionary  interest  in  the 
trust  fund.4  An  action  for  money  had  and  received  may  be  main- 
tained by  a  member  of  an  unincorporated  voluntary  society 
against  the  treasurer,  to  recover  the  amount  of  his  contribu- 
tion, where  it  appears  that  the  latter  has  possession  of  the 
funds,  and  the  purposes  and  objects  for  which  the  contribu- 
tions were  made  can  not  be  accomplished.8  Upon  a  bill  in 
equity  for  the  distribution  of  the  funds  of  a  mutual  benefit' 
society  among  the  members,  a  decree  of  distribution  will  not 
be  granted  unless  it  is  made  clearly  to  appear  that  the  opera- 
tions of  the  society  have  entirely  ceased,  that  there  are  no 
beneficiaries  entitled  to  the  funds,  and  that  its  objects  have 
been  abandoned,"  or  that  the  by-law  is  so  unreasonable  as  to 

1  ■;..,.  §  106.  6  Koehler  v.  Brown,  2  Daly  78. 

•Abels  v.   McKeen,   18  N.  J.  Eq.       'Roper  v.  Burke,  88  Ala,  198;  8  So. 
462.  Rep.  139;  Kuhl  v.Meyer,  42  Mo.  App. 

3  Morton  v.    Smith,  5  Bush  (Ky.)    474. 
467. 

'Ludlam    v.  Higbee,   11   N.  J.  Eq. 
312. 


250  JURISDICTION   OF   COURTS    OVER    SOCIETIES. 

be  void.  A  society  may  not,  by  a  change  in  its  by-laws,  arbi- 
trarily repudiate  an  obligation  created  under  them,  but  where 
a  change  is  regularly  made  in  its  by-laws,  and  the  motive 
which  influences  the  change  is  an  honest  one  to  promote  the 
welfare  of  the  society,  a  court  will  not  inquire  into  the  wis- 
dom of  the  change  so  made.1  A  court  of  equity  is  slow  to 
interfere  with  the  internal  regulations  and. mere  police  courts 
of  a  society  incorporated  for  benevolent  and  charitable  ob- 
jects, and  will  not  apply  the  harsh  remedy  of  injunction,  ex- 
cept in  cases  clearly  made  out  by  proof,  and  where  all  other 
remedies  are  exhausted.  It  will  not  restrain  the  officers  of 
such  a  society  from  enforcing  its  by-laws,  unless  they  are 
clearly  so  unreasonable  as  to  be  null  and  void.2 

§  12S.  Rights  of  members  in  the  property  and  funds  of 
a  society. — Where  the  society  is  organized  for  purposes  other 
than  profit,  there  may  be  property  belonging  to  it,  derived 
from  the  payment  of  dues  or  fines,  or  consisting  of  the  fur- 
niture of  its  rooms,  but  the  possession  of  such  property  is  a 
mere  incident,  and  not  the  main  purpose  or  object  of  the 
society.  A  member  has  no  severable  proprietary  interest  in 
it,  and  no  right  to  any  proportionable  part  of  it,  either  during 
the  continuance  of  his  membership,  or  upon  his  withdrawal. 
He  has  merely  the  enjoyment  and  use  of  it  while  he  is  a  mem- 
ber, but  the  property  remains  with  and  belongs  to  the  society, 
while  it  continues  to  exist,  like  a  pew,  the  ultimate  and  domi- 
nant property  in  which  is  in  the  corporation  or  congregation, 
and  not  in  the  pew-holder;  and  when  the  body  ceases  to  exist, 
those  who  may  then  be  members  become  entitled  to  their  pro- 
portionate share  of  its  assets.3  The  legal  title  to  all  of  the  per- 
sonal property  of  an  unincorporated  society  is  vested  in  all  of 
its  members,  just  as  the  title  to  partnership  property  is  vested 
in  all  the  partners;  but  there  is  this  difference,  that  a  member 
of  such  a  society,  or  his  legal  representative,  has  no  right  to 
call  for  an  accounting  and  a  division  of  the  property.  Upon 
the  sale  of  land   belonging  to  a  voluntary  society   which   is 

Supreme  Lodge  v.  Knight,  117  3  Whits  v.  Brownell,  3  Daly  (N.  Y.) 
Ind.  489;  20  N.  East.  Rep.  479;  see  329;  In  re  St.  James  Club,  13  Eng. 
§  25  et  seq. ;  §  126.  L.  &  Eq.  529. 

'  2  Hussey  v.  Gallaher,  61  Ga.  86; 
Kerr  on  Injunctions,  Chap.  23,  24, 
28;  see  §  126. 


JURISDICTION    OF   COURTS    OVER    SOCIETIES.  251 

unincorporated,  with  no  rules  or  provisions  as  to  the  dis- 
position of  its  property,  the  members  at  the  time  of  the  sale 
are  entitled  to  divide  the  proceeds  in  equal  shares.1  It  is  well 
settled  that  where  members  have,  contrary  to  the  constitution 
and  government  of  a  voluntary  society  to  which  they  belonged, 
severed  their  connection  therewith,  they  can  not  invoke  the  aid 
of  a  court  of  equity  to  take  the  property  of  the  society  from 
those  who  adhere  to  its  organization,  objects  and  government. 
A  court  of  equity  will  not,  at  the  instance  of  the  minority, 
compel  the  majority  of  the  owners  of  the  furniture  of  an  Odd 
Fellows'  hall  to  purchase  the  interests  of  the  minority  therein, 
nor  to  remove  and  sell  the  same,  and  divide  the  proceeds 
among  all  the  owners,  where  it  appears  that  the  furniture  is 
being  used  for  the  xery  purposes  for  which  it  was  originally 
purchased.2  A  court  of  equity  has  power  to  place  the  property 
of  an  unincorporated  society  in  the  hands  of  a  receiver,  order 
the  same  to  be  sold,  and  the  proceeds  divided  among  its  mem- 
bers; but  it  will  not  exercise  this  power  unless  equity  clearly 
requires  it.  A  bill  in  equity  praying  for  such  relief,  brought 
by  a  minority  of  the  members  against  a  majority,  will  be  dis- 
missed where  the  evidence  fails  to  show  that  the  property  is 
being  mismanaged  or  wasted.3  AVhere  it  is  shown  that  the 
payment  of  salaries  to  the  officers  of  a  society  seems  to  have 
lii-eii  regulated  rather  by  the  condition  of  the  expense  fund  in 
the  treasury  than  by  the  compensation  actually  earned;  where 
the  system  of  paying  so-called  compensation  is  but  a  disguised 
scheme  for  a  division  of  profits  among  its  officers;  where  it 
appears  that  the  affairs  of  the  society  have  been  operated  for 
the  profit  of  its  officers,  the  courts  will,  upon  application,  in- 
terfere to  protect  the  interests  of  the  members.4  A  society 
may  expend  money  belonging  to  it  in  any  measures  calculated 
to  promote  the  object  of  its  organization,  and  a  member  has 
no  right  to  interfere  with  such  an  expenditure.' 

Where  tWO  benevolent     SOCietieS,  one    of    men  and  the  other 

of  women,  having  separate  organizations  but  the  same  objects. 

'Brown  v.    Dale,    25    Eng.    Rep.  *  State  v.  Association,  42  Oh.  St  579; 

(Moak)776.  Mc<  arthy's  Appeal,  IT  W.N.C.(Pa.) 

*  Robbing  v.  Waldo  Lodge,  7s  Me.  182. 

565]  T  At  1.  Rep.  540.  'Ingham  v.  Reform  Club,  12  Phila. 

'Hinkley  v.Blethen,  78  Me.  221;   3  264;  34Leg.Int.132. 
Atl.  Rep.  655. 


252  JURISDICTION    OF   COURTS   OVER    SOCIETIES. 

united  in  purchasing  a  cemetery,  each  society  contributing  a 
moiety  of  the  purchase  money,  and  for  a  time  mutually  par- 
ticipating in  the  use  and  profit  of  the  property,  although  the 
title  was  taken  to  the  officers  of  one  of  them,  a  subsequent  go- 
ing over  of  a  majority  of  the  members  of  the  other  society  to 
that  one  will  not  deprive  such  other  society  of  its  rights 
of  property  resulting  from  the  payment  of  half  the  price,  and  the 
same  will  be  declared  and  enforced  by  decree  of  court.1  "Where 
certain  members  of  Teutonia  Lodge  withdrew  from  the  juris- 
diction of  the  grand  lodge  of  the  state,  surrendered  their  fra- 
ternal charter  and  formed  a  new  lodge,  adopting  the  same 
name,  and  other  members  continued  steadfast  in  their  alle- 
giance, and  the  charter  was  duly  delivered  to  them  as  the  lodge, 
that  body  which  continued  true  to  its  allegiance  and  held  the 
charter,  was,  as  to  certain  property  of  the  original  lodge  taken 
by  the  members  who  withdrew,  adjudged  to  be  Teutonia  Lodge 
and,  as  such,  to  be  entitled  to  the  property  of  the  society.2 
The  seceding  members  of  an  incorporated  society,  forming  a 
new  society,  can  not  maintain  a  suit  for  the  recovery  of  debts 
due  to  the  society  from  which  they  seceded.3  In  cases  of  per- 
sonal chattels,  in  which  the  remedy  at  law  by  damages  would 
be  utterly  inadequate,  and  leave  the  injured  party  in  a  state  of 
irremediable  loss,  equity  will  interfere  and  grant  full  relief,  by 
requiring  a  specific  delivery  of  the  thing  which  is  wrong- 
fully withheld.  This  may  occur  where  the  thing  is  of  pe- 
culiar value,  as  being  ancient,  or  the  production  of  some  dis- 
tino-uished  artist,  or  a  family  relic  or  ornament.  This  rule  has 
been  held  applicable  to  the  personal  property  of  societies;  and 
where  a  highly  ornamented  silver  tobacco  box  had  been  for 
many  years  handed  down  from  a  certain  officer  of  the  society  to 
his  successor,  and  a  person  retained  possession  of  it  after  his 
term  of  office  expired,  and  refused  to  deliver  it  to  his  successor 
in  office,  unless  the  society  would  pass  his  accounts,  the  court 
without  measuring  the  value  of  the  box,  decreed  that  it  be 
delivered  up  to  the  proper  officer.4 

'Ladies  Benevolent  Society  v.  So-       3 Smith  v.  Smith,  3  Desau.  (S.  C.) 
ciety,  3Tenn.  Ch.  100.  557. 

-  Altaian  v.  Benz,  27  N.  J.  Eq.  331;       4  Fells  v.  Read,  3  Ves.  Jr.  70;  Beas- 
see  also  McFadden  v.  Murphy,  149   ley  v.  Allyn,  12  W.  N.  C.  90. 
Mass.  341;  21  N.  East.  Rep.  868;  Gor- 
man v.  O'Connor,  155  Pa.  St.  239;  26 
Atl.  379;  see  §  129. 


JURISDICTION   OF   COURTS    OVER    SOCIETIES.  253 

A  person  who  has  been  expelled  from  the  "  Society  of 
Believers,"  commonly  called  Shakers,  can  not  maintain  an 
action  for  services  rendered  the  society  prior  to  such  expul- 
sion, or  for  his  expenses  of  support  since  separation.'  In  a 
social  partnership,  where  an  absolute  community  of  property 
with  right  of  survivorship,  on  the  one  hand,  and  care  by  the 
community  of  every  member  through  life,  on  the  other,  is  the 
fundamental  and  pervading  principle,  if  one  member  be  un- 
justly expelled  by  an  usurped,  though  unquestioned,  authority, 
not  having  under  the  clear  terms  of  the  association  any  right 
to  expel  him,  the  court  will  not  oblige  him  to  return  to  the 
association,  there  not  being  on  its  part  an  offer  of  full  and  sat- 
isfactory reconciliation  and  reception,  but  will  interfere  with 
the  fundamental  and  pervading  principle;  and  though  the  ex- 
pelled member  brought  nothing  into  the  community,  will 
give  to  him  a  separate  and  individual  part  of  the  property. 
And  where  payment  for  the  party's  services  at  the  ordinary 
rate  of  services  like  his,  during  many  years  that  he  was  a  mem- 
ber, would  give  to  him  more  than  his  numerical  proportion  or 
share  of  the  whole  capital-  stock,  and  where  the  question  of 
profits  was  a  little  obscure,  the  court,  regarding  this  as  the 
simplest  and  most  natural  justice,  gave  to  him  his  numerical 
share  or  proportion  of  the  whole  capital  stock,  from  whatever 
source  arising,  as  the  same  existed  at  the  time  he  was  expelled, 
irrespective  of  the  amount  which  he  found  in  the  association 
when  he  became  a  member.2 

§  12l».  Revocation  of  the  social  and  fraternal  charter  of 
a  subordinate  by  the  supremo  body. — Where  a  subordinate 
lodge  is  incorporated  under  the  laws  of  the  state,  its  suspen- 
sion by  the  grand  kxlge  has  no  effect  on  its  legal  existence, 

1  Grosvenor  v.  United  Society,  118  ileges,  benefits  and  advantages  con- 
Mass.  78;  Waite  v.  Merrill,  4  Me  102.  templated  by  the  association,  be  dis- 

2Nachtrieb  v.  The  Harmony  Set-  charging  the  duties    incumbent    mi 

tlement,  3  Wall.  Jr.  66.    In  a  case  him  as  a  member  of  it,"  the  courl  re- 

broughl     by    another    complainant  fused  to  grant  the  complainant  any 

against  these  same  defendants,  there  relief,  but  dismissed    the  i>ill  with 

being  imperfect  evidenceof  any  ex-  costs.     Lemiz  v.  The  Harmony  So- 

pulsion,  and  the  defendants  by  their  ciety,  8  Wall.  Jr.  87;  Scriberv.  Rapp, 

answer,   "conceding  the  complain-  5  Watts  851  860;  Bee  Burt  v.' Oneida 

ant's  perfect  right  and  liberty  to  re-  Community,  16  N.  Y.  Supp.  2^'J;  13T 

turn  to  the  enjoyment  of  all  the  priv-  N.  Y.  346. 


251  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

and  gives  to  the  representatives  of  the  grand  lodge  no  right 
to  the  possession  of  the  property  of  which  it  is  the  owner,  and 
in  which  the  grand  lodge  has  no  right,  title  or  interest.  A  pro- 
vision of  the  constitution  of  the  grand  lodge,  that  in  case  of 
failure  by  a  subordinate  lodge  to  do  certain  things,  it  "  shall 
be  deemed  an  extinct  lodge,  and  its  charter  shall  be  forfeited," 
applies  only  to  the  fraternal  existence  and  social  charter  of  a 
subordinate  lodge.  If  it  be  incorporated,  its  corporate  exist- 
ence can  only  be  dissolved  in  the  manner  prescribed  by  the 
laws  of  the  state.1  The  Independent  Order  of  B'nai  B'rith, 
organized  for  benevolent  purposes,  has  numerous  lodges  in 
different  states.  The  primary  or  subordinate  lodges  are 
grouped  into  districts,  over  which  are  district  grand  lodges 
composed  of  delegates  elected  by  the  subordinate  lodges. 
Above  these  is  a  "  Constitution  Grand  Lodge."  There  is  also 
an  appellate  court  for  the  settlement  of  controversies  arising 
within  the  order.  Among  the  general  laws  is  one  which  re- 
quires each  subordinate  lodge  to  obey  the  ordinances,  laws  and 
resolutions  of  the  "  Constitution  Grand  Lodge,"  its  district 
grand  lodge,  and  the  final  decisions  of  the  appellate  court, 
under  penalty  of  suspension  and  forfeiture  of  its  charter. 
These  charters  are  paper  documents  emanating  from,  and 
issued  by  the  district  grand  lodges  to  the  subordinate  lodges 
within  their  respective  territorial  limits. 

Jedidjah  Lodge  of  Baltimore  was  within  the  limits  of  dis- 
trict ISTo.  5,  and  received  a  charter  from  the  grand  lodge  of 
that  district.  In  December,  1853,  Jedidjah  Lodge  was  incor- 
porated under  the  act  of  the  Maryland  legislature  of  1852, 
and  in  February,  1870,  District  Grand  Lodge  No.  5,  was  incor- 
porated under  the  general  corporation  law  of  Maryland  of  1868. 
A  bill  was  filed  in  July,  1884,  by  District  Grand  Lodge  No.  5 
against  Jedidjah  Lodge,  alleging  that  the  complainant  had 
forfeited  the  charter  of  said  Jedidjah  Lodge  under  the  laws 
and  constitution  of  the  order,  and  claiming  that  by  reason 
thereof  the  funds  of  said  Jedidjah  Lodge  belonged  to  the  com- 
plainant. The  supreme  court  of  Maryland  held  that  the 
charter  granted  by  the  state  to  the  Jedidjah  Lodge  could  not 
be  forfeited  by  the  grand  lodge,  whether  acting  in  its  con- 
ventional or  corporate   capacity,   that   the   charter  could  be 

1  Merrill  Lodge  v.  Ellsworth  et  al.,  78  Cal.  166;  20  Pac.  Eep.  390. 


JUKISDICTION    OF    COURTS    OVER    SOCIETIES.  '2o') 

annulled  by  the  legislature,  or  forfeited  under  such  proceed- 
ings for  that  purpose  as  are  authorized  by  statute  or  by  the 
common  law,  and  in  no  other  mode,  and  by  no  other  agency; 
that  the  Jedidjah  Lodge  held  the  funds  in  controversy,  and  had 
the  right  to  hold  them,  under  the  corporate  powers  conferred 
by  the  state  charter,  and  so  held  them  entirely  unaffected 
by  the  forfeiture  of  the  documentary  or  conventional  charter 
granted  to  it  by  the  district  grand  lodge,  by  virtue  of  which 
forfeiture  alone  the  complainants  claimed  such  funds.1 

The  terms  of  the  laws  of  the  supreme  lodge  or  council  of  a 
society,  providing  that  on  suspension  of  one  of  the  local  organ- 
izations its  property  shall  be  forfeited  and  vest  in  the  secretary 
of  the  supreme  body,  are  void,  in  that  they  seek  to  confiscate, 
without  judicial  process,  property  held  and  owned  absolutely 
by  the  local  organization.2 

§  130.  Mutual  benefit  societies  as  charitable  organiza- 
tions.— It  was  held  by  the  Supreme  Court  of  Ohio  that  a  ben- 
efit society  which  extends  relief  only  to  its  own  sick  and 
needy  members,  and  to  the  widows  and  orphans  of  its  deceased 
members,  is  not  "an  institution  of  purely  public  charity."  and 
that  its  moneys  held  and  invested  for  such  purposes  are  not 
exempt  from  taxation.3  And  in  Iowa  it  is  held  that  a  build- 
ing owned  by  a  benefit  society,  and  leased  for  pecuniary  profit, 
is  taxable,  although  built  with  a  fund  which  was  exempt,  and 
into  which  the  rents  are  paid.  Its  status  as  taxable  property 
became  fixed  when  it  was  used  for  business  purposes  and 
became  productive.4  A  mutual  benefit  society  is  a  private, 
not  a  public  charity.5    The  distinctive  characteristics  of  a pub- 

1  District  Grand  Lodge  v.  Jedidjah  '  Fort  Des  Moines  Lodge  I.  O.  O.  F. 

Lodge,  66  Md.  236;   3  Atl  Hep-  L04;  v.  The  County  of  Polk,  56  [owa  84; 

Goodman  v.  Jedidjah  Lodge,  C>7  Md.  City  of  Indianapolis  v.  The  Grand 

117;  !i  Atl.  Hep.  13.  Master,  etc.,  85   I n.l.  518;    Morris  v. 

'  Wicke  v.  Monihan,  180  N.  Y.  232;  Lone  Star  Chapter,  68  Texas  698. 
29  N.  East.  Rep.  139;  affirming  8  N.  sSaltonstaU  v.  Sanders,  n  Allen 
Y>  Supp.  121;  citing  Austin  v.  Sear-  456;  Delaware  Institute  v.  Delaware 
ing,  16  N.  V.  L12;  see  Wells  v.  Monir  Co..  '.)!  Pa.  St.  168;  see  Bauer  v.  Sam- 
ban,  139  N.  Y.  161;  29  N.  Bast.  Rep.  sou  Lodge,  102  End,  862;  Miner  v. 
232.  Lssociation,  68  Mich.  838;  39  X.  V.*. 

8  Morning  Star  Lodge,  I.  O.  O.  F.  Rep.    858;    6   West.    Rep.    117:    Burd 

v.  HaysUp,  Treasurer,  28  Oh.  St.  144;  Orphan  Asylum  v.   School   District, 

see  Saltonstall  v.  Saunders,  11  Allen  90  Pa.  St.  89. 
456;  Delaware  Institute  v.  Delaware 
Co.,  94  Pa.  St.  163. 


256  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

lie  charity  are  that  its  funds  are  derived  from  gifts  and  devises, 
and  not  from  fees,  dues  and  assessments,  and  that  it  is  not 
confined  to  privileged  individuals,  but  is  open  to  the  indefinite 
public.  A  masonic  lodge  is  not  a  charitable  or  benevolent 
institution  within  a  statute  providing  that  the  property  "of 
all  benevolent,  charitable  and  scientific  institutions  incorpo- 
rated in  this  state  "  shall  be  exempt  from  taxation.1 

A  masonic  lodge  is  a  charitable  institution,  and  its  property 
is  exempt  from  taxation,  under  a  section  of  the  statutes  pro- 
viding that  the  property  of  charitable  institutions,  used  for 
their  legitimate  purposes,  shall  be  exempt  from  taxation.2  In 
passing  upon  the  question  whether  a  masonic  hall  was  exempt 
from  taxation  under  a  statute  exempting  "every  building 
erected  for  the  use  of  any  benevolent  or  charitable  institu- 
tion," it  was  said  by  the  supreme  court  of  Indiana :  "  It  is  not 
essential  to  charity  that  it  shall  be  universal.  That  an  insti- 
tution limits  the  dispensation  of  its  blessings  to  one  sex,  or  to 
the  inhabitants  of  a  particular  city  or  district,  or  to  the  mem- 
bership of  a  particular  religious  or  secular  organization, 
does  not,  we  think,  deprive  it  either  in  legal  or  popular  appre- 
hension of  the  character  of  a  charitable  institution.  If  that 
only  be  charity  which  relieves  human  want,  without  discrimi- 
nating amongst  those  who  need  relief,  then  indeed  it  is  a  rarer 
virtue  than  has  been  supposed.  And  if  one  organization  may 
confine  itself  to  a  sex,  or  church,  or  city,  why  not  to  a  given 
confraternity  ?  So  narrow  a  definition  of  charity  *  *  is 
not,  that  we  are  aware  of,  ever  attached  to  it,  and  we  are  not 
at  liberty  to  circumscribe  the  effect  of  the  statute,  and  defeat 
its  intention,  by  affixing  to  its  terms  an  unusually  limited 
meaning."  3  The  reserve  fund  of  a  mutual  benefit  society  is 
subject  to  a  taxation,  and  its  contingent  liability  to  holders  of 
certificates  is  not  such  an  indebtedness  as  may  be  deducted 
from  the  credits  of  the  society  subject  to  taxation.4 

1  Bangor  v.  Masonic  Lodge,  73  Me.  to  unincorporated  associations,    see 

428.  authorities  in  Treasurer  v.  Atwater, 

8  Mayor  v.  Solomon's  Lodge,  53  Ga.  30   Oh.    St.    77;  Liggett  v.  Ladd,    17 

93.  Ore.  89;  21  Pac.  Rep.  133. 

3  City  of  Indianapolis  v.  The  Grand       4  Kansas  Mutual  v.  Hill,  50  Kans. 

Master,   etc.,  25  Ind.  518;  Burdine  v.  636. 
Grand   Lodge,  37  Ala.  478;  Bequests 


CHAPTER  IX. 

JURISDICTION  OF  COURTS  OVER  SOCIETIES-PART  III. 

§  131.  Religious  societies. 

132.  Ecclesiastical  jurisdiction — Civil  rights. 

133.  Secession  in  religious  society — Division  of  property. 

134.  Property  and  trusts  of  religious  societies. 

135.  Trustees  and  officers  of  religious  societies. 

§  131.  Religious  societies. — It  is  not  proposed  to  discuss 
at  length  in  this  work  the  subject  of  religious  societies,  but  so 
many  of  the  principles  which  govern  the  courts  in  their  treat- 
ment of  such  societies  are  applicable  to  societies  at  large,  that 
it  is  necessary  to  refer,  at  least,  to  the  jurisdiction  of  courts  i  >vef 
them.  Churches  in  this  country  are,  in  a  legal  point  of  view, 
no  more  than  other  societies  voluntarily  organized  by  its  citi- 
zens. 

§  132.  Ecclesiastical  jurisdiction — Civil  rights. — Civil 
courts  in  this  country  have  no  ecclesiastical  jurisdiction.  They 
can  not  reverse  or  question  ordinary  acts  of  church  discipline, 
and  can  only  interfere  in  church  controversies  when  civil 
rights,  or  rights  of  property  are  involved.  When  a  civil  right 
depends  upon  some  matter  pertaining  to  ecclesiastical  affairs, 
the  civil  tribunal  tries  the  civil  right,  and  nothing  more,  taking 
the  ecclesiastical  decisions  out  of  which  the  civil  right  has  a  risen 
as  it  finds  them,  and  accepting  those  decisions  as  matters  adjudi- 
cated by  another  jurisdiction.  The  civil  courts  act  upon  the 
the<  >ry  that  the  ecclesiastical  courts  are  the  best  judges  of  morel  y 
ecclesiastical  questions,  and  of  all  matters  which  concern  the 
doctrines  and  discipline  of  the  respective  denominations  to 
w  Id  eh  they  belong.  When  a  person  becomes  a  member  of  a 
church  he  becomes  such  upon  the  condition  of  submission  to  its 
ecclesiastical  jurisdiction,  and  however  much  he  may  be  dis- 
satisfied with  the  exercise  of  that  jurisdiction,  he  has  no  ri<dit  ' 
to  invoke  the  supervisory  power  of  a  civil  court,  so  long  as 

17  (2.37) 


258  JURISDICTION   OF   COURTS    OVER    SOCIETIES. 

none  of  his  civil  rights  are  invaded.1  While  the  courts  will 
decide  nothing  affecting  the  ecclesiastical  rights  of  a  church, 
yet  its  civil  rights  to  property  are  subjects  for  their  examina- 
tion, to  be  determined  in  conformity  to  the  laws  of  the  land, 
and  the  principles  of  equity.2  The  usage  of  a  church,  or  the 
law  of  its  organization  as  a  religious  society,  if  they  are  to  be 
considered  in  deciding  legal  controversies,  should  be  proved  as 
facts.3 

The  testimony  of  those  in  authority  in  the  church,  such  as  a 
bishop  of  a  diocese,  is  competent  to  define  the  meaning  of 
terms  and  words,  as  used  in  the  church,  and  to  show  the 
usages  and  customs  of  the  church.4 

Courts  are  frequently  required  to  ascertain  facts  from  his- 
tory, but  then  they  consult  its  authentic  sources,  and  ascertain 
such  facts  from  them,  and  not  from  the  opinions  of  witnesses. 
The  mere  opinions  of  witnesses  as  to  departures  from  the  faith 
of  a  religious  denomination,  are  not  admissible  as  evidence.5 

It  is  not  the  province  of  courts  of  justice  to  decide,  or  to 
inquire  what  system  of  religious  faith  is  most  consistent,  or 
what  religious  doctrines  are  true,  or  what  are  false,  in  any 
case;  and  it  seldom  becomes  necessary  for  courts  to  discuss,  or 
to  examine  the  creeds,  or  confessions  or  systems  of  faith  of 
the  different  religious  sects,  in  determining  questions  of  law, 
except  in  cases  where  they  are  called  upon  to  see  that  a  trust 
or  charity  is  administered  according  to  the  intention  of  the 
original  founders.6  Whether  a  person  died  in  the  faith  of  a 
church,  so  as  to  be  entitled  to  interment  in  its  cemetery,  is  not 
a  question  within  the  jurisdiction  of  the  civil  courts,  but  must 
be  decided  by  the  ecclesiastical  authorities.7  Whether  or  not 
devotional  singing,  forming  a  part  of  the  public  worship  of  a 
particular  religious  society,  should  be  accompanied  by  instru- 
mental music,  must  be  determined  by  those  who  administer 

'  Schweiker  v.  Husser,  146  111.  399;  4Bird   v.    St.    Mark's   Church,    62 

34  N.  East.  Rep.    1022;    44  111.  App.  Iowa  567;  Ferraria  v.   Vasconcellos, 

566;    White  Lick  v.  White  Lick,  89  supra. 

Ind.  136.  6  Happy  v.  Morton,  33  111.  398. 

2  Ferraria  v.  Vasconcellos,   31  111.  6  Hale  v.  Everett,  53  N.  H.  9. 

25;  Prickett  v.  Wells  (Mo.),  24  S.  W.  1  McGuire  v.    Trustees  of  St.  Pat- 
Rep.  52.  rick's  Cathedral,  3  N.  Y.  Supplement 

3  Vasconcellos  v.    Ferraria,   27  111.  781. 
237;  Hendrickson  v.   Decow,  1  N.  J. 

Eq.  577. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES. 


259 


the  discipline  of  the  church  to  which  they  belong.1  The 
decisions  of  ecclesiastical  courts  are  final  as  to  what  constitutes 
an  offense  against  the  discipline  of  the  church. 

The  civil  courts  will  interfere  with  churches  and  religious  as- 
sociations, when  rights  of  property  or  civil  rights  are  involved, 
but  they  will  not  revise  the  decisions  of  such  associations  upon 
ecclesiastical  matters,  merely  to  ascertain  their  jurisdiction.2 
Where  the  rector  of  a  parish  sued  it  for  a  balance  due  him  on 
his  salary  under  the  canons  of  the  diocese  and  his  contract  with 
the  vestry,  it  was  held  that,  by  failure  to  pay  him  his  full  sal- 
ary, a  clear  legal  right  had  been  invaded,  and  that  it  was  the 
duty  of  the  civil  court  to  protect  and  enforce  that  right.3 

A  purely  ecclesiastical  office,  such  as  that  of  a  deacon  in  a 
church,  an  office  not  created  or  expressly  authorized  by  state 
law,  but  created  by  an  unincorporated  ecclesiastical  body,  and 
filled  by  election  by  a  body  which  possesses  no  corporate  pow- 
ers or  functions,  is  not  under  the  jurisdiction  of  a  court  of  law, 
so  as  to  be  made  subject  to  a  quo  warranto  proceeding.4 


1  Tartar  v.  Gibbs.  24  Md.  323. 

"Watson  v.  Jones,  80  U.  S.  679; 
Connelly  v.  Association,  58  Conn.  552; 
20  Atl.  Rep.  671;  Chase  v.  Cheney,  58 
111.  509.  In  a  dissenting  opinion  in 
Chase  v.  Cheney,  it  was  said  :  "  We 
concede  that  when  a  spiritual  court 
has  once  been  organized  in  conform- 
ity  with  the  rules  of  the  denomina- 
tion of  which  it  forms  a  part,  and 
when  it  has  jurisdiction  of  the  parties 
and  the  subject-matter,  its  subse- 
quent  action  in  the  administration 
of  spiritual  discipline  will  not  be  re- 
vised by  the  secular  courts.  The 
simple  reason  is  that  the  association 
18 purely  voluntary,  and  when  a  per- 
son joins  it,  he  consents  that  for  all 
spiritual  offenses,  he  will  he  tried  by 
a  tribunal  organized  in  conformity 
with  the  laws  of  the  society.  But 
he  lias  not  consented  that  he  win  be 
tried  by  one  not  so  organized,  and 
when  a  clergyman  is  in  danger  of 
being  degraded  from  his  office,  and 
losing  his  salary  and  means  of  live- 
lihood by  the  action  of    a  spiritual 


court  unlawfully  constituted,  we  are 
very  clearly  of  opinion  he  may  come 
to  the  secular  courts  for  protection. 
It  would  be  the  duty  of  such  courts 
to  examine  the  question  of  jurisdic- 
tion, without  regard  to  the  decision 
of  the  spiritual  court  itself,  ami  if 
they  find  such  tribunal  has  been  or- 
ganized in  defiance  of  the  laws  of 
the  association,  and  it  is  exercis- 
ing a  merely  usurped  and  arbi- 
trary power,  they  should  furnish 
such  protection  as  the  laws  of  the 
land  will  give.  We  consider  this  po- 
sition clearly  Bustainable  upon  prin- 
ciple and  authority.'"  Watsou  v. 
Avery.  2  Bush(Ky.)882;  n,\,\  Fellows 
\ .  llook.iiicin.  Law  Bull.  891;  Nance 
v.  Busby,  91  Tenn.  808;  18  S.  W. 
Rep.  871:  Brundage  v.  Deardorf,  55 
Fed.  Rep.  839;  Bears  v.  Heasley 
(Mich.i.  :.7  N.  \V.  Rep.  270. 

3  Bird  v.  St.  Mark's  Church,  62 
Iowa  568. 

4 Ter  Vree  v.  Geerlinga,  55  Mich. 
562;  22  N.  \Y.  Rep.  89. 


260  JURISDICTION    OF   COURTS    OVER    SOCIETIES. 

Changes  in  matters  of  form  in  the  conduct  of  the  worship, 
or  in  the  administration  of  the  ordinances,  not  affecting  the 
substance  of  doctrine  or  discipline,  may  be  made  by  congre- 
gations, and  determined  by  a  majority  of  the  members  entitled 
to  vote,  in  the  absence  of  any  other  lawfully  established  rule.1 

§  133.  Secession  in  religious  society,  division  of  prop- 
erty, etc. — In  the  absence  of  proof  to  the  contrary,  it  will  be 
presumed  that  religious  societies  can  not  dissolve  their  connec- 
tion with  the  principal  organization  without  permission.2 
Where  the  usage  of  a  church,  or  the  law  of  its  organization, 
gives  the  majority  of  the  members  of  a  congregation  the  right 
to  withdraw  from  its  ecclesiastical  authority,  neither  the  act 
of  the  majority  in  withdrawing,  nor  the  act  of  the  minority  in 
adhering,  works  a  forfeiture  of  the  rights  of  either  to  the 
church  property,  because  in  neither  case  has  an  illegal  act  been 
done.  Where  such  separation  is  permissible,  all  the  members, 
those  adhering  to  the  former  churjh  connection  as  well 
as  those  seceding,  are  beneficiaries  of  the  common  property, 
and  in  case  of  a  separation,  the  property  should  be  divided 
between  the  two  parties  in  proportion  to  their  numbers  at  the 
time  of  the  separation.3  But  the  rule  is,  that  where  a  church 
is  erected  for  the  use  of  a  particular  denomination,  or  relig- 
ious persuasion,  a  majority  of  the  members  of  the  church  can 
not  abandon  the  tenets  and  doctrine  of  the  denomination  and 
retain  the  right  to  the  use  of  the  property;  but  such  secession- 
ists forfeit  all  right  to  the  property,  even  if  a  single  member 
adheres  to  the  original  faith  and  doctrine  of  the  church.  This 
rule  is  founded  in  reason  and  justice.  Church  property  is 
rarely  paid  for  by  those  alone  who  worship  there,  and  those 
who  contribute  to  its  purchase  or  erection  are  presumed  to  do 
so  with  reference  to  a  particular  form  of  worship,  or  to  pro- 
mote the  promulgation  or  teaching  of  particular  doctrines  or 
tenets  of  religion,  which,  in  their  estimation,  tend  most  to  the 
salvation  of  souls;  and  to  pervert  the  property  to  another 
purpose  is  an  injustice  of  the  same  character  as  the  application 
of  any  trust  property  to  purposes  other  than  those  designed 
by  the  donor.     Hence  it  is,  that  those  who  adhere  to  the  orig 

1  Schradi  v.  Dornfeld,  52  Minn.  3  Ferraria  v.  Vasconcellos,  31  111. 
465;  55  N.  W.  Eep.  49.  25;    Smith  v.  Swormstedt,  16  How. 

2  Vasconcellos  v.  Ferraria,  27  111.  288;  Brooke  v.  Shacklett,  13  Gratt. 
237.  (Va.)  301. 


JURISDICTION    OF   COURTS    OVER    SOCIETIES.  201 

inal  tenets  and  doctrines,  for  the  promulgation  of  which  a 
church  has  been  erected,  are  the  sole  beneficiaries  designed  by 
the  donors;  and  those  who  depart  from  and  abandon  these 
tenets  and  doctrines  cease  to  be  beneficiaries,  and  forfeit  all 
claim  to  the  title  and  use  of  such  property.  These  are  the 
principles  on  which  the  decisions  are  founded.1  Changes  in 
the  membership  of  religious  congregations  and  bodies  do  not 
effect  their  legal  identity;  and  for  the  purposes  of  continuing 
and  enjoying  the  uses  to  which  the  properties  respectively 
possessed  by  them  are  devoted,  they  respectively  remain  in 
legal  contemplation,  the  same  congregations  and  bodies.2  The 
title  to  the  church  property  of  a  divided  congregation  is  in 
that  part  of  it  which  is  acting  in  harmony  with  its  own  law; 
and  the  ecclesiastical  laws  and  principles  which  were  accepted 
among  them,  before  the  dispute  began,  are  the  standard  for 
determining  which  party  is  right.3 

In  1881,  testatrix  devised  property  to  the  "board  of  trustees 
for  the  Protestant  Episcopal  Church  in  the  diocese  of  North 
Carolina."  At  that  time  the  diocese  of  North  Carolina  em- 
braced the  whole  state.  In  1883,  it  was  divided  into  the  dio- 
cese of  North  Carolina  and  the  diocese  of  East  Carolina.  Tes- 
tatrix died  in  1885.  Code  N.  C.  §  3665,  provides  that  an 
organized  church  can  hold  property  by  gift  or  otherwise,  and 
that  the  estate  therein  shall  vest  absolutely  in  the  trustees 
of  said  church.  It  was  held  that  the  devise  bein"-  to  the 
trustees  for  "the  Church  in  the  diocese  of  North  Carolina." 
and  not  to  the  "diocese"  as  such,  on  the  subdivision  of  the 
diocese  in  conformity  to  the  usages  of  the  church,  without 
secession  or  schism,  the  property  devised  should  be  equally 
divided  among  the  trustees  of  each  diocese.4     Where  a  schism 

1  Schradi  v.  Dornfeld,  52  Minn.  465;  supra;  Den  v.  Bolton,  12  N.  J.  L.  206: 

55  N.  W.  Rep.  49;   Ferraria  v.  Vas-  Reform  Church  v.  Theological  Sem- 

concellos,   supra;    Winebrenner   v.  inary,  4  N.  J.  Eq.  77:   Methodist  Ch. 

Colder,  43  Pa.  St.  244:  Baker  et  al.  v.  v.    Wood,   5  Ohio,   288;    Sadden  v. 

Fales,  16  Muss.  488;  Btebbinfl  v.  Jen-  Chora,  8  B.  Mon.  (Ky.)70;  Deadexick 

nings,  10 Pick.  (Mass.)  172;  Sawyer  v.  v.  Lampson,  11  Heisk.  (Tenn.)  523. 
Baldwin,  11  Pick.  (Mass.)  495;  Skil-       '  Manni.x  v.  Purcell,  46  Oh.  St.  102; 

ton  v.  Webster,  Brightly's  Reps.  (Pa.)  19  N.  East.  Rep.  573. 
203;  Dublin  case,  38  N.  H.  459;  Lewis       "  McGinnia  v.  Watson,  41  Pa.  St.  9. 
v.  Watson,  4  Bush  (Ky.)  228;  Gibson       *  Diocese  of  East  Carolina  v.  Dio- 

v.  Armstrong,  7  B.  Monroe  (Ky.)  481,  cese  of    North  Carolina,   102  N.  C. 

criticised  in  Ferraria  v.  Vastoncellos,  442;  9  S.  E.  Rep.  310. 


262  JURISDICTION    OF    COURTS    OVER    SOCIETIES. 

occurs  in  an  ecclesiastical  organization,  which  leads  to  a  separa- 
tion into  distinct  and  conflicting  bodies,  the  respective  claims 
of  such  bodies  to  the  control  of  the  property  belonging  to  the 
organization  must  be  determined  by  the  ecclesiastical  laws, 
usages,  customs,  principles  and  practices  which  were  accepted 
and  adopted  by  the  organization  before  the  division  took  place. 
Where  the  local  congregation,  which  is  itself  a  member  of  a 
much  larger  and  more  important  religious  organization,  and  is 
under  its  government  and  control,  divides  into  two  separate 
and  conflicting  bodies,  and  one  of  these  bodies,  to  the  exclusion 
of  the  other,  is  recognized  by  the  proper  superior  body  as  con- 
stituting the  true  congregation,  the  decision  of  the  proper 
superior  body  in  that  respect,  when  established  as  a  fact,  is  bind- 
ing upon  the  civil  courts  as  regards  questions  of  property 
arising  out  of  the  division  between  such  separate  and  conflict- 
ing bodies.  In  case  of  a  division  of  a  religious  corporation, 
both  parties  still  adhering  to  the  tenets  and  discipline  of  the 
organization,  their  property  should  be  divided  between  them, 
n  proportion  to  their  numbers  at  the  time  of  such  separation. 
In  making  partition  of  the  property  of  a  religious  corpora- 
tion, in  case  of  division,  mathematical  nicety  is  neither  attaina- 
ble nor  important.  The  only  satisfactory  mode  is  to  count 
church  members,  by  virtue  of  their  membership,  and,  in  addi- 
tion, to  count  all  pew  holders,  as  members  of  the  congrega- 
tion.2 While  two  parties  in  a  congregation  were  trying  to  get 
possession  of  the  church  property,  and  their  disputes  were 
under  the  scrutiny  of  the  synod  of  the  church,  the  court 
directed  each  party  alternately  to  have  the  weekly  use  of  it.3 
A  seceding  minority  of  a  church,  while  in  good  faith  in  pos- 

'Lambv.  Cain,  129  Ind.  486;  29  N.  Paige  296;  Lawyer  v.    Chipperly,  7 

East.   Rep.    13;  Nance  v.   Busby,  91  Paige  281;  Watkins  v.  Wilcox,  66  N. 

Tenn.  303;  18  S.  W.  Rep.  874;  White  Y.  654;  Church  v.  Seibert,  3  Pa.  St. 

Lick   Quar.    Meeting  v.  White  Lick,  282;  Harmon  v.  Dreher,  1  Speer's  Eq. 

etc.,  89   Ind.  136;  Watson  v.  Jones,  87;  Smith  v.  Nelson,  18  Vt.  511;  Bow- 

80  U.  S.  679;  Gaff  v.  Greer,   88  Ind.  den  v.  McLeod,  1  Edw.  Ch.  (N.  Y.) 

122.     In  these  cases  the  authorities  588;  Roshi's  Appeal,  69  Pa.  St.  462. 
are    reviewed  at  great  length  and       2  Niccolls  v.  Rugg,  47  111.  47;  Hale 

among  those  which  are  cited  upon  v.  Everett,  53  N.  H.  9. 
the  above  and  kindred  propositions       3Bowden  v.  McLeod,  1  Edw.  Ch. 

are  the  following  :  Harrison  v.  Hoyle,  (N.  Y.)  588;  see  Curd  v.  Wallace,  7 

24  Ohio  St.   254;  Chase    v.  Cheney,  Dana    (Ky.)   190,    where    the    court 

58  111.    509;  Church  v.  Witherell,  3  divided  the  use  of  the  church. 


JURISDICTION    OF   COURTS    OVER    SOCIETIES.  263 

session  of  the  church  building,  placed  repairs  upon  it  which 
were  necessary,  and  it  was  held  that  they  had  a  good  claim 
for  the  value  of  the  improvements,  which  should  be  paid  by 
the  majority,  as  a  condition  to  the  exclusive  use  of  the  house 
by  the  latter.1  An  organized  church  can  not  be  divested  of 
its  property,  even  though  a  majority  of  its  members  enter  into 
a  new  organization  which  adopts  the  name  of  the  original 
church,  provided  the  old  organization  still  exists.2 

§  134.  Property  and  trusts  of  religious  societies. — The 
rights  of  property  and  contract  in  religious  organizations  are 
under  the  protection  of  the  law,  and  the  actions  of  their  mem- 
bers are  subject  to  its  restraints.  Where  a  church  is  of  a 
strictly  congregational  or  independent  organization,  and  the 
property  held  by  it  has  no  trust  attached  to  it,  its  right  to  the 
use  of  the  property  must  be  determined  hy  the  ordinary  prin- 
ciples which  govern  voluntary  associations.3  A  charitable  be- 
quest to  an  unincorporated  religious  society  is  not  invalid  by 
reason  of  its  being  composed,  to  a  great  extent,  of  persons  not 
resident  within  the  state.  Nor  is  such  bequest  void,  because 
given  simply  to  an  unincorporated  association,  and  not  for  any 
specified  charitable  use.4  The  majority  in  a  religious  associa- 
tion, not  incorporated,  have  supreme  control  and  direction  of 
the  use  of  the  church  property,  as  respects  all  matters  not  de- 
termined by  the  articles  of  association  of  the  particular  society, 
the  organization  and  discipline  of  the  denomination  to  which 
it  belongs,  or  the  trust  under  which  the  property  may  have 
been  conveyed;  and  the  minority  can  not.  by  procuring  a  char- 
ter of  incorporation,  acquire  the  right  to  the  management  of 

1  Hadden  v.   Chorn,   8  B.  Monroe  vise,"   etc.,  provided  that  the    land 

(Ky.)  70.  should  l>e  used  as  a  parsonage  by  the 

Tenable  v.   Coffman,  2  W.  Va.  society,  and  that,  when  the  society 

310;    Harper  v.  Straus,  14  B.  Mon.  should  cease  to  use  it  as  Such,  it  should 

(Ky.)  48;  see  Smith  V.  Pedigo  (Ind.),  revert  to  testator's  heirs.      II,  hi.  that 

88  N.  Hast.  Rep.  777.  the  devise  did  do!  vest  until  the  death 

Watson  v.  Jones,  SOU.  S.  679.  of  testator's  wife,  and  that  the  society, 

4  Evangelical  Ass'n  Appeal,  85  Pa.  having  been  incorporated  during  hei- 
st. :il(i;  Banks  v.  Phelan,  4  Barb.  (N.  life,  was  competent  to  take  under  it. 
Y.)  *<».  though  not  incorporated  at  the  time 

A   will  giving   testator's  wife  the  of    testator's    death.      Longhead    v. 

use  of  land  for  life,  and  devising  it  to  Church,  129  N.  Y.  811;   29  N.  East. 

a  religious  society  by  the  words,  "At  Rep.  249;  12  N.  Y.  Supp.  207. 
the  death  of  my  wife,  I  give  and  de- 


26i  JURISDICTION    OF   COURTS    OVER    SOCIETIES. 

the  property  in  opposition  to  the  will  of  the  majority  of  those 
interested.1  Where  a  religious  society  purchases  land,  and  the 
title  vests  in  it  in  fee,  as  a  corporation,  the  majority  of  the  so- 
ciety has  a  right  to  control  its  use  and  occupation.  They  can 
not  be  deprived  of  this  right  by  any  supposed  error  of  doc- 
trine. It  is  incident  to  the  very  nature  of  such  corporation  to 
hold  such  property  at  the  will  of  a  majority,  if  the  charter  of 
incorporation  does  not  otherwise  provide.  They  may  occupy 
and  manage  such  property  as  they  please,  so  long  as  they  ad- 
mit the  minority  to  the  same  benefits  as  themselves." 

Individuals  may  dedicate  property,  by  way  of  trust,  to  the 
purpose  of  sustaining  and  propagating  definite  religious  doc- 
trines, and  it  is  the  duty  of  the  court  to  see  that  the  property 
so  dedicated  is  not  diverted  from  such  trust.  It  is  not  in  the 
power  of  the  majority  of  a  congregation  to  carry  the  property 
so  confided  to  them  to  the  support  of  a  new  and  conflicting 
doctrine.3 

Where  a  fund  is  bequeathed  to  an  ecclesiastical  society,  the 
interest  of  which  is  to  be  applied  for  the  purpose  of  maintain- 
ing a  free  school  in  one  of  the  districts,  an  agreement  by  the 
society  to  apply  the  fund  to  the  support  of  the  ministry  is  a 
fraud  on  third  persons,  and  void.4 

A  court  of  equity  will  not  interfere  to  prevent  the  misuse 
or  abuse  of  a  trust  of  a  religious  nature,  unless  there  is  a  real 
and  substantial  departure  from  the  purposes  of  the  trust, 
which  amounts  to  a  perversion  of  it.6  A  complaint  for  the 
recovery  of  real  estate,  stating  in  substance  that  plaintiffs  are 
members  of  a  certain  religious  society  and  sue  for  the  benefit 
of  themselves  and  all  other  members ;  that  the  society  is  in 
full  membership  with  a  certain  national  church,  and  was 
organized  to  teach  the  gospel  according  to  the  rules,  discipline, 
and  doctrine  of  that  church;  that  the  society  was  incorporated; 
that  it  purchased  the  property  in  question  to  be  used  as  a  par- 
sonage, with  funds  contributed  by  its  members  and  others;  and 
that  the  defendants,  who  were  members  also,  procured  the 

1  Henry  v.  Dietrich,  84  Pa.  St.  286;  White  Lick  v.  White  Lick,  89  Ind. 
Mason  v.  Finch,  28  Mich.  282.  136. 

2  Keyser  v.  Stausifer,  6  Oh.  363;  4  Bailey  v.  Lewis,  3  Day  (Conn.) 
Calkins  v.  Cheney,   92  111.   463;   see  450. 

§  15.  »  Happy  v.  Morton,  33  111.  398. 

C  3  Watson  v.   Jones,   80  U.  S.  679; 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  205 

name  of  the  corporation  to  be  changed  for  fraudulent  pur- 
poses, and  diverted  the  property  from  its  intended  use,  avers 
a  good  cause  of  action.  An  allegation  that  the  plaintiffs 
accepted  one  doctrinal  standard  and  the  defendants  another, 
is  sufficiently  definite,  though  it  does  not  show  the  difference 
between  the  two  confessions  of  faith.1 

Where  a  number  of  persons  contribute  to  the  erection  of  a 
church  edifice  upon  the  agreement  that  it  is  to  be  used  by  a 
certain  religious  society,  and,  when  not  in  use  by  it,  by  other 
denominations,  and  for  "  lectures,  concerts,"  etc.,  it  is  not  nec- 
essary for  all  the  persons  contributing  to  the  erection  of  the 
building  to  join  in  an  action  to  restrain  a  sale  of  the  property 
for  mercantile  purposes.  Where  a  church  edifice  has  been 
erected  by  voluntary  contributions,  and  upon  the  promise  and 
agreement  that  the  building  is  to  be  used  for  certain  specified 
purposes,  the  contributors  have  a  right  to  insist  that  the  prop- 
erty be  used  for  the  purposes  named,  and  may  enjoin  a  sale  of 
the  building,  where  no  adequate  cause  therefor  is  shown,  and 
the  effect  would  be  to  divert  the  funds  from  the  use  intended, 
and  apply  them  elsewhere.2  An  eleemosynary  charity  is,  in 
the  general  scope  of  its  benevolence,  essentially  unsectarian, 
and  can  only  be  made  sectarian  by  having  such  limitations 
and  restrictions  placed  upon  it  by  the  donor  as  make  it  so. 
The  mere  making  of  an  ecclesiastical  organization  the  trustee 
for  an  ordinary  eleemosynary  charity  does  not  of  itself  give  a 
sectarian  character  to  the  charity,  and  if  no  limitations  or  re- 
strittions  are  imposed  to  the  contrary,  the  ecclesiastical  body 
may  continue  in  possession  of  the  charity  as  its  trustee  so  long 
as  it  continues  to  be  essentially  and  characteristically  the  same 
organization,  without  reference  to  changes  or  modifications 
which  it  may  make  in  matters  of  mere  detail,  or  of  relatively 
subordinate  importance,  connected  with  its  faith,  dootrine  and 
practices.3 

AV  hen  a  society,  of  a  particular  religions  sect  or  denomination, 
is  formed  with  a  strictly  sectarian  or  denominational  mime 

'Baker  v.  Ducker,  79  Cal.  365;  21  136;  Attorney  Genera]  v.  Moore,   L9 

Pac.  Rep.  764.  N.J.  Eq.  503;  Watkins  v.  Wilcoxi  66 

2  Avery  v.  Baker,  27  Neb.  388;  43  N.  Y.  654;    Presbyterian   Congrega- 
N.  W.  Rep.  174.  tion  v.  Johnston,  l  Watts  &  Ser.  9. 

3  White  Lick  v.  White  Lick,  89  Ind. 


26G  JURISDICTION   OF   COURTS    OVER    SOCIETIES. 

descriptive  of  the  fundamental  doctrines  of  the  sect  to  which 
it  belongs,  the  presumption  is  that  it  was  constituted  for  the 
purpose  of  promoting  the  vital  and  fundamental  doctrines  of 
such  sect  or  denomination.  In  such  cases,  where  a  conveyance 
is  made  to,  or  a  trust  created  for  the  benefit  or  use  of  such  relig- 
ious society,  by  its  denominational  name,  with  no  other  par- 
ticular designation  in  the  deed  of  the  tenets  or  doctrines  which 
it  is  to  be  used  to  advance  and  support,  the  denominational 
name  may  be  a  sufficient  guide  as  to  the  nature  of  the  trust, 
so  far  as  respects  doctrines  which  are  admitted  to  be  funda- 
mental. And  in  such  case,  those  having  control  of  property 
held  in  trust  for  the  benefit  of  such  religious  society  may  be 
restrained  from  applying  the  property,  or  the  use  of  it,  to  the 
promotion  of  religious  tenets  and  doctrines  clearly  opposed 
and  adverse  to  the  fundamental  doctrines  and  faith  of  such 
sect  or  denomination  at  the  time,  and  immediately  after,  such 
trust  was  created.1  Where  the  original  trustees,  appointed  by 
the  founders  of  a  religious  charity  or  trust,  applied  the  fund 
to  the  support  of  certain  religious  doctrines,  and  that  applica- 
tion has  been  long  continued,  and  has  always  been  acquiesced 
in  by  the  founders  of  the  charity  or  trust,  a  court  of  equity 
will  not  permit  such  application  to  be  changed  or  interfered 
with,  unless  such  change  is  clearly  required  by  the  plainly 
expressed  intention  of  the  donor.2  The  religious  tenets  of  a 
donor  in  trust  to  a  religious  corporation  may  be  shown,  as 
well  as  other  circumstances,  to  aid  in  the  construction  of 
ambiguous  provisions.3 

§135.  Trustees  and  officers  of  religious  societies. — 
There  is  one  principle  common  to  the  trustees  of  all  incorpo- 
rated churches.  They  have  the  possession  and  custody  of  the 
temporalities  of  the  church.  They  are  considered,  virttite 
officii,  entitled  to  the  possession,  and  are  lawfully  seized  of 
the  grounds,  buildings,  and  other  property  belonging  to  the 
church.  Though  they  hold  the  church  property  in  trust  for 
the  congregation,  still  it  is  their  possession,  and  the  courts  are 
bound  to  protect  them  against  every  irregular  and  unlawful 
intrusion  made  against  their  will,   whether   by   the   pastor, 

1  Hale  v.  Everett,  53  N.  H.  9.  8  Kniskern  v.  Church,  1  Sand.  Ch. 

2  Hale  v.  Everett,  supra.  (N.  Y.)439. 


JURISDICTION    OF    COURTS    OVER    SOCIETIES.  267 

members  of  the  congregation  or  by  strangers.1  A  court  of 
chancery  has  jurisdiction  to  compel  the  persons  having  charge 
of  the  temporalities  of  a  church,  incorporated  or  otherwise,  to 
the  faithful  performance  of  their  trust,  and  also  to  prevent  the 
diversion  of  the  property  from  its  original  purpose.2  A  court 
has  jurisdiction  to  compel  the  trustees  of  a  church,  who  have 
violated  their  trust  by  appropriating  the  funds  to  the  propa- 
gation of  doctrines  differing  from  the  legitimate  doctrines 
of  the  church,  to  deliver  up  the  church  property  to  other 
trustees  of  the  church,  who  will  properly  apply  them,  and 
who  have  been  duly  elected  by  those  entitled  to  elect  trustees.3 
A  court  of  equity  will  entertain  jurisdiction  to  compel  the 
trustees  of  a  church  to  permit  clergymen  who  adhere  to  the 
principles  of  the  church,  to  minister  to  the  congregation  in  the 
church  edifice,  without  regard  to  the  comparative  numbers  of 
the  respective  parties  in  the  congregation.4  Whenever  the 
trustees  of  a  religious  society  organized  under  the  general  law 
concerning  its  incorporation,  do  any  act  which  obstructs  the 
enjoyment  of  the  property  for  the  purposes  and  in  the  mode 
authorized  by  the  usages  of  the  church  as  an  organized  body, 
they  are  guilty  of  a  violation  of  that  trust,  which  will  be  cor- 
rected by  a  court  of  chancery.  A  trust  of  this  character  is 
not  distinguishable,  in  this,  from  any  other  trust  over  which 
courts  of  chancery  exercise  a  supervisor  power.6  Trustees 
are  seized  for  the  use  of  the  body;  and  each  member  of  the 
church  becomes  entitled  to  a  beneficial  interest  in  the  property 
of  the  church,  so  long  as  his  or  her  connection  or  membership 
continues.  All  the  members  of  the  body  become  beneficiaries 
in  such  property  in  an  equal  degree,  notwithstanding  some  of 
them  may  have  contributed  a  larger  sum  than  others  toward 
the  common  property."  Aliens  may  be  trusteesand  incorpora- 
tors in  a  religious  corporation.7  The  court  has  no  authority 
to  control  the  discretion  of  the   trustees  of  a  church  in  the 

'German  Congregation  v.  Presler,  ■  Brunnenmeyer v. Buhre, 83 111.188; 

17  La.  Ann.  127.  Ferraria  v.  Vasconcellos,  :ii  ill.  25. 

8Bowden  v.   McLeod,  1  Edwards  *  Brunnenmeyer  v.  Buhre,  supra; 

Ch.   (N.  Y.)  588;  Wilson  v.  Island  Ferraria  \.  Vasconcellos,  supra. 

Church,  2  Rich.  (S.  C.)  Eq.  L92.  '  Canimeyer  v.  Church.  2  Band.  Ch. 

3  Gable  v.  Miller,    10 Paige  (N.  Y.)  (N.  Y.)  186. 
627;  Watson  v.  Jones,  80  U.  S.  679. 

♦Skilton   v.  Webster,     Brightley's 
Repts.  (Pa.)  203. 


263  JURISDICTION  OF  COURTS  over  societies. 

management  of  its  funds,  so  long  as  they  do  not  violate  their 
charter;  they  are  responsible  to  their  constituents  alone.1  A 
majority  of  the  members  of  the  church  can  not  control  the 
action  of  the  trustees,  in  regard  to  its  property,  against  the 
usage  and  rules  of  the  organization.2  Where  the  trustees  of 
a  church  corporation  executed  a  mortgage  on  a  church  prop- 
erty to  secure  a  legitimate  debt,  it  was  held  that  there  was  no 
equity  in  refusing  to  enforce  the  mortgage,  under  color  of  pro- 
tecting a  charitable  use.3 

1  Wardens  v.   Barksdale,  1  Strobh.  Sutter  v.  Trustees,    6  Wright  (Pa. ) 
(S.  C.)  Eq.  197.  510. 

2  Brunnenmeyer  v.'  Bulire,  supra;  3  Magie  v.  Church,  13  N.  J.  Eq.  77. 
People  v.  Steele,  2  Barb.  (N.  Y.)397; 


PAET  II. 

THE  LAW  OF  MUTUAL  BENEFIT 
INSURANCE. 


THE  LAW  OF  MUTUAL  BENEFIT  INSURANCE. 


CHAPTER  X. 

CERTIFICATE  OF  MEMBERSHIP. 

§  136,  137.     Generally. 

138,  139,  140.     When  the  contract  is  complete;  delivery  of  certificate. 

141.  Where  executed. 

142.  Delay  of  society  in  accepting  application. 

143.  144.     Construction  of  the  contract. 

145.  Construction  given  to  the  contract  by  the  society. 

146.  Construction  of  application  and  certificate. 

147.  Where  terms  of  a  certificate  are  inconsistent  with  a  by-law. 

148.  By  whom  certificate  must  be  signed. 

149.  Delivery  of  certificate  to  beneficiary  not  necessary. 

150.  Contract  must  be  accepted  in  its  entirety. 
161.  Certificates  are  valued  policies  of  insurance. 
152.  Reformation  of  certificate. 

158.  Reformation;  inserting  name  of  beneficiary. 

154.  Novation  of  the  contract. 

155.  In  good  standing. 

156.  Suicide. 

157.  Known  violation  of  law. 

§  136.  Generally. — An  ordinary  life  insurance  policy  con- 
tains  the  whole  eontracl  of  insurance,1  bul  the  certificate  of 
membership  in  a  mutual  benefit  Bociety  is  only,  a  part  of  the 
written  evidence  of  the  contract;  In  such  a  society,  the 
charter,  constitution  and  by-laws  in  force  at  the  time  of  the 
admission  of  the  member  are  terms  of  an  executory  contract 
to  which  he  assents  when  he  enters  it.  and  are,  therefore,  a 
pari  of  the  contraol  of  insurance,  whether  they  are  referred  to 
in  the  certificate  of  membership,  or  not.1    In  some  societies, 

1  Union  Mutual  v.  Mowry,  96  U.  S.  buque  Mutual,  18  Iowa,  822;  David- 
544.  son  \.  Old  People's  Mutual,  Bfl  Minn. 

•Supreme  Commandery  v,  Ains-  808;  Bfl  N.  W.  Rep.  808|  Hellenberg 
worth,   71  Ala.  436;  Sineral  v.  Du-  v.  I.  O.  O.  B.,  M  N.  V.  580;  Masonic 

(27  lj 


272  CERTIFICATE    OF    MEMBERSHIP. 

the  issue  of  certificates  of  membership,  as  a  part  of  the  con- 
tract of  insurance,  is  not  contemplated.  The  charter,  con- 
stitution and  by-laws  of  such  societies  are  made  to  contain  the 
whole  plan  of  insurance,  designating  who  shall  be  the  bene- 
ficiaries of  its  members,  fixing  the  amount  of  the  benefit  fund, 
and  setting  forth  the  terms  of  the  entire  contract.1  In  such 
cases,  membership  in  the  society  carries  with  it  a  specified 
amount  of  life  insurance.  The  certificate  of  membership  is, 
in  any  event,  a  mere  fragment  of  the  contract,  and  it  may  be 
said,  without  much  extravagance  of  expression,  that  whatever 
vitality  it  possesses  is  derived  from  the  charter,  constitution 
and  by-laws  of  the  society.  The  contract  of  mutual  benefit 
insurance  is  usually  between  the  society  and  the  member,  and 
not  between  the  society  and  the  beneficiar}^.  In  such  case, 
the  charter,  constitution  and  by-laws  with  regard  to  the  classes 
of  persons  who  may  take  the  fund  on  the  death  of  the  member, 
and  the  interests  and  amounts  which  they  shall  take,  may  be 
changed  from  time  to  time,  with  the  consent  of  the  member, 
so  as  to  limit,  abridge  or  annul  the  prospective  interest  of  the 
person  designated  as  the  beneficiary;  and  such  changes  are 
not  subject  to  objection  as  impairing  vested  rights,  or  the 
obligation  of  contracts.2  Where  the  constitution  declares  that 
the  by-laws  may  be  amended  at  any  time,  a  designated  bene- 
ficiary can  not  complain  that  a  by-law  in  force  when  the 
certificate  was  issued,  providing  that  the  member  might 
surrender  the  certificate  with  the  consent  of  the  beneficiary, 
and  receive  a  new  one,  was  amended  so  as  to  omit  the 
requirement  of  his  consent.  A  beneficiary  has  no  vested 
rights  in  such  a  certificate,  not  being  a  party  to  the  con- 
tract, and  he  can  not  recover  on  the  original  certificate 
when  it  has  been  surrendered  and  a  new  one  issued.3  Cer- 
tificates   of    membership   usually  provide   for   the    payment 

Mutual  v.   Burkhart,    110  Ind.   192;  'Baldwin  v.  Fraternity,  47  N.  J. 

Supreme  Council  v.  Smith,  45  N.  J.  Law,   111;   Dolan  v.  Court  of  Good 

Eq.  466;  17  Atl.   Rep.  770;  Supreme  Samaritan,    128    Mass.    437;    Grand 

Lodge  v.   Nairn,   60  Mich.  44;  Van  Lodge  v.  Eisner,  26  Mo.    App.  108; 

Bibber  v.   Van  Bibber,   82  Ky.  350;  McClure  v.  Johnson,  56  Iowa  620. 

Splann  v.  Chew,  60  Texas  535;  Miller  2  §§  211,  212,  213. 

v.  Assurance  Co.,  42  N.  J.  Eq.  459;  3 Byrne  v.   Casey,   70  Texas,   247; 

7  Atl.  Rep.  895;  Railway  Association  8  S.  W.  Rep.  38;  Catholic  Knights  v. 

v.  Robinson,  147  111.  138.  Franke,  137  111.  118. 


CERTIFICATE   OF   MEMBERSHIP.  2TS 

of  the  benefit  fund,  on  condition  that  the  member  shall  have 
complied  with  the  constitution  and  by-laws  of  the  society  up  to 
the  time  of  his  death.  The  constitution  and  by-laws  referred 
to  in  such  a  provision  are  those  in  force  at  the  time  of  the  is- 
suing of  the  certificate,  and  the  society  has  no  right,  by  amend- 
ing or  repealing  any  of  them,  without  his  assent,  to  impose 
any  new  conditions  affecting  the  contract  to  his  injury,  or,  by 
a  new  provision,  passed  after  the  making  of  the  contract,  to 
forfeit  his  rights  under  it.  The  rights  of  the  members  stand 
entirely  free  from  such  control.  In  a  contract  of  mutual 
benefit  insurance  the  member  acts  for  himself,  and  not  as  a 
part  of  the  society;  his  rights  rest  upon  his  contract  of  in- 
surance, not  upon  his  contract  of  membership  in  the  society. 
A  corporator  in  a  mutual  benefit  society,  like  a  stranger,  may 
enter  into  a  contract  of  insurance  with  it,  and  his  rights  under 
the  contract  will  be  as  fully  protected  as  those  of  a  stranger.1 
The  provisions  of  the  charter,  constitution  and  by-laws,  so  far  as 
they  relate  to  this  contract,  can  not  be  altered  so  as  to  affect  it, 
without  the  consent  of  the  assured  member.2  But  an  amend- 
ment to  the  by-laws  made  merely  for  the  purpose  of  regulating 
the  mode  of  transacting  its  business,  adding  no  new  condition 
to,  and  subtracting  nothing  from  the  contract  of  insurance 
already  issued  by  the  society,  is  binding  on  him.3  Where  there 
is  nothing  in  the  original  contract,  which,  in  terms  or  by  im- 
plication, authorizes  any  change  in  its  provisions  or  condi- 
tions, by-laws  subsequently  passed,  do  not  become  a  part  of 
that    contract.4     Of  course,  he   may  consent   that    they  shall 

•See  ?'  i''-.  Insurance  Co.   v.   Con-  App.  627;  Eastman  v.  Provident  Mu- 

nor,  17  Pa.  St.  (5  Harris)  186:  Willcuta  fcual  (N.   B.),  20  Cent.  Law   .1.  266; 

v.  N.  \\ .  Muni;, I.  81    End.  800;  New  Schuni  v.   Fond,  11   Wis.  875;   Bol- 

England    Mutual,  etc.,  v.  Butler,  84  land   v.  Taylor,   ill  End.    121;  Bauer 

Me.    461;    Middlesex,    etc,    Co.,   v,  v.  Samson    Lodge,   102  Ind.  262;  N. 

Swan,  10  Mass.884;  Protection  Life  v.  W.   Association   v.    Wanner.   24   III. 

7'.)  111.  861;  X.  W.   Ben.  Assn.  App.  857;  Richmond  v.  Johnson,  28 

\.  Wanner,  24  III.  App.  '■'•'>'.  Minn.  149;  Grand  Lodge  v.  Sater,  44 

See  .'.'  16  to  19;  Morrison   v.    In<.  Mo.  App.  445. 
Co.,59Wis.  162;  18   N.  W.    Rep.  18;       '  Georgia  Masonic  v.  Gibson,  52  Ga. 

Gundlach  v.  Association,  49  How.  Pr.  640;  Walsh  v.  Ins.  Co.,  80  Iowa   145; 

190;  Pulford  v.  Fire  Department,  81  Treadwayv.  Bamilton,  29  Conn.  68. 
Mich.    158;  Becker  v.  Farmers    Mu-       *§§25to28;  Bobbs v. Association, 

tual.  48   Mich.   610;    12   N.  W.    Rep.  82   low;,    107;    17    N.  W.    Rep.   988; 

*7i:  Bradfield   v.    Union   Mutual.  '.)  Courtney    \.    Association  (Iowa),  58 

Weeklj  Not  joI  Cases(Pa.)  186  j  By-  N.W.  Rep. 288. 
singer   v.    Supremo    Lodge.    4:2  Mo. 
18 


274  CERTIFICATE    OF    MEMBERSHIP. 

modify  it,  but  in  that  case  they  become  effective  by  reason  oi 
his  consent,  not  by  reason  of  their  enactment.  It  will  be  pre- 
sumed that  an  amendment  to  the  by-laws  was  not  intended  tc 
affect  a  contract  of  insurance  previously  issued  by  the  society, 
and  it  will  be  so  construed  as  to  give  it  a  retroactive  force 
only  where  the  intention  to  have  it  so  operate  is  clear  and  un- 
doubted.1 

§  137.  While  members  are  presumed  to  know,  and  to  con- 
tract with  reference  to  existing  by-laws  only;  while  a  society 
has  no  power,  by  laws  of  its  own  enactment,  to  disturb  or  di- 
vest rights  which  it  has  created,  or  to  impair  the  obligations 
of  its  contracts,  or  to  change  its  responsibilities  to  its  mem- 
bers, or  to  draw  them  into  new  and  distinct  relations,  still, 
members  may  contract  with  societies  with  reference  to  laws 
of  future  enactment,  and  may  agree  to  be  bound  and  affected 
by  future  laws,  as  they  are  bound  and  affected  by  those  then 
in  existence;  and  they  may  consent  that  laws  of  future  enact- 
ment shall  enter  into,  and  form  a  part  of  their  contracts,  modi- 
fying or  varying  them.  "Where  a  contract  of  insurance  is 
issued,  conditioned  that  it  shall  be  subject  to  such  by-laws  as 
may  be  enacted  by  the  society,  by-laws  subsequently  passed 
become  a  part  of  the  contract.  Where,  for  instance,  the  con- 
tract provided  no  forfeiture,  if  the  member  should  die  by  his 
own  hand,  but  provided  that  any  violation  of  the  "  require- 
ments of  the  law  now  in  force,  or  hereafter  enacted,  governing 
the  order,  or  this  class,  shall  render  this  certificate  null  and 
void,"  and  that  the  obligation  of  the  society  should  depend 
upon  the  member's  "  full  compliance  with  all  the  laws  of  the 
order  now  in  force,  or  that  may  hereafter  be  enacted; "  where 
the  certificate  was  accepted  by  the  member  in  writing,  "  sub- 
ject to  the  laws  of  the  order  now  in  force,  or  which  may  here- 
after be  enacted  by  the  supreme  commandery,"  it  was  held 
that,  by  force  of  these  stipulations  and  provisions,  a  by-law, 
enacted  by  the  society  after  the  certificate  was  issued  and  ac- 
cepted, providing  that  a  certificate  of  this  class  should  be  for- 
feited if  the  member,  whether  sane  or  insane,  should  take  his 
own  life,  entered  into  and  formed  a  part  of  the  certificate, 
avoiding  it  in  the  event  that  the  member,  whether  sane  or  in- 
sane, should  take  his  own  life.2     A  person  accepting  directly, 

1  §  27.  worth,  71  Ala.  436;  see  Borgards  v. 

2  Supreme    Commandery  v.   Ains-    Ins.  Co.,  79  Mich.  440;  44  N.  W.  Rep. 


CERTIFICATE    OF    MEMBERSHIP.  275 

or  bv  assignment  from  the  assured  member,  a  certificate  in  a 
mutual  benefit  society,  declaring  that  its  constitution  and  by- 
laws are  a  part  of  the  contract,  is  bound  by  them.  He  is  not 
justified  in  supposing  that,  because  each  of  the  conditions  an- 
nexed to  the  certificate  refers  to  a  by-law,  the  by-laws  contain 
no  further  conditions.1 

§  138.  When  the  contract  is  complete;  delivery  of  certifi- 
cate.— The  application  for  insurance  is  a  mere  proposal 
which  the  society  is  at  liberty  to  accept  or  decline.  When 
the  society  by  some  act  of  its  proper  officers  accepts  it,  the 
minds  of  the  parties  meet  and  the  contract  is  made.  But  it  is 
evident  that  the  insurer  may  accept  it  conditionally,  upon 
such  terms  as  it  may  see  fit  to  impose,  and,  in  such  case,  the 
last  act  required  by  the  acceptance  to  be  done,  must  be  done, 
before  the  negotiations  ripen  into  a  contract.  If  the  applica- 
tion is  accepted,  subject  to  the  payment  of  a  membership  fee 
or  an  assessment,  the  payment  must  be  made  before  the  con- 
tract is  complete,  and  upon  such  payment  or  the  tender  of 
it,  within  a  reasonable  or  the  stipulated  time,  the  contract  is 
in  force.  A  contract  of  insurance  may  be  valid  before  actual 
delivery  of  the  policy.  Where  the  minds  of  the  contracting 
parties  have  met  upon  a  distinct  proposition  made  by  the  one 
and  accepted  by  the  other,  chancery  will  decree  its  execution, 
and  where  the  minds  of  the  parties  have  thus  met,  an  agent 
may  not  refuse  to  deliver  a  policy  on  account  of  the  changed 
condition  in  health  of  the  assured.2  Thus,  when  an  applica- 
tion is  sent  through  the  local  agent  to  the  home  office,  and 
the  company  accepts  it,  and  sends  a  policy  to  the  agent  for 
delivery  to  the  applicant,  it  is  the  duty  of  the  agent,  unless  it 
is  otherwise  agreed  between  the  parties,  or  he  is  otherwise 
instructed  by  the  company,  t<»  deliver  the  policy,  upon  tender 
of  the  premium,  even  though  the  applicant  may  have  become 
dangerously  ill.3  It  is  the  duty  of  an  applicant  for  insurance 
to  communicate   to  the  society  any  material  change  in  his 

856;  Korn  v.  Society,  6  Crunch    L92;  tacky    Mutual    v.  .Tmks.  5   Iiul.  90; 

Hutchinson  v.  Supreme  Tent,  22  N.  Crittenden  v.  Ins.  Co..   II  Midi.  142; 

Y.  Supp.  801:  see  §§  26,  27.  Schwartz  -v.  Ins.  Co.,  21   Minn.  215; 

1  Miller  v.  Association,  42  N.  J.  Eq.  is   Minn.    149;    Yonge  v.  Society,  30 

459;  7  Atl.  Rep.  895.  Fed.  Rep.  903;  Ballocb  v.  Los.  <  ,,.,  26 

*  Fried   v.  Ins.  Co..  50  N.  Y.  248;  X.  J.  Law  (2  Dutcher)  268  278. 

Cooper  v.  Ins.  Co.,  7  New  116;  Ken-  'Schwartz  v.  Ins.  Co.,  supra. 


276  CERTIFICATE    OF   MEMBERSHIP. 

health,  in  the  interval  between  the  making  of  the  application 
and  the  acceptance  of  it,1  and  where  the  certificate  is  delivered 
and  an  assessment  or  membership  fee  is  accepted  in  ignorance 
of  the  fact  that  there  has  been  a  material  change  in  the  health 
of  the  applicant,  the  contract  is  null  and  void.2  But  if  the 
minds  of  the  parties  have  met,  though  the  certificate  has  not 
been  issued  and  the  entrance  fee  or  assessments  have  not  been 
paid,  it  is  immaterial  that  there  has  been  a  change  in  the 
health  of  the  applicant  since  the  acceptance  of  the  application.3 
The  insurer  may  transmit  its  certificate  to  its  local  agent 
with  instructions,  general  or  special,  and  may  direct  him  to 
deliver  it  to  the  applicant,  upon  certain  payments,  provided  the 
latter  is  in  good  health  when  the  payments  are  made.  In  such 
case,  the  ill  health  of  the  applicant  is  a  good  excuse  for  the  re- 
fusal of  the  agent  to  make  the  delivery.  The  constitution  of 
a  society  provided  that  upon  examination  of  an  applicant,  and 
approval  of  the  application  by  the  supreme  lodge,  and  the 
signing  of  the  certificate  of  membership,  and  the  forwarding 
of  it  to  the  subordinate  lodge,  the  contract  should  be  complete. 
A  certificate  was  forwarded  to  the  subordinate  lodge  and  re- 
tained by  it  on  the  ground  of  fraud  in  the  application.  While 
the  lodge  held  the  certificate  the  member  died.  There  was  no 
evidence  of  fraud  in  the  application  made  to  the  society,  and 
it  was  held  that  the  beneficiary  might  recover  on  the  certifi- 
cate without  producing  it  in  evidence.4  A  supreme  lodge  ex- 
ecuted a  certificate  of  membership  and  sent  it  to  a  subordi- 
nate lodge  to  be  countersigned  by  the  subordinate  lodge,  as 
required  by  the  by-laws,  and  delivered  to  the  member.  It  was 
not  countersigned  or  delivered  to  the  member,  but  was  in  the 
custody  of  the  subordinate  lodge  when  the  member  died.  The 
question  for  the  court  to  decide  was,  whether  the  certificate 
Avas  so  far  perfected,  in  accordance  with  the  laws  of  the  order, 
as  to  entitle  the  beneficiary  to  recover  the  fund.     The  court 

'Whiting    v.   Ins.   Co.,  129  Mass.  Ch.  132;  Piedmont  Ins.  Co.  v.  Ewing, 

240;   Whitley  v.  Ins.  Co.,  71   N.  C.  92  U.  S.  377. 

480;  Piedmont  Ins.  Co.  v.  Ewing,  29  3  Franklin  Ins.  Co.  v.  Colt,  20  Wall. 

U.  S.  377;  Ins.  Co.  v.  Higginbotham,  560;  Day    v.    Ins.  Co.,  1   McArthur 

95  U.  S.  380.  598. 

2  Canning  v.  Farquar,  16  L.  R.  Q.  4Lorcher    v.    Supreme    Lodge,  72 

B.  D.  727;  Whitley  v.  Ins.  Co.,  supra;  Mich.  316;  40  N.  W.  Rep.  545. 
British  Equitable  v.  Ins.  Co.,  38  L.  J. 


CERTIFICATE    OF   MEMBERSHIP.  277 

said  :  "  It  is  manifest  that  the  only  object  of  the  countersign- 
ing would  be  to  show  that  the  certificate  had  reached  the 
in  ember  by  the  regular  channel.  It  was  not  intended  and 
could  not  give  additional  force  to  the  agreement  of  the  su- 
preme lodge  to  pay  the  money.  It  imposed  no  obligation  or 
duty  upon  the  subordinate  lodge,  nor  did  it  in  any  way  indi- 
cate the  direction  or  want  of  direction  on  the  part  of  (the 
member).  It  was  nothing  more  than  the  performance  of  a 
duty  required  by  a  principal  from  his  agent,  to  show  that  the 
agent  had  performed  a  ministerial  act.  *  *  *  Upon  what 
principle  should  an  accident  which  prevented  countersigning 
and  actual  delivery  to  (the  member)  relieve  the  supreme  lodge 
from  the  performance  of  their  contract  ?  Delivery  to  an  agent 
for  delivery  to  a  party  in  interest  is  a  completed  delivery  from 
the  time  the  agent  has  received  the  instrument.  The  princi- 
pal can  not  take  advantage  of  the  failure  of  the  agent  to  per- 
form an  act  over  which  the  party  having  the  beneficial  interest 
has  no  control.' " 

A  member  of  a  local  council  in  California  sent  his  application 
for  insurance  to  the  supreme  court  of  American  Legion  of 
Honor  at  Boston,  Mass.  The  application  was  returned  to  the 
local  council  for  correction  of  a  clerical  irregularity  in  the  cer- 
tificate of  the  medical  examiner.  The  irregularity  was  cor- 
rected, and  the  application  again  sent  to  the  supreme  council. 
It  was  never  received  at  the  office  of  the  supreme  council,  and 
no  certificate  was  ever  issued  to  the  member.  The  secretary 
of  the  local  council  wrote  several  times  to  the  secretary  of  the 
supreme  council,  making  inquiries  about  the  application,  but 
received  no  answer.  The  member  soon  afterward  died. 
From  the  time  of  sending  on  his  application,  he  was  treated  as 
a  beneficiary  member  by  the  local  council,  and  was  called  on 
to  pay  assessments  as  other  beneficiary  members.  He  paid 
three  assessments,  all  that  were  levied,  and  the  monev  was 
forwarded  to  the  supreme  secretary.  The  monev  was  received 
without  objection,  and  no  notification  was  ever  given  that  he 
was  not  considered  a  beneficiary  member  by  the  supreme 
council  until  after  Ins  death. 

A  by-law  of  this  society  provided  ;  "  Applicants  will  not  be 
subject  to  assessments  or  entitled  to  benefits  until  their  exami- 

1  Supreme  Lodge  v.  Martin,  12  Ins.  L.  Jour.  (Phil.  Com.  Pleas.)  628. 


27S  CERTIFICATE    OF   MEMBERSHIP. 

nations  are  approved,  but  will  become  beneficiary  members  on 
the  day  of  the  approval  by  the  medical  examiner  in  chief,  and 
they  must  be  credited  with  their  assessments  on  the  date  of 
approval,  as  above."  The  superior  court  of  San  Francisco,  in 
deciding  the  case,  said :  "  The  certificate  is  not  the  contract. 
It  is  only  the  evidence  of  it.  The  medical  examiner  in  chief 
has  no  right  to  arbitrarily  reject  an  application  made  in  good 
faith,  and  after  compliance  with  the  requirements  of  defend- 
ant. He  has  no  power  to  change  the  by-laws.  He  is  merely 
an  executive  officer,  authorized  to  see  that  applicants  are  quali- 
fied. In  this  case  it  is  conceded  that  the  applicant  was  quali- 
fied in  every  respect.  It  was  the  duty  of  the  examiner  in  chief 
to  approve  the  application.  '  That  which  ought  to  have  been 
done  is  to  be  regarded  as  done,  in  favor  of  him  to  whom  and 
against  him  from  whom  performance  is  due.'  This  is  a  favor- 
ite maxim  of  the  law."  '  While  an  acceptance  of  the  applica- 
tion must  be  signified  by  some  act  of  the  society,  there  can 
be  no  rule  laid  down  defining  just  what  act  or  acts  will  con- 
stitute such  an  acceptance.  The  facts  and  circumstances  of 
each  case  must  be  considered  in  order  to  determine  whether 
there  has  been  any  act  or  outward  expression  indicating  that 
the  minds  of  the  parties  have  met  upon  the  proposition  made 
by  the  applicant." 

Where  a  society  accepted  the  payment  of  assessments  with 
knowledge  of  the  fact  that  no  formal  application  for  member- 
ship had  been  made  by  the  person  paying  them  and  that  no 
examination  had  been  made,  as  required  by  its  laws,  it  was  es- 
topped to  dispute  his  membership.3  When  a  contract  of  in- 
surance has  been  completed  and  sent  by  mail,  a  recovery  may 
be  had  thereon  though  it  does  not  reach  the  destination  until 
after  the  death  of  the  insured.4  A  certificate  of  membership 
is  void  as  a  policy  of  insurance  if  executed  by  the  society  after 
the  death  of  the  member  and  in  ignorance  of  that  fact.6 

1  Oliver  v.  Am.  L.  of  Honor,  10  P.  3  Burlington  Relief  v.  White  (Neb.), 

C.  L.  Journal  481;  Am.  L.  Rev.,  1883,  59  N.  W.  Rep.  747. 

p.  301.  4Dailey     v.     Preferred     Masonic 

2Diboll  v.  Ins.  Co.,  32  La.  Ann.  179;  (Mich.),  57  N.  W.  Rep.  184. 

Gay  v.  Ins.   Co.,  51  Mich.  245;  Fried  5Giddings  v.  N.  W.  Mutual,  etc., 

v.  Ins.   Co.,  50  N.  Y.   243;  Faughner  102  U.  S.  108;  Insurance  Co.  v.  Ew- 

v.  Ins.    Co.,  86  Mich.  536;  49  N.  W.  ing,  92  U.   S.  377;   Insurance  Co.  v. 

Rep.  643.  Young,  90  U.  S.  152;  Markey  v.  Ins. 


CERTIFICATE    OF    MEMBERSHIP.  279 

§  139.  An  application  for  insurance,  or  an  offer  to  insure, 
sent  by  mail,  is  a  continuing  proposition  which  may  be 
accepted  by  the  other  party  within  a  reasonable  time,  before 
notice  of  withdrawal ;  and  where  the  party  to  whom  the  prop- 
osition is  made  unqualifiedly  accepts  it  by  letter,  the  contract 
becomes  complete  on  the  mailing  of  the  letter  of  acceptance.1 
In  such  case  the  contract  is  complete  without  manual  delivery 
of  the  policy.  The  unconditional  acceptance  of  an  application, 
and  the  transmission  of  a  proper  policy  to  an  agent  for  deliv- 
ery without  instructions,  are  equivalent  to  a  delivery  to  the 
member.2  "Where  a  person  made  application  for  insurance, 
and  the  application  set  out  that  the  policy  would  not  take 
effect  until  the  membership  fee  was  paid,  but  the  agent  of  the 
society  told  the  applicant  that  he  could  pay  the  fee  either  at 
that  time,  or  when  the  policy  was  delivered,  and  the  applicant 
elected  to  pay  at  the  latter  time,  but  died  before  the  policy 
was  received,  it  was  held  that  the  policy  never  took  effect,  and 
the  insurer  was  not  liable.3 

Deceasod  aoplied  for  membership  in  a  subordinate  lodge  of 
the  Knights  of  Honor,  his  proposition  fee  being  paid.  The 
medical  examiner  recommended  him  for  membership.  All 
forms  were  complied  with,  and  he  Avas  elected  a  member  by 
the  lodge,  but  died  two  days  later,  without  having  been 
initiated.  The  laws  of  the  order  required  an  applicant,  within 
a  certain  time  after  his  election,  to  present  himself  for  initia- 
tion, or  forfeit  his  election,  and  the  benefit  certificate  from  the 

Co.,  103  Mass.  92;  Ins.  Co.  v.  Kenne-  sWhitaker  v.  Ins.    Co.,   29    Barb, 

dy,  6  Bush.   450;   Ins.  Co.  v.  Willets,  (N.   Y.)  312;   Southern   Ins.    Co.    v. 

24  Mich.  208;  Misselhorn  v.  Mutual  Kempton,  56  Ga.  339;  New  England, 
Reserve,  etc.,  30  Fed.  Rep.  545;  Rog-  etc.,  Co.  v.  Robinson,  25  Ind.  537;  In- 
ers  v.  Ins.  Co.,  41  Conn.  97;  McClave  surance  Co.  v.  Colt,  20  Wall.  560- 
v.  Association.  55  N.  J.  L.  1-7.  Cooper  v.  Ins.  Co.,  7  Nev.  122;  Hei- 

'Tayloe  v.    Ins.    Co.,  50  U.  S.    (9  man  v.  Ins.  Co.,  17  Minn.  153. 

How.)  390;  Hamilton   v.  Ins.  Co.,  5  3Ormond  v.    Life  Association,    96 

Barr.  (Pa.)  339;  Mactier  v.  Frith.    6  N.  C.   158;   1   S.  E.   Rep.    796;  Wein- 

Wend.  (N.  Y.)  103;  Northampton  Ins.  feld  v.  Association,  53  fed.  Rep.  208; 

Co.  v.  Tuttle,40N.  J.  L.  103;  39  N.  J.  Kohen  v.   Association,   28  Fed.  Rep. 

L.  486;  Alabama,  etc.,  Ins.  Co.  v.  Her-  705;  Wood  v.  Ins.  Co.,  32  N.  Y.  619; 

ron.  56  Miss.  643;  Hallock  v.  Ins.  Co.,  Baker  v.  Ins.  Co.,  43  N.  Y.  884;   Mis- 

20   N.   J.    L.   278;    Shattuek    v.   Ins.  selhorn  v.  Association.  80  Fed.  Rep. 

Co.,  24  Cliff.  598;  Sheldon  v.  Ins.  Co.,  545;  Giddings  v.  Ins.  Co.,  103  U.  S. 

25  <  'nun.  207;  05  Am.  Dec.  505;  N.  E.  110. 
Ins.  Co.  v.  Robinson,  25  Ind.  536. 


2S0  CERTIFICATE    OF   MEMBERSHIP. 

supreme  lodge  was  to  be  issued  only  on  application  from  the 
subordinate  lodge,  after  the  applicant  had  received  his  degree. 
The  application  contained  an  agreement  that  the  payment  of 
the  proposition  fee  or  the  entertaining  of  the  application, 
unless  the  applicant  should  be  duly  elected  "  and  initiated," 
should  not  constitute  membership,  or  give  any  rights  of  a 
member.  It  was  only  on  the  death  of  a  "member  who  has 
obtained  the  degree  of  the  subordinate  lodge "  that  the 
supreme  lodge  could  order  payment  to  the  beneficiary.  It 
was  held  that  deceased  was  not  a  member  of  the  lodge.  The 
constitution  and  by-laws  requiring  an  applicant  for  member- 
ship to  be  initiated  in  addition  to  paying  his  proposition  fee 
and  being  elected,  before  acquiring  any  rights  as  a  member, 
are  reasonable,  and  not  contrary  to  law,  notwithstanding  the 
ceremony  of  initiation  is  secret.1  Where  the  application  states 
that  the  certificate  shall  not  be  in  force  until  it  is  actually 
delivered  to  the  applicant,  no  binding  contract  is  made  until 
the  certificate  is  delivered.  Where  a  certificate  states  on  its 
face,  that  it  shall  not  be  binding  until  it  is  delivered  to  the 
member  while  in  good  health,  it  does  not  become  binding  by 
delivery  to  the  beneficiary  after  the  death  of  the  member.2 
Where  the  contract  provided  that  it  should  not  become 
effective  until  the  first  assessment  levied  after  its  execution 
had  been  paid  by  the  member,  and  the  society  neglected  to 
give  him  notice  of  the  next  assessment  levied  by  it,  and  he 
died  eighteen  days  after  it  had  been  levied,  it  was  held  that 
the  society  could  not,  to  defeat  the  contract,  rely  on  its  failure 
to  levy  the  assessment  on  him  by  proper  notice.3 

§  HO.  It  may  be  laid  down  as  the  settled  law  in  fire  in- 
surance that  a  contract  of  insurance  is  complete  when  the 
insurer  offers  to  insure  on  certain  terms,  and  the  offer  is  ac- 
cepted by  the  applicant,  and  that  the  contract  need  not  be  in 
writing  unless  the  law  expressly  requires  it.4     These  principles 

1Matkin    v.    Supreme    Lodge,    82  Ins.  Co.,  11  Paige  Ch.  547;  Walker  v. 

Texas  301;  18  S.  W.  Rep.  306.  Ins.  Co.,  56  Me.  371;  Eames  v.  Ins. 

-  McClave  v.  Association,  55  N.  J.  L.  Co.,  94  U.  S.  621.     There  are  at  least 

187;  26  Atl.  Rep.  78.  five  essential  elements  in  a  contract  of 

3 Globe  Ins.  Co.  v.  Duffy,  76  Md.  insurance,  viz.:  the  subject-matter: 

293;  25  Atl.  Rep.  227.  the  risks  insured  against;  the  amount 

4  May  on  Insurance,  §  14-24;  Ins.  insured;  the  duration  of  the  risk,  and 

Co.  v.  Colt,  20  Wall.  5G0;   Sanford  v.  the  premium  of  insurance;  and  a  con- 


CEKTIFICATE    OF    MEMBERSHIP.  2S1 

have  been  held  to  apply  in  mutual  benefit  societies,  in  cases 
where  the  charter  and  by-laws  contain  the  whole  contract  of 
insurance,  and  where  there  is  no  provision  that  the  contract 
must  be  in  writing.1  When  an  accepted  applicant  for  member- 
ship pays  his  membership  fee,  and  promises  in  his  written  ap- 
plication to  pay  the  further  sum  of  one  dollar  and  ten  cents 
whenever  any  other  member  dies,  or  forfeit  his  claim  to  a 
benefit;  and  the  by-laws  provide  that  the  association,  within 
thirty  days  after  satisfactory  proof  of  his  death,  will  pay  to 
his  widow  as  many  dollars,  not  exceeding  one  thousand,  as 
there  are  surviving  members  at  the  time  of  the  death,  the  con- 
tract is  completed,  and  is  one  of  life  insurance.  "Where  a  cer- 
tificate stipulates  that  it  shall  not  be  in  force  until  counter- 
signed by  an  agent,  or  an  officer  of  a  subordinate  lodge,  it  is 
invalid  until  so  countersigned,  unless  this  requirement  is  waived 
by  the  society." 

§  141.  Where  executed. — Generally  speaking,  the  validity 
of  a  contract  is  to  be  decided  by  the  law  of  the  place  where 
it  is  made,  and  if  valid  or  void  there,  it  is  valid  or  void  every- 
where.3 In  Reimsdyk  v.  Kane  et  al.,4  Judge  Story  says  the  rule 
is  well  settled  "  that  the  law  of  the  place  where  a  contract  is 
made  is  to  govern  as  to  the  nature,  validity  and  construction 
of  such  contract"  unless  it  shall  appear  from  its  tenor  that  it 
was  entered  into  with  a  view  to  the  laws  of  some  other  state. 
Iluberus,  in  his  De  Conflietu  Legum,"  says:  "  The  general  rule 
is  that  contracts  are  to  be  interpreted  according  to  the  laws  of 
the  country  where  they  are  made,  but  if,  from  the  terms  or 
nature  of  the  contract,  it  appears  it  was  to  be  executed  in  a 
foreign  country,  or  that  the  parties  had  respect  to  the  laws  of 
another  country,  then  the  place  of  making  the  contract  lie- 
comes  immaterial,  and  the  obligation  must  be  tested  by  the 

tract  deficient  in  any  of  these  is  in-  tinental  Ins.  Co.  v.  Webb,  54  Ala.  688; 

complete.     Tyler  v.  Ins.  Co.,  4  Robt.  Hardie  v.  Ins.  Co.,  26  La.  Ann.  842; 

151.  Badger  v.  Ins.  Co.,  103 Mass.  344;  see 

1  Oliver  v .  A  m.  L.  of  Honor,  1 0  Par.  Norton  v.  Ins  Co. ,  36  C  >nn .  51 13;  Myers 

Coast  Journal  481;  Cooper  vi  Ins. Co..  v.  Ins.  Co.,  27  Pa.  St.  268;    Paine  v. 

7  Nev.  121;  Sheldon  v.  Ins.  Co.,  25  Ins.  Co.,  51  Fed.  Rep.  689. 

Conn.    219;    Alabama    Ins.    Co.    v.  *  There  are  a  few  exceptions  to  this 

Mayes,  61  Ala.  163;  Rhodes  v.  Ins.  rule. 

Co.,  5  Lans.  71.  41  Gallison,  374. 

-  Prall  v.  Society.  (53  N.  Y.  608:  Mc-  5  Fitch  v.  Remer.  1  Bias.  337. 

Cully  v.  Ins.  Co.,  18  W.  Va.  782;  Con-  6  Vol.  2,  book  1 ,  tit.  8. 


232  CERTIFICATE    OF   MEMBERSHIP. 

laws  of  the  country  where  the  duty  was  to  be  performed."  A 
policy  issued  from  the  office  of  a  society  in  Wisconsin  was 
held  to  have  been  executed  in  Oregon,  because  the  policy  re- 
quired that  it  should  be  countersigned  by  the  agent  in  Oregon, 
before  it  should  be  valid  and  binding.1  In  Hyde  v.  Goodnow,2 
under  the  provisions  of  the  application  and  policy,  which  con- 
tained the  stipulation  that  it  should  not  be  binding  until  the 
application  and  premium  note  were  deposited  in  the  office  of 
the  company  and  approved  by  its  directors,  it  was  held  that 
when  the  application  was  approved  and  the  policy  deposited 
in  the  mail  at  the  place  of  the  company's  office,  addressed  to 
the  defendant,  the  contract  was  then  and  there  executed,  and 
became  binding  on  the  parties  thereto.3  The  transmission  of 
a  policy  by  mail  to  the  applicant  or  to  an  agent  for  delivery 
to  an  applicant,  is  the  completion  of  the  contract  at  the  place 
where  this  act  is  performed.  A  policy  which  does  not  become 
a  binding  contract  until  its  delivery,  is  governed  by  the  laws  of 
the  state  in  which  it  was  delivered  to  the  insured  bv  an  a^ent 
of  the  company,  although  it  was  executed  and  dated  at  the 
office  of  the  company  in  another  state.4 

§  142.  Delay  of  society  in  accepting  an  application  for 
insurance  and  issuing  a  certificate. — As  has  been  heretofore 
said,6  societies  may  decide  for  themselves  whom  they  will 
admit  as  members,  and  they  may  also  determine  whether  or 
not  they  will  enter  into  contractual  relations  with  one  who 
applies  for  insurance.  An  applicant  may  have  all  the  neces- 
sary qualifications  prescribed  for  membership  in  a  society,  and 
may  perform  all  the  acts  required  to  be  performed  in  order  to 
entitle  him  to  admission  and  insurance,  and  yet  be  rejected. 

1 N.  W.  Mutual  v.   Elliot  et  al.,  5  Fed.  Eep.   902;  North  Hampton  Ins. 

Fed.  Rep.    225;  see  also  Pomeroy  v.  Co.  v.    Tuttle,  40  N.  J.  Law,    103;  39 

Insurance  Co.,   40  111.  400;  Thwing  N.  J.  L.  486;  Tayloe  v.   Ins.    Co.;   9 

v.  Insurance  Co.,  Ill  Mass.  109;  Har-  How.   390;   Adler  v.  Stoffel,  78  Wis. 

die  v.  Insurance  Co.,  26  La.  Ann:  242;  33;  46  N.  W.  Eep.  891;  Pace  v.  Pace, 

Insurance  Co.  v.  Kennedy,  6  Bush.  19  Fla.  438;  Pomeroy  v.  Ins.  Co.,  40 

450;  Giddings  v.  Ins.    Co.,  102  U.  S.  IU.  398. 

108;  Continental  Ins.  Co.   v.  Webb,  4  Knights  Templar  v.  Berry,  50  Fed. 

54  Ala.  688;  Wall  v.  Society,  32  Fed.  Rep.  511;  Assurance  Society  v.  Clem- 

Eep.  273;  Voorheisv.  Ass'n,91  Mich,  ents,    140  U.  S.  226;  11  S.   Ct.  Eep. 

469;  51  N.  W.  Eep.  1109.  822. 

23N.  Y.  269.  5§§29,  30. 

3SeeYonge  v.  Equitable  Life,  30 


CERTIFICATE    OF    MEMBERSHIP.  2S3 

And  since  he  has  no  legal  claim  upon  the  society  until  he  is 
accepted  as  a  member  and  an  insured  person,  mere  delay  in 
passing  upon  his  application  will  give  him  no  rights  and  afford 
no  presumption  of  its  acceptance.  In  one  case  it  was  said:1 
"  While  receipt  of  the  application  may  cast  a  moral  duty  upon 
the  company  to  act  promptly,  yet  delay  does  not  operate  in 
the  same  way  as  an  acceptance  of  the  application.  Suppose 
the  company  had  delayed  acting  for  a  year,  could  it  be  claimed 
that  the  policy  was  in  force?  The  proposition  which  the  ap- 
plicant made  was  for  a  policy  to  become  operative  when  the 
instrument  was  executed  and  delivered.  No  negligence,  no 
delay,  reasonable  or  unreasonable,  on  the  part  of  the  insurance 
company,  could  make  a  contract  in  face  of  the  stipulation."  : 
And  in  another  case  it  was  said  :  "  "We  are  not  aware  of  any 
authority  for  the  proposition  that  mere  delay,  mere  inaction, 
can  amount  to  an  acceptance  of  a  proposal  to  enter  into  a 
contract.  The  opposite  is  the  true  doctrine,  that  if  no  answer 
is  given  to  a  proposition  for  a  contract,  within  a  reasonable 
time,  the  proposition  is  regarded  as  withdrawn.  The  princi- 
ple is  stated  in  Hallock  v.  Conn.  Ins.  Co.3  '  A  contract  arises 
when  an  overt  act  is  done,  intended  to  signify  an  acceptance 
of  a  proposition,  whether  such  overt  act  comes  to  the  knowl- 
edge of  the  proposer  or  not,  and  unless  a  proposition  is  with- 
drawn, it  is  considered  as  pending  until  accepted  or  rejected, 
provided  the  answer  is  given  in  a  reasonable  time.'  If  the  ap- 
pellant was  dilatory  in  acting  on  the  proposal,  the  deceased 
could  have  quickened  its  diligence  by  demanding  prompt 
action;  or,  if  not  assenting  to  the  delay,  he  could  have  re- 
tracted his  proposal,  and  reclaimed  the  money  he  had  advanced 
and  his  note.  He  had  no  right,  without  an  inquiry  as  to  the 
cause,  without  any  action  on  his  part,  to  rely  on  the  supine- 
ness  of  the  appellant,  no  greater  than  his  own,  as  an  acceptance 
of  the  proposal."4 

1  Misselhorn  v.  Mutual  Reserve,  etc.,  61  Ala.  103:  see  Otterbein  v.  Ins.  Co., 

30  Fed.  Bep.  545.  5*3  Lowa  37  I:  Harp  v.  Ins.  Co.,  49  Md. 

*SeeKohcn  v.  Mutual  Reserve,  28  SOT;   Ins.  Co.    v.   Johnson,  23  Pa.  St. 

Fed.    Rep.    705;    Supreme  Lodge  v.  72;  Bentley  v.  Ins.  Co.,  17  N.  Y.  421; 

Grace,  60  Texas  569.  Flanders  on     Insurance,    108;    Titus 

36  N.   J.    L.  268;  27  N.  J.  L.  64.5;  v.  Ins.  Co.,  si    N.  y.  410;   Ins.  Co.  v. 

72  Am.  Dec.  379.  Beatty,  119  Pa.  St.  6;  12  Atl.  Rep.  007. 

4  Alabama,  etc.,  Ins.  Co.  v.  Mayes, 


2S4  CERTIFICATE    OF   MEMBERSHIP. 

In  holding  that  an  acceptance  of  the  proposition  for  insur- 
ance is  not  to  be  presumed  merely  from  the  lapse  of  about  six 
months  without  a  reply  to  the  proposition,  another  court  said  :  '■ 
"  What  is  the  true  effect  of  the  delay  ?  It  can  not  of  itself 
make  a  contract.  A  proposal  can  not  become  a  contract  by 
delay  in  rejecting  or  answering  it.  *  *  A  neglect  or 
delay  that  has  properly  a  tendency  to  mislead  another,  and 
which  is  incompatible  with  honesty,  may  be  charged  as  a 
ground  of  liability;  as  where  one  knows  that  another  is  acting 
as  his  agent  in  a  particular  matter  without  or  beyond  his 
authority,  and  does  not  promptly  disavow  his  acts.  But  in 
this  case  the  plaintiffs  had  in  their  own  hands  the  power  of 
correcting  the  delay;  for  undue  delay  in  accepting  a  proposal 
may  be  and  ought  to  be  treated  as  a  rejection  of  it,  and  the 
proposer  may  refuse  to  be  bound  by  a  tardy  acceptance.  A 
proposal  not  answered  remains  a  proposal  for  a  reasonable 
time,  and  is  then  regarded  as  withdrawn.  Both  parties  are 
interested  in  its  acceptance,  and  both  are  expected  to  attend 
to  it  with  reasonable  diligence."  When  there  is  anything  left 
open  for  future  adjustment,  either  as  to  the  amount  or 
duration  of  the  risk,  or  the  consideration  to  be  paid,  negotia- 
tions are  incomplete,  and  no  contract  or  obligation  exists.2 
Where  an  application  is  never  received,3  or  never  acted  upon, 
there  can  be  no  contract.4  Possibly  a  society  may,  under 
some  circumstances,  be  liable  for  neglect  of  its  agent  to  for- 
ward an  application  for  insurance  within  a  reasonable  time, 
but  however  that  may  be,  it  is  certain  that  it  is  not  liable  on 
a  contract  of  insurance,  but  only  in  an  action  based  upon  such 
negligence.5 

§  143.  Construction  of  the  contract. — The  provisions  of 
a  life  insurance  policy  are  construed  and  applied  like  the  terms 
of  any  other  contract:6  but,  where  they  are  vague,  ambiguous, 

insurance  Co.  v.  Johnson,  23  Pa.  Texas  569;  Armstrong  v.   Ins.    Co., 

St.  72.  61  Iowa  212;  16  N.  W.  Rep.  94;  Win- 

2Haskins  v.  Ins.  Co.,  78  Va.  700-  nesheik    Ins.    Co.  v.    Holzgrafe,    53 

'707;   Haden  v.  Association,  80    Va.  111.  516. 

683.  5  Walker  v.  Ins.  Co.,  51  Iowa  679; 

3  Atkinson  v.  Ins.  Co.,  71  Iowa  340;  2  N.  W.  Rep.  583. 

32  N.  W.  Rep.  371.  6Conn.  Mutual  v.  Pyle,  44  Oh.  St. 

4Markey  v.  Ins.  Co.,  103  Mass.  78-  19;  4  N.  East.  Rep.  465. 
92;    Supreme    Lodge    v.    Grace,    60 


CERTIFICATE    OF   MEMBERSHIP.  285 

inconsistent'or  uncertain  in  their  meaning,  that  interpretation 
will  be  given  to  them  which  is  in  favor  of  the  insured.  This 
rule  is  placed  upon  the  ground  that  limitations  upon  the  force 
of  the  principal  obligation  of  the  contract,  inserted  by  the 
insurer  in  his  own  words,  for  his  own  benefit,  must  be  clearly 
and  unequivocally  expressed.  Where,  in  a  certificate  of  mem- 
ship,  there  are  two  inconsistent  stipulations  covering  the  same 
subject-matter,  the  one  general  and  providing,  among  other 
things,  that  upon  certain  conditions,  the  policy  shall  become 
absolutely  void,  and  the  other  separate  and  distinct,  and  pro- 
viding, upon  the  very  same  conditions,  that  the  society  may, 
by  proper  steps,  avoid  the  policy,  the  latter  stipulation  will 
govern.  Thus,  a  specific  stipulation  in  a  separate  clause  of  a 
certificate  of  membership,  providing  that  if  the  assured  shall 
become  intemperate  to  a  certain  degree,  the  society  may  can- 
cel the  policy,  and  thus  absolve  itself  from  liability,  will  con- 
trol a  general  stipulation  that  such  a  degree  of  intemperance 
shall  work  an  absolute  forfeiture.1  When  a  party  uses  an 
expression  of  his  liability  having  two  meanings,  one  broader 
and  the  other  more  narrow,  and  each  equally  probable,  he  can 
not,  after  an  acceptance  by  the  other  contracting  party,  set  up 
the  narrow  construction.2  Only  a  stern  legal  necessity  will 
induce  such  a  construction  as  will  nullif}^  the  contract  of  insur- 
ance.3 

A  policy  of  life  insurance,  while  not  an  evidence  of  debt  for 
the  absolute  payment  of  money,  is  a  chose  in  action  governed 
by  the  principles  applicable  to  other  agreements  involving 
pecuniary  obligations.'  Certificates  of  membership  in  mutual 
benefit  societies  are,  in  effect,  policies  of  life  insurance,  and  in 
most  respects,  are  governed  by  the  same  rules  which  prevail 
in  policies  of  insurance/  The  certificate  and  by-laws  of  a  so- 
ciety should  be  construed  liberally,  with  a  view  to  effectuate 

■N.  W.   Mutual    v.    Hazelett,   105  National  Bank   v.  Ins.  Co.,  95  U.S. 

Ind.  212;  4  N.  East.  Rep.  582;  55  Am.  673;   Niagara  Lis.  Co.  v.  Scammon, 

Rep.  192.  Ilia  111.  644. 

"Burkhard  V.  Ins.  Co.,  102  Pa.  St.  :< Franklin  life  v.  Wallace,  93  Ind. 

262:  Breasted  v.  Farmers'  Co.,  4  Seld.  7;  Bliss  on  Life  Ins..  g  385. 

399;  Moulor  v.  Ins.  Co.,  Ill  U.  s.  885;  *  Hutson  v.  Merrifield,  51  Ind.  24. 

Hoffman  v.   Ins.  Co.,  32  N.  Y.  412;  6  Elkhart  Mutual  Aid  v.  Houghton, 

Symonds  v.  Ins.  Co.,  23  Minn.  491;  98  Ind.  149. 
Supreme  Lodge  v.  Abbott,  82  Ind.  1; 


2S6  CERTIFICATE    OF    MEMBERSHIP. 

the  contract  and  to  carry  out  the  object  of  its  organization.1 
The  stipulations  of  a  written  contract  are  not  the  less  binding 
because  made  between  a  corporation  and  one  of  its  members; 
nor  are  the  rules  of  construction  in  such  cases  different  from 
those  which  obtain  in  contracts  between  corporations  and 
strangers.  It  has  been  frequently  held  that  where  parties 
have,  by  their  own  acts,  placed  a  construction  upon  doubtful 
and  ambiguous  provisions  of  a  contract  of  insurance,  the  courts 
will  carry  that  construction  into  effect.  But  the  construction 
given  to  any  of  the  provisions  of  the  contract  of  insurance  by 
the  officers  of  the  society  is  not  binding  upon  the  courts,  and 
the  members  can  not  be  bound  by  any  acts  which  may  have 
been  done  by  them  under  such  a  construction.2  In  "Wiggin  v. 
Knights  of  Pythias,  stipra,  the  court  said :  "  These  words  of 
the  by-laws  become  part  of  the  contracts  for  life  insurance, 
and  in  the  courts  must  receive  the  ordinary  interpretation  put 
upon  the  contracts  containing  them.  *  *  These  benevolent 
associations  or  fraternities,  not  more  than  other  parties  to  con- 
tracts, can  not  be  allowed  to  construe  the  words  they  use  in 
making  agreements  otherwise  than  according  to  their  plain 
and  unambiguous  meaning  in  the  English  language  they  em- 
ploy, whether  the  words  of  the  contract  itself  or  of  the  rules 
and  regulations  which  become,  by  the  principles  they  insist  on, 
embodied  in  the  contract  as  a  part  of  it.  They  can  not  be 
permitted  to  interpret  the  contract  as  they  please,  and  become 
their  own  judges  of  what  they  mean  by  the  use  of  the  words 
employed  that  have  either  a  technical  or  well-defined  signifi- 
cation, known  of  all  men  who  use  the  language.  Legislatures 
and  parliaments  can  not  do  that,  and  even  they  are  bound  by 
the  common  meaning  of  the  words  they  use  in  their  statutes 
which  become  part  of  a  contract."  The  opinion  of  an  officer 
of  a  society,  as  to  the  interpretation  to  be  given  to  its  laws,  is 
not  admissible  in  evidence,  in  absence  of  evidence  that  he  was 
under  its  laws,  a  judicatory  for  the  purpose  of  making  such 
interpretation.3     The  law  governing  the  distribution  of  the 

1  Erdmann  v.  Mutual,  etc.,  44  Wis.        2  Manson  v.  Grand  Lodge,  30  Minn. 
376;  Covenant  Mutual  v.  Sears,  114*509;  Wiggin  v.  Knights  of  Pythias, 
111.  108;  American  Legion  v.  Perry,    31  Fed.  Rep.  122;    see  §  145. 
140  Mass.  580;  Elsey  v.  Association,       3  Davidson  v.  Supreme  Lodge,  22 
142  Mass.  224;  Ballou  v.  Gile,  50  Wis.    Mo.  App.  263. 
614;  Splawn  v.  Chew,  60  Texas  532. 


CERTIFICATE    OF   MEMBERSHIP.  2S7 

benefit  fund  is  to  be  found  in  the  constitution,  by-laws  and 
certificates  of  the  society,  but  when  a  dispute  arises  as  to  the 
interpretation  of  that  law,  the  law  of  the  domicile,  and  not  that 
of  the  place  where  the  property  may  chance  to  be,  governs 
such  interpretation. 

§  144.  Where  in  the  body  of  a  certificate  of  membership, 
reference  is  made  to  the  indorsements,  they  may  be  considered 
in  connection  with  the  policy,  in  determining  when  the  cer- 
tificate is  payable,  where  that  is  left  doubtful  in  the  body  of 
the  instrument.     Where    such    a    certificate    was    indorsed : 

"  Mutual  assurance  on  the  life  of Due  at  the  death  of 

members  $1,"  and  the  body  of  the  certificate  contained 
expressions  such  as,  "  should  the  assured  come  to  his  death  by 
the  hands  of  the  law  "  or  "  should  die  by  suicide,  or  without 
heirs  or  assigns "  only  $50  should  be  paid,  it  was  held  that, 
taking  into  consideration  these  expressions,  with  the  indorse- 
ments, the  intention  was  manifest  that  the  policy  was  to 
become  due  on  the  death  of  the  assured.1  The  by-laws  of  a 
benefit  association  provided  that,  upon  the  death  of  a  member, 
and  in  order  to  make  up  the  amount  to  be  paid  to  his  bene- 
ficiary, each  member  should  pay  one  dollar,  and  that  the  bene- 
ficiary should  be  entitled  to  receive  from  the  association  the 
amount  collected  on  the  assessment  levied  therefor.  In  con- 
struing these  by-laws,  the  court  held  that  the  beneficiary  was 
only  entitled  to  receive  the  amount  actually  collected  on  an 
assessment  made  for  his  benefit,  and  not  a  sum  equal  to  one 
dollar  from  each  member.2  In  construing  the  following  clause 
in  a  certificate  of  membership :  "  P.  N.,  having  complied  with 
the  conditions  of  membership,  is  entitled  to  the  benefit  of  said 
association,  in  the  sum  of  one  dollar  for  each  contributing 
member,"  the  court  held  that  "contributing  members."  and 
members  in  good  and  regular  standing  who  had  not  forfeited 
their  membership,  were  synonymous  and  convertible  terms.3 

1  St.  Clair  Co.  Ben.  Soc.  v.  Fietsam,  66  Md.  240;  Farmers'  Mutual  v.  Sny- 

Adin'r.    97   111.  474;    see    Hygura  v.  der,  16  Wend.  481;  Ferrer  v.  Ins.  Co., 

./Etna  Ins.  Co.,  11  Iowa  21 ;  Wright  v.  47  Cal.  416;  Kingsley  v.  Ins.  Co.,  8 

Mutual  Benefit  Association,  43  Hun  Cush.  393. 

(N.  Y.)61.  The  indorsement  was  held  iIn  re    La    Solidarite    Mut.    Ben. 

not  to  be  a  part  of  the  policy  in  Ailni'rs  Ass'n,  68  Cal.  392. 

of  Stone  v.  Casualty  Co.,  34  N.  J.  L.  3Neskern  v.N.  W.  Assn,  30  Minn. 

371;  see  Bassell  v.  Ins.  Co., 2  Hughes  406. 
531;    Planter's    Ins.  Co.  v.  Rowland, 


288  CERTIFICATE    OF    MEMBERSHIP. 

A  provision  in  a  certificate  that  "  no  question  as  to  the  validity 
of  an  application  or  certificate  of  membership  shall  be  raised, 
unless  such  question  be  raised  within  the  first  two  years  from 
and  after  the  date  of  such  certificate  of  membership,  and 
durino-  the  life  of  the  member  therein  named,"  embraces  the 
defense  of  fraud  of  the  insured  and  beneficiary  in  obtaining 
the  certificate.1  Provisions  of  the  constitution  and  by-laws  of 
a  societ}^,  allowing  benefits  "  in  case  of  sickness,"  and  providing 
that  when  "  any  member  takes  sick,"  he  shall  be  entitled  to 
benefits,  "  if  it  be  so  that  he  is  not  able  to  attend  to  his  daily 
labor,"  do  not  extend  to  a  case  of  permanent  bodily  injury, 
which  does  not  affect  the  general  health  of  the  person  injured.2 
A  member  of  such  a  society  had  his  thigh  bone  broken,  which 
caused  a  shortening  of  the  leg  and  the  eversion  of  the  foot. 
For  twenty-six  weeks  the  society  paid  him  his  allowance  of 
85  per  week,  and  at  the  expiration  of  that  time,  to  wit,  on 
October  8,  1877,  refused  to  pay  him  any  further  weekly  allow- 
ances. For  about  sixteen  months  he  was  able  to  do  very  little 
work,  and  could  not  perform  the  duties  of  a  coachman,  as  he 
had  done  for  years  prior  to  his  injury.  On  February  11, 
1870,  he  brought  suit  for  weekly  benefits  from  October  8, 1877. 
The  court  held  that  he  was  not  entitled  to  weekly  benefits 
under  the  constitution  and  by-laws,  as  the  incapacity  to  work, 
because  of  the  effect  of  the  injury,  was  not  a  sickness  within 
their  meaning.3  Insanity  has  always  been  regarded  as  a  dis- 
ease, and  comes  strictly  within  the  meaning  of  the  term  "  sick- 
ness." Where,  therefore,  by  the  laws  of  a  society,  benefits  are 
promised  on  account  of  sickness,  a  member  who  has  become 
insane  is  entitled  to  sick  benefits.4 

A  certificate  provided  for  the  payment  of  five  hundred  dol- 
lars on  the  death  of  the  member,  and  printed  under  this  agree- 
ment was  the  following :  "  One-fourth  only  of  the  above  sum 
payable  if  death  occur  after  three  calendar  months  and  within 
six  calendar  months,  from  date;  one-half  only  of  the  above 
sum  payable  if  death  occur  after  six  calendar  months  and 
within  one  year;  and  the  full  amount  only  if  death  occur  after 

1  Wright  v.  Association,  118  N.  Y.  4McCullough  v.  Association,  133 
237;  23  N.  E.  Rep.  186;  affirming  43  Pa.  St.  142;  19  Atl.  Rep.  355;  Pel- 
Hun  61.  lazzinio   v.  Society,    16    Cm.     Law 

* Kelley  v.  A.  O.  H.,  9  Daly  289.  Bull.  27;  Burton  v.  Eyden,  L.  R.,  S  Q. 

"Kelley  v.  A.  O.  H.,  stipra.  B.  295. 


CERTIFICATE    OF    MEMBERSHIP.  280 

one  year,  except  in  case  of  consumption,  when  but  one-half 
the  amount  which  would  otherwise  be  due  would  be  payable 
if  death  occur  during  the  first  }rear.  No  benefits  will  be  due 
or  payable  if  death  occur  within  three  calendar  months  from 
date."  A  member  whose  life  was  insured  May  4,  1885,  died 
July  2,  1885.  In  a  suit  on  the  policy  the  court  said  :  "  It  is 
contended  on  the  part  of  the  plaintiff  that  the  policy  is  for  $5<  M I 
and  that  that  amount  is  not  qualified  by  the  provision  quoted, 
and  in  the  second  place  that  the  provision  is  repugnant  to  the 
main  body  of  the  policy.  It  is  quite  true  that  the  policy  is 
for  8500,  but  it  is  equally  true  that  the  $500  written  in  the 
policy  precedes  and  is  in  connection  with  the  conditions  to  the 
effect  that  one-fourth  only  is  payable  if  death  occur  after  three 
months  and  within  six  months,  and  that  no  benefits  will  be 
due  or  payable  if  death  occur  within  three  months.  These 
provisions  are  clear  and  distinct  and  are  not  ambiguous  in 
meaning,  and  the  court  has  no  power  to  strike  them  out  or  to 
separate  them  from  the  other  provisions  of  the  contract,  and 
then  compel  the  pirties  to  execute  it,  for  by  doing  so  it 
would  be  making  a  contract  for  the  parties  different  from  that 
which  they  had  made  for  themselves.  Nor  do  we  understand 
these  provisions  to  be  repugnant  to  or  inconsistent  with  the 
other  provisions  of  the  policy." '  Where  the  by-laws  of  a  so- 
ciety provide  funeral  benefits  for  such  deceased  members  only 
as  were  entitled  to  sick  benefits,  and  deny  sick  benefits  to 
members  thirteen  weeks  in  arrear,  when  taken  sick,  a  mem- 
ber who  is  thirteen  weeks  in  arrear  when  taken  sick  can  nor 
acquire,  by  payment  of  arrears,  a  right  to  a  funeral  benefit, 
although  claiming  no  sick  benefit.2  In  a  society  there  were 
two  kinds  of  benefits,  sick  benefits  payable  to  the  member  and 
mortuary  benefits  payable  to  the  beneficiary  of  the  contract  of 
insurance.  A  by-law  provided  that  when  a  member  had  been 
delinquent  for  three  months  and  was  restored  to  membership 
by  paying  his  past  dues,  he  should  "not  be  entitled  to  benefits 
for  one  month  thereafter."  The  word  u  benefits,"  it  was  hel<L 
referred  to  sick  benefits  and  not  to  those  payable  at  his  death  to 
the  beneficiary  of  his  insurance.'     Where  the  by-laws  provide 

1  Bruton  v.  Ins.  Co.,  48  Hun  204.  3  Connelly  v.  Society,  43  Mo.  A  pp. 

-  Frey  v.  Fidelity  Lodge,  6  Pa.  St.  283;  Weiaa  v.  Tennant,  81  X.  Y.  Supp. 

435.  252. 
19 


290  CERTIFICATE    OF     MEMBERSHIP. 

that  default  in  making  payments  during  illness  shall  not  work 
a  forfeiture,  and  default  is  made  during  the  last  illness  of  a 
member,  his  beneficiary  may  recover.1  Provisions  in  the  by- 
laws that  a  person  obtaining  membership  by  false  statements 
as  to  his  age  shall  be  expelled  and  forfeit  all  benefits,  relate 
to  proceedings  which  may  be  taken  during  his  lifetime,  and 
do  not  prevent  the  beneficiary  from  recovering  after  his  death.2 
As  the  contract  of  mutual  benefit  insurance  is  between  the 
society  and  the  member,  it  would  seem  at  first  impression  that 
a  minor  might  not  be  admitted  into  membership  and  its  con- 
tractual relations,  unless  the  organic  law  of  the  society 
expressly  authorized  minors  to  become  members.  But  such  a 
contract,  in  the  absence  of  express  stipulations  to  the  contrary, 
is  purely  unilateral,  binding  upon  the  society  so  long  as  the 
member  performs  the  prescribed  conditions,  but  not  enforceable 
against  him ; 3  and  if  the  statute  under  which  the  societv  is 
organized  is  silent  on  the  subject,  a  minor  may  be  admitted  to 
membership.4 

§  145.  Construction  given  to  the  terms  of  the  contract 
hy  the  society. — A  society  can  not,  because  the  insured  is 
one  of  its  members,  assume  the  right  to  construe  the  terms  of 
its  contract  with  him,  but  those  terms  as  construed  by  the 
courts  of  the  land,  must  determine  the  rights  and  duties  of  the 
parties  to  the  contract.  A  decision  of  the  officers  of  a  society 
respecting  the  construction  to  be  given  to  certain  terms  of  a 
contract,  and  a  custom  which  has  arisen  under  such  decision, 
are  not  binding  on  members.6  But  where  the  officers  of  a 
society  assume  to  construe  certain  provisions  of  the  contract, 
and  publish  among  its  members  a  decision  giving  to  them  a 
construction  more  favorable  to  the  members  than  courts  would 
have  given,  courts  will  hold  the  society  to  the  construction 
given  by  its  officers  on  the  ground  that  it  is  a  declaration 
against  its  interests,  and  on  the  ground  of  estoppel.     Where 

1  Grand  Lodge  v.  Brand,  29  Neb.  Globe  Mutual,  135  N.  Y.  280;  32  N. 
644;  46  N.  W.  Rep.  95.  East.  Rep.  122,  where  it  is  held  that  a 

2  Supreme   Council  v.    Boyle  (Ind.  minor  may  not  become  a  member. 
App.),  37  N.  East.  Rep.  1105.  5  Manson  v.  Grand  Lodge,  30  Minn. 

3§§  248,  249.  509;  Wiggin  v.  Knights,  31  Fed.  Rep. 

4 Chicago  Mutual  v.  Hunt,  127  111.  122;  Davidson  v.  Supreme  Lodge,  22 

257;  20  N.  East.  Rep.   55.     This  case  Mo.  App.  263;  see§  143. 
is  quoted  from  at  §  119.    See  In  re 


CERTIFICATE   OF   MEMBERSHIP.  291 

the  supreme  body  of  a  society,  which  is  its  legislative  and 
judicial  authority,  publishes  from  its  journal,  for  the  informa- 
tion and  guidance  of  its  members,  a  decision  holding  that  a 
certain  contract  of  insurance  was  not  forfeited  for  non-pay- 
ment of  certain  dues  and  assessments,  it  is  estopped  to  deny 
that  the  decision  is  of  binding  force  in  other  similar  cases. 
The  decision  must  be  held  to  prevent  a  forfeiture  in  a  similar 
and  subsequent  case  on  the  ground  that  it  was  a  public  and 
solemn  declaration  of  the  society,  which  would  lead  a  member 
nonestly  to  believe  that  he  was  complying  with  all  the  require- 
ments necessary  to  keep  his  certificate  in  force,  thus  operating 
by  way  of  estoppel.  In  such  a  case,  the  decision  is  a  rule, 
established  by  competent  authority,  of  equal  validity  with  the 
terms  of  the  constitution  or  by-laws,  which  it  construes  or 
modifies.' 

§  146.  Construction  of  application  and  certificate — 
"Variance. — The  general  rule  as  to  policies  of  life  insurance  is 
that  when  a  policy  expressly  designates  the  person  who  is  to 
receive  the  insurance  momrv,  it  is  conclusive  upon  that  subject. 
In  mutual  benefit  insurance  this  simple  rule  may  be  modified 
and  complicated  in  various  ways.  The  member  whose  life  is 
insured  by  a  society  may  attempt  to  assign  his  certificate  or  to 
change  his  beneficiary,  and  these  subjects  will  be  treated  of 
later.  He  may  have  designated  in  his  application  for  insur- 
ance certain  persons  or  a  class  of  persons  to  receive  the  benefit 
fund,  and  the  contract  of  insurance  issued  to  him  may  not 
have  followed  accurately  the  direction  given  in  his  application. 
It  is  this  variance  between  the  direction  as  to  the  beneficiary 
given  by  the  member  in  his  application  and  the  designation  of 
the  beneficiary  in  the  certificate  issued  to  him  which  will 
now  be  discussed.  One  aspect  of  the  question  is  that  the  ap- 
plication for  insurance  must  be  viewed  as  any  other  proposi- 
tion to  enter  into  a  contract.  If  it  is  accepted  as  made,  the 
minds  of  the  parties  have  met.  If  the  certificate  does  not 
name  the  beneficiary  or  beneficiaries  just  as  they  are  stated 
in  the  application,  the  member  need  not  accept  it;  but  if  he 
accepts  it  and  acts  upon  it,  it  will  be  presumed  that  he  acqui- 
esced in  the  change  as  made  in  the  certificate  and  waived  the 

1  Supreme  Lodge  v.  Kalinski,  57  Fed.  Rep.  348. 


292  CERTIFICATE   OF   MEMBERSHIP. 

direction  given  in  the  application.  A  widower,  with  four 
children,  applied  for  insurance,  and  in  his  application  directed 
that  his  certificate  be  made  payable  to  the  children,  naming 
them.  The  certificate  issued  to  him  was  made  payable  at  his 
death  "to  his  children."  He  afterward  married,  and  died 
leaving  another  child  by  his  last  wife.  It  was  held  that  his 
five  children  were  the  proper  beneficiaries  under  the  contract.1 
A  member  who  had  been  twice  married,  and  had  children 
by  each  wife,  directed  in  his  application  that  the  fund 
should  be  payable  to  his  second  "  wife,  and  her  children,"  but 
the  certificate  issued  to  him  provided  that  the  fund  should  be 
payable  to  "  his  wife  (J.  E.  S.)  and  children,  his  heirs."  The 
court  held  that  the  certificate  controlled  and  that  the  fund 
belonged  to  the  wife  and  all  the  children  of  the  member.2  An 
applicant  for  insurance  directed  that  his  policy  be  made  paya- 
ble to  his  wife,  "for  herself  and  children,"  but  he  took,  with- 
out objection,  a  policy  designating  as  his  beneficiary  his  wife, 
"  her  personal  representatives  and  assigns,"  and  regularly  paid 
the  premiums.  It  Avas  held  that  the  policy  modified  the  ap- 
plication, and  that  the  beneficiaries  under  the  policy  were 
entitled  to  the  fund.3 

If  it  be  held  that  the  acceptance  of  a  certificate  by  a  member 
shows  that  he  waived  any  variance  between  it  and  his  applica- 
tion in  the  designation  of  his  beneficiary,  a  plain  and  simple 
rule  is  laid  down  for  determining  the  rights  of  the  parties 
under  the  contract. 

But  the  presumption  that  the  certificate  states  correctly  the 
beneficiary  of  the  insurance,  is  met  by  the  well  settled  rule 
that  the  certificate  and  application  must  be  construed  together, 
and  that  the  language  of  the  application  may  limit  and  con- 
trol the  terms  of  the  certificate.  This  rule  of  construction  is 
an  element  of  great  uncertainty  in  the  law,  and  no  one  can 
tell  how  it  will  be  applied  in  a  particular  case  until  the  court 
of  last  resort  has  passed  upon  it.  By  a  clause  of  a  certificate 
the  application  was  expressly  made  a  part  of  the  contract.  In 
the  application  there  was  the  question,  "  For  whose  benefit  is 
this  contract   made  ?  (give  relationship  of  beneficiaries,  and 

1  Thomas  v.  Leake,  67  Texas  469;  3  3  Hunter  v.  Scott,  108  N.  C.  213; 
S.  W.  Rep.  703;  see  §  187.  12  S.  E.  Rep.  1027;   see  Carraher  v. 

2  Grand  Lodge  v.  Sater,  44  Mo.  App.  Ins.  Co.,  11  N.  Y.  St.  Reporter,  6G5. 
445. 


CERTIFICATE    OF   MEMBERSHIP.  293 

full  name),"  and  the  answer,  "myself."  The  law  permitted 
the  insurance  to  be  made  for  the  benefit  of  any  one  who  had 
an  insurable  interest  in  the  life  of  the  member.  The  fund  was 
paid  to  the  executor  of  the  deceased  member,  and  was  claimed 
by  him  as  a  part  of  the  general  estate,  and  by  the  heirs  of  the 
decedent.  The  claim  of  the  heirs  was  founded  upon  the  words  of 
the  certificate  in  the  printed  blank,  where  the  society  agreed  to 
pay  "  to  the  executors  or  administrators  of  said  member,  in 
trust,  however,  for,  and  to  be  forthwith  paid  over  to  his  heirs 
at  law."  In  passing  upon  the  proper  construction  to  be  given 
to  the  contract  the  court  said  :  "  The  chief  purpose  of  this  lan- 
guage is  to  state  the  undertaking  of  the  corporation,  and  that 
is  fully  accomplished  before  the  words  'in  trust '  are  reached. 
The  final  clause  is  a  statement  of  the  existence  of  a  trust  which 
is  supposed  to  have  been  created  by  the  designation  of  the  in- 
sured in  his  application.  In  the  present  case  these  words  are 
in  direct  conflict  with  the  statement  of  ownership  in  the  writ- 
ten portion  of  the  contract,  and  it  seems,  likely  that  they  were 
inadvertently  left  in  the  printed  blank.  In  the  absence  of 
anything  else  to  show  an  intention  to  make  his  heirs  benefi- 
ciaries, we  are  of  opinion  that  the  words  referring  to  a  trust 
must  yield  to  the  language  of  the  application,  and  that  the  pro- 
ceeds of  the  policy  must  be  administered  as  a  part  of  the  estate 
of  the  insured,  under  his  will."  '  A  member  in  his  application 
to  be  transferred  to  another  class  in  the  order,  named  his  wife, 
or,  in  case  of  her  death,  his  son,  as  beneficiary.  By  a  provision 
in  the  certificate  issued  thereon,  the  application  was  made  a 
part  of  the  contract  between  the  member  and  the  society." 
The  certificate,  as  issued,  only  contained  the  name  of  his  wife 
as  beneficiary.  It  was  held  that  the  application  controlled, 
and  that,  upon  the  death  of  the  wife,  the  son  became  the  bene- 
ficiary. The  fact  that  the  member  accepted  and  kept  the  cer- 
tificate without  objection,  did  not  imply  that  he  assented  to 
the  designation  of  his  wife  alone  as   his  beneficiar}^.     Mere 

'Harding  v.  Littlehale.  150  Mass.  tificate  does  not  refer  to  the  applica- 

100;  22  N.  East.  Rep.   70S;  see  Addi-  tion.    N.  W.  Association  v.    Bloom, 

6on  v.  Association,  144  Mass.  591;  12  21  111.  App.  159;  Stacy  v.  Randall,  IT 

N.  East.  Rep.  407.  111.  467;  N.  W.  Association  v.  Hand, 

4  The  application  and  certificate  are  29  111.  App.  73. 
one  instrument  even  though  the  cer- 


291  CERTIFICATE    OF    MEMBERSHIP. 

silence  on  his  part  is  not  enough  to  set  aside  the  designation 
expressly  made  by  him  in  the  contract.1 

§  147.  When  the  terms  of  a  certificate  are  inconsistent 
with  the  terms  of  a  by-law. — It  is,  undoubtedly,  the  general 
rule  that  a  member  of  a  society  must  take  notice  of,  and  is 
bound  by  its  articles  of  association  and  bydaws,  although  they 
are  not  recited  or  referred  to  in  his  certificate  of  membership.2 
But  where  the  terms  of  a  by-law  and  the  terms  of  a  certifi- 
cate, while  consistent  with  the  charter,  are  inconsistent  with 
each  other,  it  must  be  held  that  the  society  has  waived  the 
provisions  of  the  by-law  in  favor  of  the  assured,  and  wherein 
they  are  inconsistent  with  the  provisions  of  the  certificate, 
the  latter  will  control  the  rights  and  liabilities  of  the  parties. 
A  certificate  provided  that  any  member  who  had  forfeited  his 
contract  of  insurance  might  be  again  restored,  at  any  time 
within  six  months,  by  furnishing  proofs,  of  good  health,  and 
paying  the  full  amount  of  arrears.  A  by-law  provided  that, 
if  the  death  of  the  member  should  occur  within  sixty  days 
from  and  after  the  date  of  reinstatement,  the  society  should 
be  liable  to  the  beneficiary  only  for  the  amount  actually  paid 
to  the  society  by  the  member  on  assessments.  According  to 
the  terms  of  the  certificate,  the  beneficiary  was  entitled  to 
$1,500,  but,  under  the  by-law,  to  only  $168.78,  the  member 
having  died  within  sixty  days  after  date  of  his  reinstatement. 
The  court  affirmed  a  judgment  for  $1,500.3  A  provision  in  a 
certificate,  evidently  contemplating  a  mortuary  assessment  to 
meet  each  death  loss,  will  prevail  over  a  clause  of  the  by-laws, 
tending  to  limit  the  number  and  amount  of  the  assessments  to 
be  levied,  and  inconsistent  with  the  provision,  even  though 
the  by-laws,  are,  by  the  terms  of  the  certificate,  a  part  of  the 
contract.4  A  certificate  stated  that  the  beneficiary  would  be 
entitled  to  receive  the  proceeds  of  one  full  assessment,  upon 
the  death  of  the  member.  Afterward,  by  a  by-law,  the  society 
provided  that  beneficiaries  should  only  receive  five-sixths  of 
that  amount.  Subsequent  to  this  amendment  of  the  by-laws 
the  member  died,  and  the  court  held  that  the  beneficiary  was 
entitled  to  receive  the  proceeds  of  one  full  assessment.6 

'Ecklerv.  Terry,   95  Mich.  123;  54  4  Fitzgerald  v.  Equitable  Reserve, 

N.  W.  Rep.  704.  3  N.  Y.  Supp.  214. 

2  See  §  136.  BStowell  v.  American  Association, 

3  Davidson  v.  Old  People's  Soc,  39  23  N.  Y.  St.  Rep.  706;   see  §  97.    Mer- 
Minn.  303;  39  N.  W.  Rep.  803.  win,  J.,  dissenting.     The  court  gave 


CERTIFICATE    OF    MEMBERSHIP.  205 

§  148.  By  whom  certificates  must  he  signed. — Certifi- 
cates of  membership  in  mutual  benefit  societies  are  usually 
issued  by  the  central  or  governing  body  which  is  incorporated 
under  the  laws  of  some  state.  They  must  be  signed  by  the  ad- 
ministrative officers  of  the  corporation,  such  as  the  presi- 
dent and  secretary,  with  the  corporate  seal.  It  is,  of  course, 
competent  for  these  certificates  to  provide  that  they  shall  not 
be  in  force  until  signed  by  the  officers  of  the  subordinate 
lodge  to  which  the  member  belongs,  but  unless  such  a  pro- 
vision is  contained  in  the  contract  of  insurance,  it  is  not  neces- 
sary for  the  officers  of  such  lodge  to  sign  them.1 

§  149.  Delivery  of  certificate  to  beneficiary  not  neces- 
sary.— When  a  member  of  a  society  has  appointed  a  bene- 
ficiary in  any  of  the  modes  pointed  out  in  the  contract  of  in- 
surance, it  is  not  necessary  that  the  certificate  of  membership 
should  be  delivered  to  the  beneficiary  so  named.  The  claim 
of  the  beneficiary,  in  such  a  case,  is  not  based  on  a  contract, 
but  upon  the  appointment  and  direction  for  the  payment  of 
the  fund. 

Where  the  benefit  certificate  of  a  member  was  made  paya- 
ble at  his  death  to  such  person  as  he  should  direct  on  the  face 
of  the  certificate,  and  the  member  on  the  face  of  the  certifi- 
cate, directed  that  the  benefit  fund  should  be  paid  to  a  certain 
person,  and  retained  possession  of  the  certificate  until  his  death, 
it  was  held  that  the  beneficiary  so  designated  took  the  fund 
by  appointment,  and  that  no  delivery  of  the  certificate  in  the 
lifetime  of  the  member  was  necessary.2 

§  150.  The  contract  must  be  accepted  by  the  beneficiary 
in  its  entirety.— A  person  asserting  a  claim  under  a  contract 
of  insurance,  is  charged  with  notice  of  its  contents,  and  must 

no  reasons  for  its  decision,  and   it  countersigned.     Prall    v.    Society,  5 

dors  not  appear,  from  the  opinion  in  Daly,  298;  03  N.  Y.  608;  Noyes  v.  Ins. 

the  case,  whether  the  member  con-  Co.,  1  Mo.  App.  584;  Continental  Ins. 

sented  that  the  change  in  the  by-law  Co-  v.  Webb,  54  Ala.  688;   Bardie  v. 

Bhould   affect  his  contract  of  insur-  Ins.  Co.,  26  La.  Ann.  242:  Badger  v. 

ance.    See  Durian  v.  Central  Verein,  Ins.  Co.,  103  Mass.  244:  but  see  Norton 

7  Daly  168  at  §  136;  see  §£  26,  97.  v.  Ins.    Co.,    36  Conn.  503;  Myers  v. 

1  Fiskv.  Equitable  Aid  Union,  116  Ins.  Co.,  27  Pa.  St.  268;  Kautrener  v. 

Pa.  St.  (not  reported);  11  Atl.  Rep.  84;  Ins.  Co.,  5  Mo.  App.  581. 
9  Cent.  Rep.  403.   When  the  contract      'Highland  v.  Highland,    109    111. 

so  provides,  the  certificate  must  be  366;  13  111.  App.  510;  see  g  173. 


296  CERTIFICATE    OF   MEMBERSHIP. 

accept  the  contract  as  a  whole.  He  may  not  claim  benefits 
under  it,  and  repudiate  a  part  of  it.  Where  a  husband  had  a 
certificate  for  one  thousand  dollars,  payable  to  his  wife,  and 
afterward,  for  the  purpose  of  increasing  his  insurance  to  three 
thousand  dollars,  took  a  certificate  for  that  amount  which 
showed  upon  its  face  that  it  was  taken  to  increase  his  former 
insurance  to  that  amount  and  not  to  secure  three  thousand 
dollars  of  additional  insurance,  it  was  held  that  as  soon  as  she 
asserted  a  claim  under  the  second  certificate  she  became 
charged  with  notice  of  its  contents,  and  by  accepting  its  bene- 
fits consented  that  it  should  have  the  intended  effect.'  The 
beneficiary  can  not  be  heard  to  assert,  in  an  action  to  re- 
cover the  amount  of  the  certificate,  that  the  provision  in  the 
certificate  that  death  must  happen  within  ninety  days  after 
the  accident  is  not  authorized  by  defendant's  constitution.  She 
can  not  thus  accept  one  part  of  the  contract  and  reject  another.2 
But  this  rule  applies  only  to  such  provisions  as  are  legal,  for 
a  beneficiary  may  urge  that  a  particular  clause  in  the  contract 
is  against  public  policy,  against  the  statute  law  of  the  state, 
or  contrary  to  the  express  provisions  of  the  charter  of  the 
society.3 

§  151.  Certificates  are  valued  policies  of  insurance. — 
Contracts  of  fire  and  marine  insurance  indemnify  against  a 
pecuniary  loss  and  their  terms  are  to  pay  whatever  is  lost,  not 
exceeding  a  specified  amount.  In  this  respect  they  differ  from 
life  insurance  contracts.  A  contract  of  fire  or  marine  insurance 
is  called  an  indemnifying  policy,  while  a  contract  of  life 
insurance  is  called  a  valued  policy.  The  latter  is  an  agree- 
ment to  pay  a  certain  definite  sum  on  the  happening  of  a 
particular  event  which  may  or  may  not  occasion  a  pecuniary 
loss.  It  does  not  estimate  the  value  of  the  subject  insured 
merely,  but  it  values  the  loss,  and  is  equivalent  to  an  adjust- 
ment of  the  loss  and  an  assessment  of  damages  at  a  certain 
specified   sum.4     A  certificate   of    membership  in    a    mutual 

1  Wheeler  v.  Odd  Fellows'  Ass'n,  10  Abb.  N.  C.  252;  Austin  v.  Searin- 
44  Minn.  513;  47  N.  W.  Rep.  149.  16  N.  Y.  112-123;  Strasser  v.  Staats, 

2  Palmer  v.  Commercial  Travelers'  13  N.  Y.  Supp.  167;  Greene  v.  Wal- 
Mut.  Ace.  Ass'n,  6  N.  Y.  S.  870.  ton,  13  N.  Y.  Supp.  147. 

3  Bauer  v.  Sampson  Lodge,  102  Ind.  4Chisholmv.  Ins.  Co.,  52  Mo.  213, 
262;  Supreme  Council  v.  Garrigus,  215;  14  Am.  Eep.  414;  Lycoming 
104  Ind.  133;  Poultney  v.  Bachman,  Ins.  Co.  v.  Mitchell,  48  Pa.  St.  372; 


CERTIFICATE    OF    MEMBERSHIP.  297 

benefit  society  falls  within  this  definition,  and  is  a  valued 
policy.  It  takes  no  note  of  the  pecuniary  value  of  the  subject 
insured,  and  agrees  to  pay  a  certain  sum,  or  one  which  may 
be  rendered  certain,  on  the  happening  of  a  certain  event. 
The  fact  that  the  exact  sum  which  will  be  paid  on  the  certifi- 
cate is  uncertain,  and  is  dependent  upon  the  amount  which 
may  be  derived  from  an  assessment  on  the  members  of  the 
society,  does  not  change  the  character  of  the  contract.1  Every 
policy  or  certificate  of  insurance,  however,  is  not  to  be  regarded 
as  valued,  so  as  to  entitle  the  beneficiary  to  the  sum  named  in 
it  at  all  events.  Where  a  debtor  insures  his  life  for  the  benefit 
of  his  creditor,  the  contract  is  one  of  indemnity. 

§152.  Reformation  of  certificate — Mistake. — A  court  of 
equity  has  jurisdiction  to  correct  mistakes  in  policies  of  insur- 
ance, as  well  as  in  all  other  written  instruments,  and  in  mak- 
ing such  corrections  it  will  be  governed  by  the  same  princi- 
ples which  control  in  the  correction  of  ordinary  contracts.  It 
will  be  presumed  that  the  contract  as  written  expresses  the 
will  of  the  parties,  and  to  justify  the  court  in  changing  its 
language  and  reforming  it  on  the  ground  of  mistake,  it  must 
be  established,  that  both  parties  agreed  to  something  different 
from  what  is  expressed  in  the  writing.  The  proof  upon  this 
point  should  be  so  clear  and  convincing  as  to  leave  no  room 
for  doubt.2 

Miller  v.  Ins.  Co.,  2  E.  D.  Smith  (N.  Maher  v.  Ins.  Co.,  67  N.  Y.  283; 
Y.)  268.  Clark  v.  Roots.  50  Ark.  179:  6  S.  W. 

1  Eockhold  v.  Benevolent  Society,  Rep.  70S;  Frederick  v.  Henderson, 
129  111.440;  21  N.  East.  Rep.  794.  94  Mo.  98;  7  S.  W.    Rep.  186;  Rous- 

2 Harrison  v.  Ins.  Co.,  30  Fed.  Rep.  Beau  v.  Lambert  (Ky.j,  7  S.  W.  Rep. 
86-2;  Mead  v.  Ins.  Co.,  64  N.  Y.  455;  923;  Susquehanna  Mutual  v.  Swank, 
Tesson  v.  Ins. Co.,  40  Mo.  33;  Guern-  lOi  Pa.  St.  17;  Cooper  v.  Ins.  Co.,  50 
sey  v.  Ins.  Co.,17  Minn.  104;  Fritzler  Pa.  St.'  299;  88  Am.  Dec.  •",  || ; 
v.  Robinson,  70  Iowa  500;  31  N.  W.  National  Ins.  Co.  v.  Crane,  16  Ml. 
Rep.  61;  James  v.  Cutler,  54  Wis.  260;  Bartholomew  v.  Ins.  Co.,  34 
172;  in  X.  w.  Rep.  147;  St.  Anthonj  Hun  263;  Durham  v.  Ins.  Co.,  22 
Co.  v.  Merriman,  :i">  Minn.  12;  27  X.  Fed. Rep. 468; Thompson, Receiver,  v. 
W.  Rep.  199;  Rawson  v.  Lyons,  23  Ins.  Co.,  186  U.  S.  387;  10  Sup.  Ct. 
Fed.  Rep.  107:  Griswold  v.  Bazard,  Rep.  1019.  Relief  will  not  be  denied, 
~*"»  Fed.  Rep.  185;  Ahlborn  v.  Wolff,  simply  because  there  is  a  conflict  in 
118  Pa.  St.  24:2;  11  Atl.  Rep.  799;  the  evidence  upon  the  question  of  a 
Cummins  v.  Monteith,  61  Iowa  .ill:  mistake,  if  the  mistake  is  established 
16  N.  W.  Rep.  591;  Nelson  v.  Davis,  in  a  clear  and  convincing  manner. 
40  Ind.  366;  1  Story's  Eq.,  Sec.  155;   Hutchinson   v.   Ainsworth,    ?:!    Cal. 


29S  CERTIFICATE    OF   MEMBERSHIP. 

As  a  general  rule,  a  mistake  must  be  mutual  to  be  reformed, 
but  when  persons  are  dealing  together,  and  have  entered  into 
a  contract,  and,  in  reducing  the  contract  to  writing,  or  execut- 
ing or  performing  the  same,  one  person  makes  a  mistake 
which  is  known  to  the  other,  it  is  the  duty  of  the  person  hav- 
ing knowledge  of  the  mistake  to  inform  the  other  at  the  time, 
and  this  is  true  regardless  of  whom  the  mistake  favors.  Thus 
a  member  paid  two  dollars  to  a  society  entitling  him  to  a  cer- 
tificate for  one  thousand  dollars,  but  the  society  issued  a  cer- 
tificate for  two  thousand  dollars  instead  of  one  thousand, 
which  the  member  had  contracted  for  and  directed  to  be  issued 
to  him.  When  the  member  received  the  certificate,  he  either 
accepted  it  by  mistake,  believing  it  to  be  for  one  thousand 
dollars,  or  he  knew  of  the  mistake  on  the  part  of  the  society 
and  with  such  knowledge  recaived  and  kept  the  certificate. 
In  either  event  the  society  was  entitled  to  a  reformation  of  it.1 
"When  an  agreement  has  been  satisfactorily  established,  if  it 
appears  that  a  mistake  in  reducing  it  to  writing  was  known  to 
one  of  the  parties,  who,  with  knowledge  of  the  ignorance  of  the 

452;  15Pac.  Rep.  82.  A  bill  inequity  Goldsmith  v.  Ins.  Co.,  18  Abb.  N.  C. 
to  reform  a  written  instrument  will  325;  Ben  Franklin  Ins.  Co.  v.  Gillett, 
not  lie  where  the  only  evidence  of  a  54  Md.  212;  Franklin  Ins.  Co.  v. 
mutual  mistake  is  that  complainants,  Martin,  40  N.  J.  Eq.  574;  Ins.  Co.  v. 
being  unable  to  understand  English,  Wilkinson,  13  Wall.  222.  Compare 
relied  upon  statements  of  the  defend-  Parsons  v.  Bignold,  13  Simon's  Ch. 
ants, which  were  in  fact  untrue,  as  to  513.  In  the  absence  of  satisfactory 
the  meaning  of  the  document.  Fehl-  proof  of  fraud,  or  misrepresentation 
berg  v.  Cosine,  16  R.  I.  162;  13  Atl.  on  the  part  of  the  society,  the  mem- 
Rep.  110;  Daniel  v.  Ins.  Co.,  34  N.  J.  ber  who  is  guilty  of  laches  in  having 
Eq.  30:  Harrison  v.  Ins.  Co.,  30  Fed.  accepted  and  acted  on  the  policy  for 
Rep.  862.  A  court  will  only  decree  years  can  not  have  the  contract 
the  reformation  of  an  instrument  to  changed  to  conform  to  his  recollec- 
enable  a  party  thereto  to  assert  or  tion  of  the  terms  agreed  upon.  Zal- 
mamtain  some  right  thereunder,  lee  v.  Ins.  Co.,  12  Mo.  App.  Ill; 
and  it  will  refuse  the  reformation  Massey  v.  Ins.  Co.,  70  Ga.  794; 
of  a  policy  of  insurance  when  it  Steines  v.  Ins.  Co.,  34  Fed.  Rep.  441; 
appears,  that,  by  reason  of  the  lapse  Fowler  v.  Ins.  Co.,  28  L.  J.  Ch.  225. 
of  time,  no  action  may  be  main-  '  Gray  v.  Supreme  Lodge,  118  Ind. 
tained  thereon  for  any  cause  when  293;  20  N.  East.  Rep.  833;  Snell  v. 
reformed.  Thompson  v.  Ins.  Co.,  Ins.  Co.,98U.-  S.  85,  88;  Thompson 
25  Fed.  Rep.  296;  see  Spare  v.  v.  Ins.  Co.,  136  U.  S.  287;  10  Sup. 
Ins.  Co.,  17  Fed.  Rep.  568.  An  in-  Ct.  Rep.  1019;  Mtna  Life  v.  Brodie, 
surance  policy  may  be  reformed  to  5  Can.  Sup.  Ct.  1. 
correct  a  mistake  made  by  an  agent. 


CERTIFICATE    OF   MEMBERSHIP.  299 

other,  nevertheless  kept  silent  when  he  should  have  spoken, 
the  party  having  knowledge  will  be  estopped  to  defeat  a  re- 
formation by  alleging  that  he  knew  that  the  instrument  was 
different  from  the  agreement,  and  that  the  mistake  was  not 
mutual.1  When  a  mutual  mistake  has  been  made  in  reducing 
a  contract  to  writing,  the  part}7-,  if  entitled  to  relief  at  all,  is 
entitled  to  have  the  contract  reformed  so  as  to  speak  the  truth 
and  to  have  it  enforced  according  to  the  terms  as  in  fact 
agreed  upon.  Where  a  certificate  was  by  mistake  issued  for 
two  thousand  instead  of  for  one  thousand  dollars,  it  was  held 
not  to  avail  the  beneficiary,  that,  after  the  death  of  the  mem- 
ber, she  offered  to  pay  or  allow  to  be  deducted  from  the  two 
thousand  dollars  an  amount  equal  to  the  assessments  paid  by 
the  deceased  member  on  the  contract  of  insurance  for  one 
thousand  dollars ;  and  it  was  further  held  that  the  beneficiary 
could  not  defeat  a  reformation  of  the  contract  by  showing 
that  while  relying  upon  the  certificate  and  expecting  to  re- 
ceive the  full  sum  of  two  thousand  dollars,  she  contracted 
debts  and  spent  sums  of  money  which  she  would  not  have  con- 
tracted nor  expended  had  she  had  knowledge  or  notice  of 
the  alleged  mistake.2  A  society  has  the  power  to  correct  a 
mistake  by  issuing  a  new  certificate  in  place  of  the  old  one, 
even  though  the  member  can  not  prove  sufficient  facts  to  com- 
pel it  in  equity  to  make  the  correction.3 

§  153.  Reformation  of  certificate,  inserting  name  of 
beneficiary. — A  certificate  of  membership  in  a  mutual  benefit 
society  may  be  reformed,  after  the  death  of  the  member,  by 
inserting  the  name  of  a  beneficiary,  when  it  appears  that  the 
secretary  of  the  association  and  the  assured  both  understood  at 
the  time  of  the  application,  that  the  proposed  name  should  be 
entered  upon  the  record  without  further  direction,  and  where 
it  was  the  duty  of  the  secretary  to  enter  upon  the  records  the 
names  of  the  beneficiaries  of  the  members.4     A  certificate   is 

'Roszell  v.  Roszell,  109Ind.  35 I:  10  "Ford  v.  U.  S.  Mutual.  148  Mass. 

N.  East.   Rep.  114;    Peasley  v.  Me-  158;  l'.t  N.  Bast.  Rep.   169;  Mead   v. 

Fadden,  68  Cal.  6U;  lOPac.  Rep.  179;  Davison,  8  A.dol.  &  E.  803;   Spauld- 

Town  of  Essex  v.  Day,  52  Conn.  488;  ing  v.  Conant,   146  Mass.  292;  15  N. 

1  Atl.  Rep.  620:  James  v.  Cutler.  54  East.  Rep.  688. 

Wis.  172;  ION.  W.  Rep.  147.  4Scottv.  Provident  Mutual.  68  X. 

"Gray  v.  Supreme  Lodge,  118  Ind.  H.  556;  I  Atl.  Rep.  793;  2  New  Eng. 

293;  20  N.  East.  Rep.  833.  Rep.  286;  see  Globe  Ins.  Co.  v.  Boyle, 


300  CERTIFICATE    OF   MEMBERSHIP. 

admissible  in  evidence  in  an  action  upon  it,  though  it  does  not 
name  the  beneficiary,  and  the  application  may  be  admitted  to 
show  who  the  beneficiary  really  is.1 

§  154.  Novation  of  the  contract. — The  constitution  and 
laws  of  the  Supreme  Lodge  of  the  Ancient  Order  of  United 
Workmen,  a  corporation  under  the  laws  of  Kentucky,  pro- 
vided that  in  certain  events  the  subordinate  divisions  known 
as  "  Grand  Lodges  "  might  be  set  apart  from  the  supreme 
lodo-e.  and  thereafter  collect  and  disburse  their  own  benefi- 
ciary  funds.  Plaintiff,  as  a  member  of  the  grand  lodge  of 
Massachusetts,  received  a  benefit  certificate  under  the  seal 
of  the  supreme  lodge.     Afterward  the  grand  lodge  was   set 

21  Oh.  St.  119;  Newman  v.  Associa-  the  record  book  as  the  beneficiary 
tion,  76  Iowa  56.  The  opinion  in  to  whom  the  benefit  is  payable, 
Scott  v.  Provident  Mutual,  supra,  is  and  that  (the  member)  understood 
as  follows:  ''The  defendants  con-  that  her  name  would  be  so  entered 
tracted  to  pay  a  sum  not  exceeding  without  further  direction  given  him, 
$'2,000  as  a  benefit,  upon  due  notice  of  it  was  the  duty  of  the  secretary  to 
the  death  of  (the  member),  and  the  enter  it;  and  the  accident  or  mistake 
surrender  of  his  certificate  of  mem-  was  one  which  equity  will  remedy, 
bership,  '  to  such  person  or  persons  as  The  accident  could  not  be  said  to  have 
he  may,  by  entry  on  the  record  book  arisen  from  the  negligence  or  fault 
of  the  association,  or  on  the  face  of  of  (the  member),  so  as  to  preclude  re- 
this  certificate,  direct  the  same  to  be  lief.  Story  Eq.  Jur.,  §  105.  Nor 
paid.'  The  bill  alleges,  and  the  de-  would  it  be  the  case  of  the  non-exe- 
murrer  admits,  that  at  the  time  he  cution  of  a  power  as  distinguished 
made  application  for  membership,  he  from  a  trust,  where  equity  does  not 
stated  to  the  association,  which  afford  relief.  Idem,  §§  169,  170.  As 
means  to  its  proper  officer  or  officers,  equity  interposes  only  as  between  the 
that  it  was  his  intention  that  the  original  parties  and  those  claiming 
benefit  should  be  paid  to  the  plaintiff,  under  them  in  privity  (1  Story  Eq. 
to  whom  he  was  then,  and  at  the  Jur.,  §§  105,  165)  objection  may  be 
time  of  his  decease,  betrothed.  The  obviated  by  an  amendment  joining 
prayer  of  the  bill  is  for  a  reformation  (the  member's)  administrator  as  co- 
of  the  contract  by  inserting  in  the  plaintiff.  She  may  then  prosecute 
membership  certificate  the  name  of  this  suit  in  his  name,  giving  him  in- 
the  plaintiff  as  beneficiary,  and  that  demnity,  if  he  requires  it,  against 
the  benefit  may  be  paid  to  her.  Sec-  costs  and  expenses.  The  bill  should 
tion  3  of  article  4  of  the  by-laws  also  contain  a  prayer  that  the  plaint- 
makes  it  the  duty  of  the  secretary  to  iff  s  name  may  be  inserted  in  the 
keep  a  record  of  the  members  of  the  record  book  as  (the  member's)  bene- 
association  and  the  persons  '  to  whom  ficiary." 

the  relief  is  to  be  paid.'    If  the  fact       '  Norristown  v.  Ins.  Co.,  132  Pa.  St. 

is  found  at  the  trial  term  that  the  385;  19  Atl.  Rep.  270;  see  Thompson, 

parties  understood  direction  as  given  Receiver,  v.  Ins.  Co.,  136  U.  S.  287. 
to  enter  the  plaintiff's  name    upon 


CERTIFICATE    OF   MEMBERSHIP.  301 

apart,  and  a  proper  proportion  of  the  beneficiary  fund  turned 
over  to  it.  Later  the  grand  lodge  was  incorporated  under  the 
laws  of  Massachusetts,  and  assumed  and  promised  to  pay  "  all 
the  obligations  and  liabilities  of,  and  beneficiary  and  other 
claims  against,  said  association,  whether  already  accrued  or 
hereafter  payable."  After  this  change  the  member  paid  his 
assessments  to  the  new  corporation,  and  was  recognized  as  a 
member  in  good  standing  until  his  death.  It  was  held  that 
this  effected  a  complete  novation  of  the  contract,  and  the  new 
corporation  was  liable  on  the  certificate.1 

§  155.  (<  In  good  standing." — In  an  action  on  a  certificate 
of  membership,  reciting  that  the  deceased  is  a  k'  beneficiary 
member  in  good  standing "  in  the  society,  and  that,  upon  his 
death,  a  sum  named  will  be  paid,  *'  provided  he  be  in  good 
standing  when  he  dies,"  the  certificate  is  proof  of  the  good 
standing  of  the  party  named  at  the  time  it  issued,  and  such 
standing  will  be  presumed  to  have  continued,  in  the  absence 
of  contrary  evidence.  In  such  case,  the  burden  is  on  the  soci- 
ety to  show  that  by  reason  of  his  conduct,  or  his  failure  to 
comply  with  the  regulations  or  requirements  of  the  society, 
the  deceased  member  had  lost  his  good  standing."  "Where  the 
contract  of  insurance  is  issued  upon  the  express  condition  that 
the  member  shall  keep  his  pledge  of  total  abstinence  and  com- 
ply with  the  laws  of  the  societ}*-,  and  provides  that  if  he  die 
in  good  standing,  his  beneficiary  shall  be  entitled  to  the  bene- 
fit fund,  the  violation  of  the  pledge  of  total  abstinence  alone 
forfeits  the  rights  of  the  beneficiary  to  recover  the  sum  pro- 
vided for.  In  such  a  case  it  may  be  shown  by  parol  that  he 
violated  his  pledge,  and  the  trial  and  conviction  by  the  society 
for  such  violation  need  not  be  shown  in  order  to  defeat  a  re- 
covery.8 Where  the  by-laws  of  an  unincorporated  society  pro- 
vide that  a  member  shall  forfeit  his  rights  in  the  benefit  fund 
in  case  he  shall  neglect  his  Easter  duty  of  confession,  he  is  not 

1  Bums  v.  Grand  Lodge,  153  Mass.  Mo.  App.  463;  OTirady  v.  Knights, 
173  ;  26  N.  East.  Rep.  443.  62  Conn.  223;  25  Atl.  Rep.  Ill ;  High 

2  Stewart  v.   Association,    36    Mo.    Court  v.  Zak,  136  III.  185. 

App.  319;    Supreme  Lodge  v.  John-  3  Royal  Templars  v.  Curd,  111  111. 

son,  78  Ind.  110;  Mills  v.  Rebstock,  284;  Hogins  v.  Supreme  Council,  76 

29  Minn.   380;    Millard   v.   Supreme  Cal.  109;  18  Pacific  Rep.  125;  Smith 

Council,  81  Cal.  340 ;    22  Pac.  Rep.  v.  Association,  36  Mo.  App.  184. 
864;  Mulroy  v.  Knights  of  Honor,  28 


302  CERTIFICATE    OF   MEMBERSHIP. 

in  good  standing  unless  be  regularly  performs  such  duty ;  and 
his  neglest  of  such  duty  may  be  shown  in  an  action  by  the 
beneficiary  on  his  certificate.1 

Where  the  constitution  and  by-laws  of  an  unincorporated 
mutual  benefit  society  provide  that  its  members  shall  pay  clues 
and  assessments  for  insurance  according  to  a  certain  plan,  and 
that  each  member  shall  be  a  communicant  in  the  Roman 
Catholic  church,  and  shall  yearly  go  to  confession  to  a  priest 
of  that  church,  and  receive  the  holy  communion,  which  pro- 
visions of  the  constitution  and  by-laws  were  well  known  to  the 
member  at  the  time  he  entered  into  the  contract  of  insurance, 
the  member  must  not  only  pay  his  dues  and  assessments,  in 
order  to  remain  in  good  standing  in  the  society,  but  must  also 
perform  his  duty  of  confession  and  communion,  or  forfeit  his 
rights  under  the  contract.2  It  was  urged  in  this  case  that  these 
provisions  for  yearly  confession  and  communion  were  contrary 
to  the  constitution  of  the  United  States,  and  the  constitution 
of  the  State  of  Kentucky,  upon  the  subject  of  freedom  of 
religious  worship,  but  the  court  held  that  they  were  clearly 
legal  and  binding  upon  members  of  an  unincorporated  society 
who  had  agreed  to  be  bound  by  them.  In  People  v.  Benevolent 
Society,3  it  is  suggested  in  the  opinion  that  provisions  of  a  by- 
law requiring  the  practice  of  religious  duties,  such  as  confession 
and  communion,  according  to  the  practice  and  teachings  of 
any  particular  faith,  as  conditions  of  membership  in  an  in- 
surance society,  are  not  obligatory  upon  members,  because  they 
are  contrary  to  the  provision  of  the  constitution  of  the  state 
of  New  York,  Article  I,  Sec.  3 :  "  The  free  exercise  and  enjoy- 
ment of  religious  profession  and  worship,  without  discrimina- 
tion or  preference,  shall  forever  be  allowed  in  this  state  to  all 
mankind."  But  the  decision  is  placed  upon  other  grounds — ■ 
that  the  proceedings  of  expulsion  were  invalid,  and  that  a 
religious  society  could  not  be  organized  under  the  act  providing 
for  the  incorporation  of  charitable  and  benevolent  institutions. 
A  limitation  of  relief  in  case  of  disability  to  members  in  good 
standing  requires  only  that  they  shall  be  in  good  standing 
when  disabled.4 

'Matt  v.  Society,  70  Iowa,  455;  30  431,  but  not  reported  in  Kentucky 
N.  W.  Rep.  799.  Reports. 

'Hitter  v.   St.    Aloysius    Society,       824  How.  Pr.  216. 
Kentucky  Court  of  Appeals,  reported       4  McMahon  v.  Supreme  Council,  54 
in  Albany  Law  Journal,  vol.  27,  p.    Mo.  App.  468. 


CERTIFICATE    OF    MEMBERSHIP.  303 

Where  a  contract  provides  that  a  fund  shall  be  paid  to  the 
beneficiary  of  any  member  in  good  standing  at  the  time  of  his 
death,  and  that  a  member  shall  be  deemed  in  good  standing 
for  the  purpose  of  the  benefit  fund,  who  at  the  time  of  his 
death  was  not  indebted  to  the  society,  the  payment  by  the 
beneficiary  of  past  due  assessments  a  few  hours  before  the  death 
of  the  member  entitles  him  to  the  fund,  though  the  member  is 
not  reinstated  to  membership  thereby  for  failure  to  comply 
with  the  by-laws  with  reference  to  reinstatement  to  the  privi- 
leges of  membership.1 

§  156.  Suicide. — -Contracts  of  insurance  usually  stipulate 
that  the  insurer  shall  be  exempt  from  liability  in  case  of  the 
death  of  the  insured  by  suicide.  Courts  have  spent  much 
time  and  great  labor  in  endeavoring  to  determine  the  meaning 
of  the  words  in  which  this  exemption  has  bsen  expressed.  It 
is  generally  agreed  that  the  terms  "die  by  his  own  hand," 
"suicide,"  "self-murder,"  and  the  like  are  synonymous.' 
There  is,  however,  not  only  an  irreconcilable  difference  in  the 
opinions  of  courts  as  to  their  proper  msaning,  but  also  a  no- 
ticeable want  of  harmony  in  the  opinions  of  the  judges  of  the 
different  courts  which  have  passed  upon  the  subject.  It  would 
require  too  much  space  to  follow  the  courts  and  the  judges  who 
have  written  dissenting  opinions  through  their  courses  of  rea- 
soning and  processes  of  distinction  on  the  question  Avhether  the 
insanity  of  the  insured  at  the  time  of  his  suicide  takes  the 
case  out  of  the  exemption  from  liability  which  the  insurer 
has  provided  for,  but  it  will  be  sufficient  here  to  state  that 
there  are  authorities  holding  that  it  does,3  and  others  holding 

1  O'Grady  v.  Knights,  62  Conn.  223.  acter,  the  general  nature,  conse- 
Ineonsistent  provisions  of  the  by-laws  quences  and  effect  of  the  act,  even 
were  construed  in  this  case.  though  lie   knew  and   intended  that 

2  Schultz  v.  Ins.  Co.,  40  Oh.  St.  his  death  should  result  from  his  act. 
217;  Phadenhauer  v.  Ins.  Co.,7Heis-  Life  Ins.  Co.  v.  Terry.  82  U.  S.  580; 
kell  (Tenn.)567;  Breasted  v.  Ins,  Co.,  Conn.  Mutual  v.  Groom,  86  Pa.  St. 
8N.  Y.  299;  Cooper  v.  Ins.  Co.,  102  92;  Eastabrook  v.  Ins.  Co.,  54  Me. 
Mass.  227.  224;  Breasted  v.  Company,  8  N.  Y. 

a  A  policy  of  insurance  which  stip-  299;  Van  Zandt  v.  Ins.  Co.,  55  X.  Y. 

ulatos  that  it  shall  be   void  if  the  in-  169:    distinguishing   Life   Ins.  Co.  v. 

sured  shall  die   by  suicide   is  not  for-  Terry,  supra  and  Breasted   v.    Com- 

feited  by  reason  of  the  fact  that  he  pany,  giipra;  Schultz  v.  Ins.  Co..  40 

destroyed  his   life   while   insane  and  Oh.  St.  217;  Phadenhauer  v.  Ins.  Co., 

unable  to  understand  the  moral  char-  7  Heiskell  (Temi.)  567;  Newton  v.  Ins. 


301 


CERTIFICATE    OF   MEMBERSHIP. 


that  it  does  not.1  A  condition  that  the  policy  shall  be  void  if 
the  insured  shall  "  die  by  his  own  hand  or  act,  voluntary  or 
otherwise"  does  not  cover  the  case  of  his  death  by  accident  or 
unintentional  self-killing.  It  does  not  apply  where  his  death 
resulted  from  his  accidentally  and  innocently  taking  poison 
while  sane.a  Conditions  in  the  contract,  providing  that  it  shall 
be  void  if  the  insured  shall  "die  by  his  own  hand  or  act,  sane 
or  insane,"  or  "  die  by  suicide,  sane  or  insane,"  have  been  in- 
serted to  avoid  the  question  of  the  insanity  of  the  insured  if 
he  should  commit  suicide.  They  have  been  sustained  at  least 
to  this  extent  that  the  contract  is  avoided  if  the  insured  knew 
what  he  was  doing,  realized  the  consequences  of  his  act,  and 
intended  to  take  his  life.3 


Co.,  76  N.  Y.  426;  Phillips  v.  Ins. 
Co.,  26  La.  Ann.  404;  Waters  v.  Ins. 
Co.,  2  Fed.  Rep.  892;  Suppiger  v.  As- 
sociation, 20  111.  App.  595;  John 
Hancock  Ins.  Co.  v.  Moore,  34  Mich. 
41;  Scheffer  v.  Ins.  Co..  25  Minn.  534; 
Association  v.  Waller,  57  Ga.  533; 
Merrittv.  Ins.  Co.,  55  Ga.  103;  59 
Ga.  564;  Hathaway  v.  Ins.  Co.,  48 
Vt.  335;  Knickerbocker  Ins.  Co.  v. 
Peters,  42  Md.  414;  Adkinsv.  Ins.  Co., 
70  Mo.  27;  Michigan  Mutual  v.  Nau- 
gle,  130  Ind.  79;  29  N.  East.  Rep.  393. 

1  Where  the  policy  provides  that  it 
shall  be  void  if  the  insured  shall  die 
by  suicide  it  is  avoided  by  his  self- 
destruction,  even  though  he  was  at 
the  time  impelled  by  an  insane  im- 
pulse which  he  was  unable  to  resist, 
and  was  unable  to  judge  between 
right  and  wrong. 

Borradaile  v.  Hunter,  5  M.  &  G. 
639;  Cooper  v.  Ins.  Co.,  102  Mass.  227; 
Dean  v.  Ins.  Co.,  4  Allen,  96;  Clift  y. 
Schwabe,  54  Eng.  Com.  L.  Rep.  437; 
Streeter  v.  Society,  65  Mich.  199;  31 
N.  W.  Rep.  779;  Sabin  v.  Union,  90 
Mich.  177;  51  N.  W.  Rep.  202;  Bil- 
lings v.  Ins.  Co.,  64  Vt.  78;  24  Atl. 
Rep.  656. 

2  Keels  v.  Association,  29  Fed.  Rep. 
198;  Penfold  v.  Ins.  Co.,  85  N.  Y.  317; 
39  Am.  Rep.  660;    Equitable  Life  v. 


Paterson,  41  Ga.  338;  Edwards  v.  Ins. 
Co.,  20  Fed.  Rep.  661;  Pierce  v.  Ins. 
Co.,  34  Wis.  389;  Shank  v.  Society, 
84  Pa.  St.  385;  Lawrence  v.  Ins.  Co., 
5  111.  App.  280;  8  111.  App.  488;  9  Ins. 
L.  J.  313;  N.  W.  Ins.  Co.  v.  Hazlett, 
105  Ind.  212;  Michigan  Mutual  v. 
Naugle,  130  Ind.  79;  29  N.  East.  Rep. 
393. 

3  Bigelow  v.  Ins.  Co.,  93  U.  S.  284; 
Riley  v.  Ins.  Co.,  25  Fed.  Rep.  315; 
Adkins  v.  Ins.  Co.,  70  Mo.  27;  35  Am. 
Rep.  410:  Pierce  v.  Ins.  Co.,  34  Wis. 
389;  5  Big.  L.  &  A.  Cas.  498;  Su- 
preme Commandery  v.  Ainsworth, 
71  Ala.  436;  46  Am.  Rep.  332;  Mal- 
lory  v.  Ins.  Co.,  47  N.  Y.  52;  7  Am. 
Rep.  410;  Suppiger  v.  Association,  20 
111.  App.  595;  Sabin  v.  National 
Union,  90  Mich.  177;  51  N.  W.  Rep. 
202;  Streeter  v.  Society,  65  Mich. 
199;  31  N.  W.  Rep.  779.  "  Shall  un- 
der any  circumstances,  die  by  his 
own  hand."  A  proper  construction 
of  this  proviso  requires  that  the 
words  "under  any  circumstances" 
be  disregarded  as  too  general  and  in- 
definite. Schultz  v.  Ins.  Co.  40  Oh. 
St.  217.  "  Shall  die  by  his  own  hand 
or  act,  voluntary  or  otherwise."  The 
words  ' '  or  otherwise  "  were  held  of 
uncertain  meaning  and  void.  Jacobs 
v.  Ins.  Co.,  1   McArthur    632;  5  Big. 


CERTIFICATE    OF    MEMBERSHIP.  305 

It  is  proper  for  the  parties  to  stipulate  in  the  contract  that 
a  limited  and  fixed  amount  shall  be  paid  in  case  the  insured 
shall  take  his  life  while  insane.1  The  suicide  of  the  insured 
does  not  avoid  the  contract  unless  it  is  expressly  so  stipulated.2 
But  a  certificate  obtained  by  a  sane  person  in  anticipation  of 
suicide  for  the  purpose  of  providing  for  his  creditors  and  fam- 
ily, although  it  contains  no  clause  avoiding  it  in  the  event  of 
suicide,  is  fraudulent  in  its  inception,  and  can  have  no  bind- 
ing force.8  In  the  absence  of  evidence  to  the  contrary  it  will 
be  presumed  that  death  by  drowning  was  the  result  of  acci- 
dent and  not  of  suicide,  and  where  there  is  no  evidence  as  to 
the  cause  of  the  death  of  the  insured,  the  presumption  is  that 
it  was  from  natural  causes,  and  not  an  act  of  self-destruction.4 
But  where  the  evidence  is  equally  balanced  as  to  whether  the 
death  was  by  suicide  or  not,  it  is  error  to  instruct  the  jury  that 
if  the  evidence  leaves  the  matter  in  doubt,  the  presumption  is 
that  the  death  was  produced  by  natural  causes,  and  not  by 
self-destruction.5  The  burden  is  upon  the  society  to  prove  that 
the  deceased  committed  suicide,  if  it  alleges  such  to  be  the 
fact,  but  if  the  plaintiff  in  the  proofs  of  death  has  stated 
that  the  death  was  by  suicide,  it  is  incumbent  on  him  to  satisfy 

L.  &  A.  Rep.  42;    contra,   Penfold  v.  was   insane.     See    Hartman  v.  Ins. 

Ins.  Co.,  85  N.  Y.  317.     "  Die  by  self-  Co..  21  Pa.  St.  468;  Bank  v.  Ins.  Co., 

destruction,  felonious    or  otherwise"  5  Big.  L.  &  A.  Cas.  4TS. 

includes  all  cases    of  voluntary  self-  3  Smith  v.  Benefit  Society,  22  N.  Y. 

destruction,    sane  or  insane.     Riley  St.   Rep.  852;  51  Hun  575;  123  N.  Y. 

v.  Ins.  Co.,  25  Fed.   Rep.  315.     "Die  85. 

by  suicide,  felonious    or    otherwise,  4  Mallory  v .  Ins .  Co.,   47  N.  Y.  52; 

sane  or  insane,"  expressly  excludes  a  2  Ins.  L.  J.  839;  Pierce  v.  Ins.  Co.,  34 

limitation  to    a  case  of  self-murder.  Wis.  389;  Shank  v.   Society,  84  Pa. 

Pierce  v.  Ins.  Co.,  34  Wis.  389.  St.  385;  Lawrence  v.    Ins.  Co.,  5  111. 

' '  Salentine  v.  Ins.  Co.,  24  Fed.  Rep.  App.  280;  8  111.  App.  488;  Wright  v. 

159;  see  Frey  v.  Ins.  Co.,    56  Mich.  Ins.    Co.,    29    Up.   Can.   C.   P.  221; 

29.  Washburn  v.  Society,  10  N.  Y.  Supp. 

'Darrow  v.  Society,  116  N.  Y.  537;  366;  Knickerbocker  Ins.  Co.  v.    Jor- 

22  N.  East.  Rep.    1093;  42  Hun  245;  dan,  7  Cin.  Law  Bull.  71;  Travelera 

Mills  v.  Robstock,  29  Minn.  380;  13  N.  Ins.  Co.  v.  McConkey,  127  U.  S.  661: 

W.  Rep.  162;  Fitch  v.  Ins.  Co.,  59  N.  8  Sup.  Ct.  Rep.  1360;  17  Ins.  L.  J.  585; 

Y.   573;  Patrick  v.    Ins.    Co.,  4  Hun  Cronkhite  v.    Ins.    Co.,  75  Wis.  116; 

263;  Horn  v.  Association,   7  Jur.  N.  43  N.  W.   Rep.   731;   Accident   Ins. 

S.   673.     It   may   be,    however,  that  Co.  v.  Bennett,  90  Tenn.  256;  16   S. 

some  distinction  should  be  made  be-  W.  Rep.  723. 

t  ween  a  case  where  the  insured  was  5  Guardian  Mutual  v.    Hogan,    80 

sane  at  the  time  and  a  case  where  he  111.  47. 
20 


306  CERTIFICATE    OF    MEMBERSHIP. 

the  jury  that  he  was  mistaken  in  the  statement,  and  that  the 
death  was  from  natural  causes,  or  was  caused  by  accident.1 

Where,  in  an  action  on  an  accident  policy  to  recover  for  the 
death  of  the  insured,  there  is  but  little  evidence  to  justify  a 
jury  in  deciding  which  one  of  several  theories  as  to  the  cause 
of  death  is  the  correct  one,  but  what  evidence  there  is  supports 
the  theory  of  suicide,  rather  than  accidental  death,  a  verdict 
for  plaintiff  must  be  set  aside.2  Where  the  verdict  of  a  coro- 
ner's jury,  finding  that  the  deceased  had  come  to  his  death  by 
suicide,  was  annexed  to  the  proof  of  death,  it  was  held  that 
the  burden  was  on  the  insurer  to  prove  the  suicide  of  the 
deceased.3 

§  157.  Known  violation  of  the  law — Unlawful  act. — 
Contracts  of  insurance  usually  provide  that  the  society  shall 
not  be  liable  in  case  of  the  death  or  injury  of  the  member 
while  engaged  in,  or  in  consequence  of  any  unlawful  act,  but 
in  such  cases,  the  contract  is  not  avoided  by  the  mere  fact  that, 
at  the  time  of  his  death,  the  assured  was  violating  the  law,  if 
the  death  occurred  from  some  cause  other  than  such  viola- 
tion.4 It  is  sufficient  to  relieve  the  society  if  the  known  viola- 
tion of  law  was  such  as  to  proximately  lead  to  the  death  of 
the  assured  by  bringing  him  into  danger  of  losing  his  life.5 
In  Cluff  v.  Ins.  Co.6  it  was  held  that  in  order  to  avoid  the 
contract  of  insurance  on  the  ground  that  the  insured  died 
while  violating  the  law  of  a  state,  the  company  must  prove 
that  the  assured  died  while  engaged  in  a  voluntary  criminal 
act.7  This  decision  is  criticised  in  Bradley  v.  Mutual  Benefit, 
supra,  and  Bloom  v.  Franklin  Life,  supra,  and  its  soundness 
denied.  In  the  latter  case,  the  court  holds  this  to  be  the  law  : 
"A  known  violation  of  a  positive  law,  whether  the  law  is  a 

1  Keels  v.  Association,  29  Fed.  Rep.  20    Neb.   620:   31   N.    W.   Rep.    122; 

19S;  Mutual  Ben.  Ins.  Co.  v.  Newton,  Harper's  Admr.  v.  Phoenix  Ins.  Co., 

89  U.  S.  38;  Dennis  v.  Union  Mutual  19  Mo.  506;  Bradley  v.  Mutual  Bene- 

(Cal.),  24  Pac.  Rep.  120.  fit,  45  N.  Y.  422;  Murray  v.   N.  Y. 

5  Merrett  v.  Preferred  Masonic,  98  Life.  96  N.  Y.  614. 
Mich.  338;  57  N.  W.  Rep.  169.  6  Bloom  v.  Franklin  Life,  97  Ind. 

3  Goldschmidt  v.  Ins.  Co.,  102  N.  478;  Insurance  Co.  v.  Seaver,  86  U. 
Y.  486;    7    N.   East.    Rep.   408;    see  S.  531. 

United  States  L.  Ins.  Co.  v.  Vocke,  6  99  Mass.  317. 

Adm'r  Kielgast,  129  111.  £57;   22  N.  7  Harper   v.  Ins.    Co.,  19  Mo.    506; 

East.  Rep.  467;  see  §  326.  Overton    v.    Ins.   Co.,    39    Mo.    122; 

4  Griffin  v.  West.  Mut.  Ben.  Ass'n,  Wolff  v.  Ins.  Co.,  5  Mo.  App.  236. 


CERTIFICATE    OF    MEMBERSHIP.  307 

civil  or  a  criminal  one,  avoids  the  policy,  if  the  natural  and 
reasonable  consequences  of  the  violation  are  to  increase  the 
risk;  a  violation  of  law,  whether  the  law  is  a  civil  or  a  criminal 
one,  does  not  avoid  the  policy,  if  the  natural  and  reasonable 
consequence  of  the  act  does  not  increase  the  risk."  A  person 
insured  in  a  mutual  benefit  society,  entered  the  office  of  the 
state  treasurer,  obtained,  by  a  show  of  arms,  a  sum  of  money, 
and  was  shot  and  killed  while  making  his  escape,  but  before 
he  had  reached  the  outer  door  of  the  capitol.  It  was  held 
that,  as  he  had  obtained  the  money,  and  was  making  his  escape 
when  shot,  he  was  not  at  the  instant  of  death,  violating  any 
law,  so  as  to  forfeit  a  certificate  of  membership  containing  a 
clause  providing  for  a  forfeiture,  in  case  the  insured  should 
"  die  while  violating  any  law."  '  A  policy  contained  a  provis- 
ion rendering  it  void,  if  the  insured  should  die  "  in  consequence 
of  his  violation  of  any  law."  The  insured  was  killed  by  II. 
shortly  after  having  illicit  intercourse  with  the  wife  of  H.,  and 
it  was  held  that,  even  if  the  act  of  the  insured  was  a  violation 
of  the  law,  he  did  not  die  in  consequence  of  it,  within  the 
meaning  of  the  policy,  and  the  policy  was  not  avoided  thereby.3 
Where  a  person  who  is  insured  deserts  from  the  army,  and 
is  shot  by  a  sheriff,  who  is  attempting  to  arrest  him,  as  alleged 
in  self-defense,  it  can  not  be  held,  as  matter  of  law,  that  he 
was  engaged  in  an  unlawful  act,  within  the  meaning  of  a  pol- 
icy of  accident  insurance,  providing  that  no  claim  shall  be 
made  "  when  the  death  or  injur}7  may  have  happened  *  * 
while  engaged  in,  or  in  consequence  of,  any  unlawful  act." 
Upon  this  point  the  court  said :  "  Nor  can  it  be  held,  as  a 
matter  of  law,  that  (the  deserter)  was  engaged  in  an  unlawful 
act,  within  the  meaning  of  this  policy.  If  he  had  been  shot  in 
the  act  of  deserting,  this  claim  might  be  made  with  some  reason 
and  propriety,  but  such  was  not  the  case  here.  Neither  was  he 
shot  because  he  was  a  deserter,  nor  because  he  was  in  a  house 
of  ill  fame.  He  was  shot,  if  (the  sheriff)  is  to  be  believed, 
because  he  did  not  throw  up  his  hands  when  commanded  to, 
and  was  in  the  act  of  drawing  a  pistol.     He  was  killed,  if  (a 

1  Griffin    v.    Western    Mutual,    20  Supreme  Ct.),   572;    3  Hun  515;    see 

Neb.  620;  31  N.  W.  Rep.  123.  Gresham  v.  Ins.  Co.,  87  Ga.  497;   13 

2Goetzmann  v.    Conn.    Mut.   Life  S.  East.  Rep.  752. 
Ins.  Co.,  5  Thompson  &  Cook  (N.  Y. 


308  CERTIFICATE    OF    MEMBERSHIP. 

witness)  is  to  be  believed,  without  provocation,  and  in  a  wanton 
and  murderous  manner,  as  soon  as  his  head  appeared  in  the 
door.  Whether  he  was  doing  anything  unlawful  at  the  time 
of  the  shooting  was  a  question  for  the  jury,  to  be  determined 
by  them  under  all  the  circumstances  of  the  case." '  Where 
persons  are  by  law  prohibited  from  walking  on  a  railroad 
track,  it  is  an  unlawful  act,  within  the  meaning  of  a  policy,  to 
use  such  a  track  as  a  highway.2  The  common  law  definition  of 
an  affray  does  not  involve  an  agreement  to  fight,  and,  where 
the  common  law  on  this  subject  is  in  force,  an  insured  may 
possibly  engage  in  an  affray,  without  having  agreed  to  fight, 
and  without  any  culpable  fault  on  his  part.  He  may  engage 
in  an  affray  in  defense  of  his  person  against  the  assaults  of  his 
adversary  or  adversaries,  and  thus  receive  accidental  injuries 
without  any  fault  or  wrong  on  his  part,  and  without  being 
guilty  of  an  unlawful  act.3  In  an  action  on  an  accident 
insurance  policy,  containing  a  condition  that  the  insurers 
would  not  be  liable  for  a  death  by  an  accident  caused  by  a 
violation  of  law,  a  recovery  can  not  be  had  in  a  state 
where  horse-racing  is  a  misdemeanor,  for  a  death  by  accident 
while  engaged  in  a  horse-rase.  While  the  insured  and  another 
were  engaged  in  horse-racing,  their  sulkies  came  into  collision, 
and  the  insured  jumped  to  the  ground.  He  was  entirely  clear 
from  the  sulky,  harness  and  reins,  and  started  forward  to  stop 
his  horse.  In  attempting  to  do  so  he  was  killed;  and  it  was 
held  that  his  dea'th  was  caused  by  a  violation  of  the  law, 
although  his  opponent  may  have  disregarded  the  rules  of  the 
course,  and  may  have  intentionally  sought  to  run  him  off  the 
track.4 

Under  a  policy  stipulating  that  the  insurance  does  not 
extend  to  injuries  received  while  engaged  in,  or  in  conse- 
quence of,  any  unlawful  act,  the  fact  that  the  assured  was 
killed  while  living  in  a  state  of  fornication  with  his  mistress 
does  not  prevent  a  recovery,  where  it  does  not  appear  that 
the  infliction  of  injury  is  a  natural  and  necessary  consequence 

1  Utter  v.  Ins.  Co.,  65  Mich.  545;  32  Ind.  133;  see  Gresham  v.  Ins.  Co.,  87 

N.  W.  Rep.  812.  Ga.  497;  13  S.  East.  Rep.  752. 

2Neill  v.  Ins.  Co.,  31  Up.  Can.  C.  4 Travelers'   Ins.  Co.  v.  Seaver,  86 

P.  394.  U.  S.  (19  Wall.)  531. 

3  Supreme  Council  v.  Garrigus,  104 


CERTIFICATE    OF    MEMBERSHIP.  309 

of  the  unlawful  association  as  its  probable  and  natural  result.1 
Fornication,  or  "being  in  a  state  of  fornication,"  however 
immoral  and  wrong,  must  be  accompanied  with  circumstances 
of  notoriety  or  publicity  to  make  it  an  unlawful  act.  A 
woman  whose  life  was  insured  procured  an  abortion  to  be 
performed  on  her  and  died  from  the  effects  of  the  miscarriage. 
The  court  held  that  there  could  be  no  recovery,  because  the 
act  which  caused  her  death  was  unlawful.2  A  person  who 
walks  from  one  town  to  another  on  Sunda}7,  for  the  purpose 
of  hunting,  violates  the  statutes  of  Vermont,  which  forbid 
hunting  on  Sunday,  or  traveling  on  Sunday  except  from 
necessity  or  charity;  and  an  injury  occasioned  by  his  slipping 
on  frozen  ground,  while  returning  home  from  hunting  on  Sun- 
day, is  not  covered  by  an  accident  insurance  policy,  exempt- 
ing the  company  from  liability  where  a  "  violation  of  law  "  is 
the  act,  cause  or  condition,  "  wholly  or  partly,  directly  or 
indirectly,"  producing  the  injury,  or  where  the  injury  is 
"  effected  by  any  such  act,  cause  or  condition,  or  under  its  in- 
fluence." *  In  New  York  suicide  is  not  a  crime,  though  an 
attempt  to  commit  suicide  is.  The  fact  that  a  member  killed 
himself,  is  not,  therefore,  in  that  state  a  defense  to  an  action, 
under  the  provision  of  the  contract  that  it  should  be  void  if 
he  should  "  die  in  violation  of  or  attempt  to  violate  any  crimi- 
nal law."  *  It  seems  to  be  well  settled  that  acts  which  are  crim- 
inal by  the  common  law  and  the  laws  of  all  civilized  countries 
will  be  presumed  to  be  criminal  by  the  laws  of  the  states  of 
the  union,  and  it  will  be  presumed  that  the  insured  knew 
that  an  act  of  this  character  was  criminal  at  the  place  where 
he  committed  it.5 

A  defense  that  the  injury  was  sustained  while  violating  the 
law,  contrary  to  the  provisions  of  an  accident  policy,  need  not 
be  established  beyond  a  reasonable  doubt.  A  preponderance 
of  evidence  is  sufficient.6 

"Accident  Ins.    Co.  v.  Bennett,  90  39  Minn.    312;   39  N.  W.    Rep.    312. 

Tenn.  256;  16  S.  W.  Rep.  723.  5  Cluff  v.  Ins.  Co.,    13  Allen  308; 

'  Hatch  v.  Ins.  Co.,  120  Mass.  550.  Bradley  v.  Ins.  Co.,  3  Lans.  341;  45 

3Duran  v.  Ins.  Co.,  63  Vt.  437;  22  N.  Y.  422. 

Atl.  R'p.  530.  6N.  Y.  Ace.  Co.  v.  Clayton,  59  Fed. 

4  Darrow  v.  Society,  116  N.  Y.  537;  Rep.  559;  Rothchild    v.    Ins.  Co.,  62 

22  N.  East.  Rep.   1093;  affirming  42  Mo.  356;  Mathews  v.  Huntley,  9  N.  H, 

Hun  245;  see   Kerr   v.  Association,  146;  Welch  v.  Jugenheimer,  56  Iowa 


310 


CERTIFICATE    OF   MEMBERSHIP. 


11;  8  N.  W.  Rep.  673;  Blaeser  v.  Ins. 
Co.,  37  Wis.  31.  Good  health,  free 
from  disease,  serious  illness;  see 
Peacock  v.  Ins.  Co.,  20  N.  Y.  296;  S. 
C,  1  Boswell  338;  Grattan  v.  Ins.  Co. 
92  N.  Y.  274;  Smith  y.  Ins. Co.,  49 N. 
Y.  211;  Ferguson  v.' Ins.  Co..  32  Hun 
306;  Conn.  Ins.  Co.  v.  McMurdy,  89 
Pa.  St.  363;  Illinois  Masons  v.  Win- 
throp,  85111.  537;  Goucher  v.  Associa- 
tion, 20  Fed.  Rep.  596;  Conver  v.  Ins. 
Co.,  3  Dillon  216;  Brown  v.  Ins.  Co., 
65  Mich.  306;  32  N.  W.  Rep.  612;  8 
West.  Rep.  775;  Morrison  v.  Odd 
Fellows  Mutual,  59  Wis.  170;  Ala- 
bama Ins.  Co.  v.  Johnston,  80  Ala. 
467;  Galbraith  v.  Arlington  Mutual, 
12  Bush  (Ky.)  29;  Powers  v.  Asso- 
ciation, 50  Vt.  630;  Schwarzbach  v. 
Union,  25  W.  Va.  622;  N.  W.  Mu- 
tual v.  Heimann,  93  Ind.  24;  Conti- 
nental Lis.  Co.  v.  Yung,  113  Ind. 
159;  15  N.  East.  Rep.  220;  12  West. 
Rep.  715;  Moulor  v.  Ins.  Co.,  Ill  U. 
S.  335:  Conn.  Mutual  v.  Trust  Co. 
112  U.  S.  250;  Maine  Association  v. 
Parks,  81  Me.  79;  Singleton  v.  Ins. 
Co.,  66  Mo.  63;  27  Am.  Rep.  321; 
Mutual  Benefit  v.  Wise,  34  Md.  599; 
Campbell  v.  Ins.  Co.,  98  Mass.  381; 
Vose  v.  Ins.  Co.,  6  Cush.  (Mass.)  42; 
Piedritzki  v.  Supreme  Lodge,  76 
Mich.  429;  43  N.  W.  Rep.  373;  Ins.  Co. 
v.  Francisco,  84  U.  S.  672:  see  §  399. 
Sober  and  temperate,  intoxicating 
liquors;  see  N.  W.  Ins.  Co.  v.  Bank, 

122  U.  S.  501;  iEtnalns.  Co.  v.  Davey, 

123  U.  S.  739;  S.  C,  38  Fed.  Rep.  650; 
Knickerbocker  Ins.  Co.  v.  Foley, 
105  U.  S.  350;  Brockway  v.  Ins.  Co., 


9  Fed.  Rep.  249;  Meacham  v.  Associa- 
tion, 120  N.  Y.  237;  McGinley  v.  Ins. 
Co.,  77  N.  Y.  605;  S.  C,  8  Daly  390; 
^■Etna  Ins.  Co.  v.  Deming,  123  Ind. 
384;  John  Hancock  Mutual  v.  Daly, 
65  Ind.  6;  Hartwell  v.  Ins.  Co..  33  La. 
Ann.  1353;  United  Brethren  v. 
O'Hara,  120  Pa.  St.  256;  Union  Mu- 
tual v.  Reif,  36  Oh.  St.  596;  Mowryv. 
Ins.  Co.,  9  R.  I.  346;  Ins.  Co.  v. 
Stibbe,  46  Md.  302;  Newman  v. 
Association,  76  Iowa  56;  33  N.  W. 
Rep.  662;  Grand  Lodge  v.  Brand,  29 
Neb.  644;  46  N.  ;W.  Rep.  95;  Mair 
v.  Ins.  Co.,  37  L.  T.  Rep.  356;  Shader 
v.  Ins.  Co.,  66  N.  Y.  441;  Miller  v. 
Ins.  Co.,  31  Iowa,  216;  34  Id. 
222;  39  Id.  304;  Van  Valkenburg  v. 
Ins.  Co.,  70  N.  Y.  605;  9  Hun  583. 
Medical  attendance,  attending  physi- 
cian; see  Edington  v.  Ins.  Co.,  67 
N.  Y.  185;  Cushman  v.  Ins.  Co.,  70 
N.  Y.  72;  Price  v.  Ins.  Co.,  17  Minn. 
497;  10  Am.  Rep.  166:  Cobb  v.  Asso- 
ciation, 153  Mass.  176;  26  N.  East. 
Rep.  230;  Monk  v.  Ins.  Co.,  6  Robert- 
son (N.  Y.),  455;  Metropolitan  Ins. 
Co.  v.  McTague,  49  N.  J.  Law,  587; 
9  Atl.  Rep.  766;  McCollum  v.  Ins. 
Co.,  55  Hun  103;  Dentz  v.  O'Neill, 
25  Hun  442;  Phillips  v.  Ins.  Co.,  9 
N.  Y.  Supp.  836;  Scoles  v.  Ins.  Co., 
42  Cal.  523;  Raid  v.  Ins.  Co.,  58  Mo. 
421;  Brown  v.  Ins.  Co.,  65  Mich.  306; 
32  N.  W.  Rep.  613;  8  West.  Rep.  775; 
Hutton  v.  Society,  1  Foster  &  Finn, 
735;  World  Mutual  v.  Schultz,  73  111. 
586;  O'Hara  v.  United  Brethren,  134 
Pa.  St.  417;  Miller  v.  Ins.  Co.,  14  Out. 
App.  218. 


CHAPTER  XL 

WHO  MAY  BE  A  BENEFICIARY— INSURABLE  INTEREST.— PART  I. 

§  158,  159.     Classes  of  beneficiaries  specified  in  the  charter. 

160.  The  terms  of  the  charter  are  to  ba  liberally  construed. 

161.  Any  person  belonging  to  a  specified  class  may  be  the  beneficiary. 

162.  Effect  of  amendment  of  the  organic  law  of  a  society. 

163.  When  an  unincorporated  lodge  may  be  the  beneficiary. 

164.  When  a  divorced  wife  may  be  the  beneficiary. 

§158.    Classes  of  beneficiaries  specified  in  the  charter. — 

The  laws  providing  for  the  organization  of  mutual  benefit 
societies  usually  specify  the  classes  of  persons  who  may  be 
made  the  beneficiaries  of  the  insurance.  In  the  absence  of 
such  restrictions  any  person  may  be  designated  to  take  the 
fund,  who  is  capable  of  taking  it  under  the  terms  of  the  con- 
stitution and  by-laws  of  the  society,  subject  to  the  law  of 
insurable  interest  in  the  life  of  the  member.  This  doctrine  of 
insurable  interest  has  given  rise  to  much  controversy  in  suits 
upon  ordinary  contracts  of  insurance,  but  an  extended  notice 
of  the  law  on  that  subject  is  not  necessary  in  a  work  on 
mutual  benefit  societies.  "Where  the  organic  law  of  a  societv, 
or  the  charter  procured  from  the  state  under  that  law  pre- 
scribes what  classes  of  persons  may  become  beneficiaries  of  its 
insurance,  it  is  not  in  the  power  of  the  society  or  one  of  its 
members,  or  both,  to  enlarge  or  restrict  these  classes.1  Where 
the  statutes  under  which  a  mutual  benefit  society  is  incorpo- 
rated, or  its  charter  adopted  under  such  statutes,  designate 
certain  classes  of  persons  who  may  be  the  beneficiaries  of  its 
funds,  a  person  who  does  not  belong  to  any  of  such  classes  is 
not  entitled  to  take  the  fund.  The  society  has  no  authority 
to  create  a  fund  for  a  person  who  does  not  belong  to  one  of 
such  classes,  and  the  member  has  no  power  or  right  to  desig- 

1  Kentucky  Masonic  v.  Miller's  Mutual  v.  Rolfe,  76  Mich.  146:  Hy- 
Adm*r,  13  Bush  (Ky.  |  ls'.»:  Rindge  singer  v.  Supreme  Lodge,  4:2  Mo. 
v.  Ins.  Co.,  146  Mass.  280;   Michigan    App.  62']  L3,  20,  215,  239. 

(311) 


312         WHO    MAY   BE   A    BENEFICIARY INSURABLE   INTEREST. 

nate  such  a  person  as  his  beneficiary.  Neither  the  act  of  the 
society  in  issuing  a  certificate  payable  to  such  a  person,  nor 
the  act  of  the  member  in  appointing  him,  can  deprive  the 
beneficiaries  designated  by  law  of  their  right  to,  and  interest 
in  the  fund.  The  designation  of  such  a  person  is  void,  and  in 
determining  who  is  entitled  to  the  fund,  the  question  will  be 
considered  just  as  if  no  designation  whatever  had  been  made. 
AVhen  the  charter  of  a  society  names  certain  classes  of  per- 
sons, to  whom  alone  the  benefit  fund  may  be  paid,  and  gives 
to  the  member  the  right  to  select  and  appoint  the  person  or 
persons  of  those  classes  to  whom  it  shall  be  paid,  if  no  one  is 
selected,  it  is  payable  to  one  of  the  classes  named.  And, 
where  the  member  has  named  a  person  not  within  the  class  to 
be  benefited,  and  the  corporation  has  issued  the  certificate  to 
the  person  so  designated,  these  acts  will  not  deprive  the  proper 
person  or  class  of  persons  of  the  right  to  and  interest  in  the 
fund.  Where  the  charter  provides  that  the  benefit  shall  be 
payable  to  the  "  widows,  orphans,  or  other  relatives  of  de- 
ceased members,  or  persons  dependent  upon  deceased  mem- 
bars,"  the  designation  of  a  parson  who  is  neither  related  to 
nor  dependent  upon  the  member^  will  not  deprive  his  widow, 
children  or  depen  lents  of  their  right  to  the  fund,  but  it  will 
be  paid  to  them  as  if  no  designation  had  been  made.1 

In  Ohio,  the  law  provided  for  the  organization  of  mutual 
benefit  societies  "  for  the  payment  of  stipulated  sums  of  money 
to  the  families  or  heirs  of  deceased  members."  A  certificate 
of  membership  in  a  society  organized  under  this  law  was 
issued,  payable  to  the  assured  member,  "  or  any  person  desig- 
nated by  his  will,  or  his  heirs  if  no  person  is  designated  herein, 
or  by  will."  It  was  held  that  the  assured  was  not  thereby 
authorized  to  constitute  by  testamentary  appointment,  as  bene- 
ficiary of  such  insurance,  a  person  who  was  not  of  the  family 

1  Supreme  Council  v.    Perry,    140  East.    Rep.    443;  Keener    v.    Grand 

Mass.  589;    5  N.  East.  Rep.  636;  Brit-  Lodge,  38  Mo.  App.  544;  Gibson  v. 

ton  v.  Supreme  Council,  46  N.  J.  Eq.  Society,  8  Ky.  L.  Rep.  520;  Kentucky 

102;    18    Atl.    Rep.     675;     Park    v.  Grangers  v.  McGregor,  7  Ky.  L.  Rep. 

Welch,  33  111.  App.  188;  Palmer  v.  750;    Alexander  v.    Parker,   144  111. 

Welch,  132  IU.  141;  23  N.  East.  Rep.  355;  33  N.  East.  Rep.  183;  Sargent  v. 

412;  Rindgev.  Association,  146  Mass.  Supreme  Lodge,  158  Mass.  557;  33  N. 

286;  15  N.  East.  Rep.  628;  Burns  v.  East.  Rep.  650. 
Grand  Lodge,  153  Mass.   173;  26  N. 


"WHO    MAY    BE    A    BENEFICIARY INSURABLE    INTEREST.        313 

of  the  assured,  or  who  would  not,  upon  his  death,  become  his 
heir.1  The  law  of  Michigan  authorizes  the  organization  of 
societies  to  secure  "  to  the  family  or  heirs  of  any  member  upon 
his  death"  a  certain  sum  of  mone}\  This  language  of  the  law* 
excludes  as  beneficiary  a  person  who  is  not  related  to  the 
assured,  but  who  was  an  old  army  comrade  and  intimate  friend 
living  with  him.2  Where  the  object  of  a  society  is  to  pay  the 
"  legal  heirs  and  beneficiaries  "  of  a  deceased  member  a  benefit 
fund,3  or  "  to  assist  the  widows,  orphans,  or  other  dependents 
of  deceased  members,"  *  the  designation  by  a  member  of  his 
estate  as  his  beneficiary  is  invalid  as  contrary  to  the  charter. 
A  society  incorporated  "  for  the  payment  of  stipulated  sums 
of  money  to  the  family  or  heirs  of  deceased  members  "  is  not 
authorized  to  issue  certificates  of  membership  payable  to  the 
named  beneficiary  "  or  assigns  " — "  to  himself  or  assignees  " — 
"  to  his  estate  " — "  to  his  executors  or  administrators  "  or  to 
any  person,  whether  a  relation  or  not,  who  is  not  of  his  family 
or  heirs.5  A  by-law  of  a  corporation  made  in  contravention 
of  the  terms  of  the  charter,  specifying  the  classes  of  persons 
who  may  be  made  beneficiaries,  is  ultra  vires  and  void." 

A  by-law  of  an  incorporated  society,  prescribing  how  the 
members  shall  direct  the  payment  of  the  benefit  fund,  is  not 
inconsistent  with  a  provision  of  the  charter  that  such  fund 
shall  be  paid  "  as  the  member  may  direct,"  provided  the  rule 
prescribed  by  the  society  is  reasonable  for  that  purpose.7 

§  159.  Where  the  charter  does  not  designate  who  may 
become  beneficiaries  under  a  contract  of  insurance  issued  by 
the  society,8  or  where  the  charter  provides  that  devisees  or 
legatees  of  a  deceased  member,9  or  his  assigns,10  may  be  made 

1  National    Mutual  v.    Gonser,   43  6  Briggs  v.  Earl,  139  Mass.  473:  1 

Ohio  St.  1;  1  N.  E.  Rep.  11:  State  v.  N.  East.  Rep.  847;  Bee  §§  13,  20. 

Central  Ohio  Mutual.  29  Ohio  St.  399;  7  Coleman  v.  Knights  of  Honor,  18 

State  v.  People's  Mutual,  42  Ohio  St.  Mo.  App.  189. 

579.  8  Elkhart  Mutual  v.  Houghton,  108 

8  Mutual  Benefit  v.  Hoyt.  46  Mich,  Ind.  286;  2  N.  East.  Rep.  7i»:;. 

473;  see  Britton  v.  Supreme  Council,  '  Bloomington  Mutual  v.  Blue,  120 

46  N.  J.  Eq.  102;  18  All.  Rep.  675.  111.  121;  11  N.  East.  Rep.  881 :  Lamont 

3  Basye  v.  Adams.  81  Ky.  371.  v.  Grand    Lodge.   31    Fed.   Rep  177: 

4  Daniel's   Executor  v.    Pratt,   143  Martin  v.  Stubbings,  12(1  111.   ::s::    is 
Mass.  216;  ION.  East.  Rep  106.  N.  East.  Rep  657;    Lamont  v.   Asso- 

5  State  v.  Association.   38  Oh.  St.  elation,  30  Fed.  Rep.  si 7. 

381 :  State  v.  Association,  42  Oh.  St.  ,0  Massey  v.  Association,  102  X.  Y. 
579. 


311        WHO    MAY    BE    A   BENEFICIARY INSURABLE    INTEREST. 

beneficiaries,  or  where  it  provides  that  the  fund  shall  be  pay- 
able as  the  member  may  direct,1  a  contract  may  be  issued  in 
the  first  instance  pa}rable  to  any  one  who  is  competent  to  take 
the  fund  under  the  laws  relating  to  the  insurable  interest  of 
the  beneficiary.  Where,  by  the  terms  of  the  charter  of  a  so- 
ciety, the  fund  is  payable  "  to  the  legal  heirs  or  beneficiary  of 
a  deceased  member,"  the  insured  has  the  right  to  designate 
any  person  as  his  beneficiary,  and  to  exclude  any  number  or 
all  of  his  heirs.* 

§  100.  Who  may  be  a  beneficiary  ;  the  terms  of  the  char- 
ter are  to  be  liberally  construed. — In  determining  whether 
the  beneficiary  designated  by  a  member  in  a  given  case  is 
capable  of  taking  the  fund  under  the  charter  of  the  society, 
courts  will  give  as  broad  and  comprehensive  a  meaning  as 
possible  to  the  terms  of  the  charter  in  which  the  general  ob- 
jects of  the  society  and  the  classes  of  persons  to  be  benefited 
are  set  forth.3  A.  became  a  member  of  an  incorporated 
society,  the  charter  of  which  set  forth  its  object  to  be  "  the 
maintenance  of  a  society  for  the  purpose  of  benefiting  and 
aiding  the  widows  and  orphans  of  deceased  members."  It 
was  provided  in  article  nineteen  of  its  constitution  that  the 
benefit  fund,  at  the  death  of  a  member,  should  ;'  be  paid  to 
such  person,  or  persons,  as  the  deceased  may  have  designated 
to  receive  the  same,  as  appears  on  the  books  of  the  lodge  of 
which  he  is  a  member."  A.  borrowed,  from  his  sister,  the 
amount  of  money  which  the  society  would  be  liable  to  pay  at 
his  death.  He  designated  her  on  the  books  of  the  lodge  as 
the  person  to  whom  payment  should  be  made  by  the  society, 
and  she   paid  his  dues  to  the  society.     At  the  death  of  the 

523;  7  N.  East.  Rep.  619;  34  Hun  254;  366;  13  111.  App.  510;  Mass.  Foresters 

Eckert  v.  Society,  2  N.  Y.  Supp.  612.  v.  Callahan,  146  Mass.  391;  Marsh  v. 

1  Sabin  v.  Grand  Lodge,  134  N.  Y.  Supreme  Council,  149  Mass.  512;  21 

423;  31  N.  East.  Rep.  1037;   28  N.  Y.  N.  East.    Rep.   1070;  Klotz  v.  Klotz 

Weekly  Dig. 309;  Ingersoll  v.Knights,  (Ky.),  22  S.  W.  Rep.  551. 

47  Fed.  Rep.  272;  Gentry  v.  Supreme  2  Basye  v.  Adams,  81  Ky.  368. 

Lodge,  20  Cent.  L.  J.  393;  Tennessee  3 Martin  v.  Stubbings,  126  111.  387; 

Lodge  v.  Ladd,  73  Term.  (5  Lea)  716;  18  N.  East.  Rep.    657;    Bloomington 

Barton  v.  Provident  Mutual,  63 IN.H.  Mutual  v.  Blue,  120  111.   121;   11  N. 

535;    Mitchell  v.    Grand    Lodge,   70  East.  Rep.  331 ;  Bennett  v. Van  Riper, 

Iowa,  360;  30  N.  W.  Rep.    865;  Su-  47  N.  J.  Eq.  563;    22  Atl.   Rep.  1055; 

preme  Lodge  v.  Martin,  12  Ins.  L.  J.  Masonic  Association   v.   Bunch,    109 

628;  Highland  v.  Highland,  109  111.  Mo.  560;  19  S.  W.  Rep.  25. 


WHO    MAY    BE    A    BENEFICIARY INSURABLE    INTEREST.        315 

member,  the  benefit  fund  was  claimed  by  his  sister,  and  also 
by  his  widow  and  children.  The  supreme  court  of  Pennsyl- 
vania held  that  the  amount  due  from  the  society  must  be  paid 
to  the  sister  of  the  deceased  member,  and  in  the  opinion  said  : 
"  The  learned  court  below  was  of  opinion  that  there  was  a 
fatal  conflict  between  the  charter  and  the  constitution  in  re- 
spect of  the  persons  who  may  receive  benefits  from  the  defend- 
ant company,  and  for  that  reason  alone  refused  judgment  to 
the  plaintiff  (the  sister).  The  second  section  of  the  charter, 
upon  which  this  conclusion  is  based,  is  in  the  following  words  : 
'  The  purposes  of  this  corporation  shall  be  the  maintenance 
of  a  society  for  the  purpose  of  benefiting  and  aiding  the  widows 
and  orphans  of  deceased  members.'  Const-ruing  these  words. 
the  learned  court  below  held  that  it  was  not  within  the  power 
of  the  defendant  to  stipulate  for  the  payment  of  the  benefits 
to  any  person,  other  than  the  widow  and  orphans,  who  might 
be  designated  as  the  recipient  by  the  deceased  under  article  10 
of  the  constitution.  We  think  this  is  too  narrow  and  strained 
a'  view  to  take  of  the  second  section  of  the  charter  quoted 
above.  While  it  is  true  that  the  general  purpose  of  the  corpo- 
ration is  there  stated  to  be  the  maintenance  of  a  society  for 
benefiting  and  aiding  widows  and  orphans  of  deceased  mem- 
bers, it  must  be  observed  that  this  is  only  the  statement  of  a 
general  purpose.  It  is  only  the  recital  of  an  object  sought  to 
be  accomplished,  and  which,  doubtless,  is  accomplished  in  the 
great  majority  of  cases,  even  though  in  exceptional  cases  the 
benefits  may,  by  special  contract,  be  paid  to  other  persons  than 
the  widow  or  orphans.  There  is  no  prohibitory  or  restrictive 
language  excluding  from  the  powers  of  the  corporation  the 
right  to  contract  specially  with  the  member  for  the  payment 
of  benefits  to  other  persons  than  his  widow  or  orphans.  Nor 
is  such  a  contract  to  be  held  void  by  reason  of  any  necessary 
implication  from  the  language  of  the  charter.  For  the  widow 
and  orphans  may  be  much  benefited,  ami  in  many  ways,  by  a 
contract  designating  another  beneficiary,  as.  for  instance,  if  the 
member,  in  his  lifetime,  desiring  to  establish  a  home  for  his 
wife  and  children,  which  they  might  hold  after  Ins  death,  bor- 
rowed money  for  that  purpose,  and  so  used  it.  and,  to  secure 
the  loan,  designated  the  lender  as  the  beneficiary  of  his  mem- 
bership, certainly  his  widow  and  orphans  would  be  materially 


316         WHO   MAY    BE    A   BENEFICIARY INSURABLE    INTEREST. 

benefited  by  such  an  arrangement.  Or  if,  having  a  home,  he 
met  with  disaster,  and  was  about  to  lose  it  by  judicial  sale, 
and  should  save  it  by  a  similar  provision,  his  widow  and  orphans 
would  be  thereby  benefited.  Or  if,  having  property  and  also 
debts,  but  not  to  the  point  of  insolvency,  he  could  borrow 
money  by  means  of  a  membership  with  such  an  association, 
and  he  should  become  a  member  for  that  very  purpose,  the 
creditor  possibly  paying  the  dues,  and  he  could  to  that  extent 
diminish  his  indebtedness  during  his  life,  and  thus  leave  that 
much  more  of  his  property  to  his  widow  and  orphans,  undoubt- 
edly they  would  be  thereby  benefited.  Or  he  might  borrow 
the  money  and  give  it  directly  to  his  wife  or  children  during 
his  life,  pledging  his  membership  to  the  lender  as  above,  and 
then  also  they  would  receive  the  full  advantage  of  the  trans- 
action without  waiting  until  his  death.  Many  more  illustra- 
tions of  a  similar  character  might  easily  be  suggested,  but  it  is 
unnecessary.  They  all  prove  the  same  proposition,  to  wit,  that 
it  is  entirely  possible  to  benefit  the  widow  or  orphans  by 
means  of  such  a  membership,  though  neither  of  them  is  the 
designated  beneficiary,  and  hence  there  is  no  necessary  conflict 
between  the  second  section  of  the  charter  and  the  nineteenth 
article  of  the  constitution. 

"  But  again,  the  member  may  be  unmarried,  or  he  may  have 
become  a  widower  and  without  children  during  his  life,  though 
at  the  time  his  membership  commenced,  he  may  have  had  both 
a  wife  and  children.  Surely,  in  such  a  case,  it  would  not  be 
contended  that  the  company  could  resist  payment  if  the  action 
were  brought  by  an  administrator,  even  though  the  money 
was  needed  only  for  the  payment  of  debts,  or  if  brought  by  a 
designated  beneficiary,  who  had  loaned  money  on  the  faith  of 
the  membership.  Further  discussion  does  not  seem  to  be  re- 
quired." '  The  laws  of  Michigan  provide  for  the  organization 
of  mutual  benefit  societies  to  secure  to  "  the  family  or  heirs  of 
any  member,  upon  his  death,"  a  certain  sum  of  money.  An 
old  man  became  a  member  of  a  society  organized  under  this 
act,  and  designated  as  his  beneficiary  a  young  woman  who 
was  not  related  to  him,  but  who  had  lived  with  him  for  many 
years  in  the  same  household,  and  had  been  treated  by  him  as 
if  she  were  his  daughter.     In  deciding  that  such  a  designation 

JManeely  v.  Knights  of  Birmingham,  115  Pa.  St.  305;  9  Atl.  Rep.  41. 


WHO    MAY    BE   A    BENEFICIARY INSURABLE    INTEREST.        317 

was  within  the  terms  of  the  above  law,  the  supreme  court  of 
Michigan  said:  ".Now  this  word  'family'  contained  in  the 
statute,  is  an  expression  of  great  flexibility.  It  is  applied  in 
many  ways.  It  may  mean  the  husband  and  wife  having  no 
children  and  living  alone  together,  or  it  may  mean  children, 
or  wife  and  children,  or  blood  relations,  or  any  group  consti- 
tuting a  distinct  domestic  or  social  body.  It  is  often  used  to 
denote  a  small  select  corps  attached  to  an  army  chief,  and  has 
even  been  extended  to  whole  sects,  as  in  the  case  of  the  Shak- 
ers. We  discover  nothing  in  the  statute  implying  a  narrow 
sense,  and  we  should  not  be  inclined  to  attribute  one  where 
the  result  would  cause  injustice.  It  seems  to  us  that  the  cir- 
cumstances constitute  a  case  within  the  meaning  of  the  legis- 
lature." ' 

§  161.  A  person  belonging  to  any  specified  class  may  be 
the  beneficiary. — Where  several  classes  of  beneficiaries  are 
named  in  the  charter  or  organic  law  of  the  society,  a  member 
may  take  out  a  certificate  payable  to  one  class  to  the  exclusion 
of  the  others,  or  to  a  person  of  one  class  to  the  exclusion  of 
the  other  persons  in  that  class.  He  may  determine  what  per- 
son or  persons  in  any  of  the  classes  shall  be  the  beneficiary  in 
his  particular  case.  Where  the  object  of  the  society  is  to 
afford  "aid  and  benefit  to  the  widows,  orphans,  heirs  or  devi- 
sees of  deceased  members,"  he  may  make  his  certificate  payable 
to  the  widow,  omitting  his  children,  or  to  one  of  his  children, 
omitting  the  others  and  the  widow.2  Where  the  fund  is  to 
be  paid  to  the  widow  for  the  use  of  herself  and  the  dependent 
children  of  the  deceased  member,  there  is  a  reasonable  discre- 
tion in  the  member  to  make  such  discriminations  in  the 
amounts  which  the  widow  and  each  of  the  children  shall  have 
as  will  accord  with  their  necessities.3 

§  1G2.  Effect  of  amendment  of  the  organic  law  of  a  soci- 
ety.— Where  the  law  relating  to  the  classes  of  beneficiaries 
who  may  take  the  fund  of  a  society  has  been  changed  after 
the  organization  of  the  society,  so  as  to  include  other  benefi- 

1  Carmichael    v.     Association,    51  N.    W.    Rep.    890;     see    Thomas    v. 

Mich.  494     Where  an  uncle  and  niece  Leake.   67  Texas  469;  3  S.  W.    Rep. 

lived  in  one  household,  they    were  70S;  Masonic  Mutual  v.  McAuley,  3 

held  to  constitute  a  family.    Folmer'a  Mackey  (D.  C.)  70;  Basye  v.  Adams, 

Appeal,  87  Pa.  St.  133.  81  Ky.  368. 

'Spry  v.  Williams,  82  Iowa,  61;  47       3 Roberts  v.  Roberts,  64  N.  C.  695. 


318        WHO   MAY    BE    A    BENEFICIARY INSURABLE    INTEREST. 

ciaries  than  those  first  enumerated,  the  designation  by  a 
member  of  a  beneficiary  from  an  added  class  of  beneficiaries 
is  a  designation  to  which  the  society  has  a  right  to  assent,  and 
does  assent  by  issuing  a  certificate  to  the  member  payable  to 
such  beneficiary,  with  knowledge  that  the  beneficiary  is  one 
of  the  added  class.  A  mutual  benefit  society  was  incorpo- 
rated under  a  law  providing  for  the  accumulation  of  a  fund 
"  for  the  purpose  of  assisting  the  widows,  orphans,  or  other 
parsons  dependent  upon  deceased  members."  Afterward  the 
law  was  so  amended  as  to  read  "  for  the  purpose  of  assisting 
the  widows,  orphans,  or  other  relatives  of  the  'deceased^  or  any 
person  dependent  on  deceased  members."  The  society  did  not 
adopt  the  statute  amending  the  act  under  which  it  was  incor- 
porated. A  person  who  became  a  member  after  the  amend- 
ment of  the  law  designated,  as  his  beneficiary,  his  mother,  who 
was  not  then,  or  at  any  time  afterward,  dependent  on 
him  for  support.  Subsequently  the  member  married,  and  died 
in  good  standing  in  the  society,  leaving  his  widow  and  his 
mother  surviving  him.  It  was  held,  under  these  facts,  that 
the  amending  statute  needed  no  formal  adoption  by  the  soci- 
ety, that  the  designation  of  his  mother  was  such  as  he  could 
legally  make  at  that  time,  as  the  law  which  permitted  a  rela- 
tion, merely,  not  being  necessarily  a  dependent,  to  be  desig- 
nated, was  in  force  when  he  made  his  designation,  and  that 
his  mother  was  entitled  to  receive  the  fund.1  An  act  author- 
izing- mutual  benefit  societies  to  insure  the  lives  of  members 
for  the  benefit  of  creditors  does  not  affect  a  certificate  issued 
prior  to  the  act  by  a  society  organized  under  a  prior  law,  pay- 
able to  the  creditor  of  a  member,  and  which  was  void  when 
issued.  In  order  to  make  such  a  certificate  valid,  it  must 
appear  distinctly  that  the  society  was  such  a  corporation  as 
could  avail  itself  of  the  privileges  of  that  act,  and,  if  it  could, 
that  it  had  done  so.2 

Although  a  society  may  have  the  capacity,  under  an  amend- 
ing statute,  to  enlarge  the  classes  of  persons  who  may  be  made 

1  Massachusetts  Order  v.  Callahan,  2  Skillings  v.  Association,  146  Mass. 

146  Mass.  391;  16  N.  East.    Rep.    14:  217;    15  N.    East.  Rep.  566;   see  Su- 

Marsh  v.  Supreme  Council,  149  Mass.  preme  Council  v.  Perry,   140    Mass. 

512;  21  N.  East.  Rep.  1070;   Harding  580. 
v.    Littlehale,  150  Mass.  100;    22  N. 
East.  Rep.  703;  see  §  230. 


.WHO   MAY    BE    A    BENEFICIARY INSURABLE    INTEKEST.      '319 

the  beneficiaries  of  its  insurance,  it  may  refuse  to  e::tend  its 
liability;  and  if  it  so  refuses,  a  beneficiary  appointed  from  the 
added  classes  will  have  no  right  to  the  fund.  In  such  a  case, 
the  question  is  not  what  contract  the  society  might  have  made, 
but  whit  contract  it  did  make.1  Where  a  law  providing  for 
the  organization  of  mutual  benefit  societies  is  amended  so  as 
to  exclude  certain  classes  of  persons  from  becoming  benefi- 
ciaries, the  amendment  does  not  apply  to  a  certificate  issued 
prior  to  its  passage.2 

§  162a.  Where  a  law  provides  that  no  benefit  society  shall 
issue  a  certificate  "  unless  the  beneficiary  under  said  certificate 
shall  be  the  husband,  wife,  relative,  legal  representative,  heir 
or  legatee  of  such  insured  member,"  and  a  certificate  issued 
before  the  passage  of  the  act,  in  favor  of  a  beneficiary  not  in- 
cluded in  the  above  description,  was  forfeited  for  non-payment 
of  an  assessment,  a  reinstatement  after  the  act  took  effect  did 
not  bring  the  certificate  within  the  provision  and  prohibition 
of  the  law.  The  reinstatement  was  not  the  making  of  a  new 
contract;  it  was  simply  a  cancellation  of  the  forfeiture  whereby 
the  holder  was  restored  to  membership  under  the  contract 
already  existing.3 

§  103.  When  an  unincorporated  lotl^e  may  he  the  bene- 
ficiary.— Where  the  contract  provides  that  the  benefit  fund 
shall  be  paid  to  such  person  or  persons  as  the  assured  shall  des- 
ignate, and  there  is  nothing  in  the  statutes  of  the  state  in 
which  the  contract  was  issued  restricting  the  member  in  the 
selection  of*  his  beneficiary,  an  unincorporated  lodge  which  is  a 
part  of  the  unincorporated  society  issuing  the  contract  is  a 
proper  beneficiary.4 

'Supreme  Council  v.  Smith,  45  N.  uals,  or  a  corporation  de  facto,  could 

J.  Eq.  466;  17  Atl.  Rep.  770;  Britton  not  be  designated  by  the  assured  as 

v.  Royal  Arcanum,  46  N.  J.  Eq.  102;  his  beneficiary.    He  had  become   a 

18  Atl.  Rep.  675.  member  of  a  subordinate   lodjjje,  or- 

2  Smith  v.  Pinch,  80  Mich.  332;  45  ganized  and  conducted  for  the  bene- 
N.  W.  Rep.  183.  fit  of  those  who  joined  it.     As   such 

3  Lindsey  v.  Society,  84  Iowa,  734;  member  he  had  received  a  certificate 
50  N.  W.  Rep.  29;  see  §§  291,  294  or  policy  of  insurance,  of  no  value 

4  Bacon  v.  Brotherhood,  46  Minn,  except  when  countersigned,  as  it  had 
303;  48  N.  W.  Rep.  1107.  The  court  been,  by  its  officers;  he  had  accepted 
said:  "  We  see  no  good  reason  why  and  participated  in  benefits  con- 
the  lodge  in  question,  whether  de-  ferred  upon  those  only  who  held  a 
clared  a  simple  association  of  individ-  membership,  and  by  reason  of  such 


320        WIIO   MAY    BE    A    BENEFICIARY INSURABLE    INTEREST. 

§  164.     When  a  divorced  wife  may  be  the  beneficiary. — 

It  has  been  held  in  ordinary  life  insurance  that  a  policy  orig- 
inally valid  does  not  cease  to  be  so  by  the  cessation  of  the  bene- 
ficiary's interest  in  the  life  insured,  unless  such  be  the  necessary 
effect  of  the  provisions  of  the  contract  itself ;  that  a  wife,  hav- 
ing an  insurable  interest  in  the  life  of  her  husband,  is  not  af- 
fected by  a  decree  of  divorce,  in  her  right  in  an  insurance  pol- 
icy on  his  life,  payable  to  her  by  name  or  as  his  survivor.1  In 
such  a  case  she  takes  by  contract,  and  not  by  reason  of  the  re- 
lation of  husband  and  wife,  or  by  reason  of  her  status  at  the 
death  of  the  insured.  But  if  the  policy  is  payable  to  her 
merely  under  the  designation  of  "  my  wife,"  it  would  seem 
that  the  terms  of  the  policy  itself  would  cut  off  the  interest  of 
a  divorced  wife  in  its  proceeds,  since  at  the  death  of  the  in- 
sured she  would  not  answer  the  description  of  the  designation. 
Where  the  charter  of  a  mutual  benefit  society  declares  its  ob- 
ject to  be  "  for  the  purpose  of  defraying  the  expenses  of  the 
sickness  and  burial  of  its  members,  and '  rendering  pecuniary 
aid  to  the  families  of  deceased  members,  or  to  their  heirs,"  the 
wife  of  a  member  who  has  been  designated  by  him  as  a  bene- 
ficiary, loses  her  rights  as  such  by  obtaining  a  divorce  from 
him.'2  It  has  been  held  that  when  the  contract  of  insurance 
stipulates  that  the  beneficiary  must  have  an  insurable  interest 
in  the  life  of  the  member  that  interest  must  exist  at  the  death 
of  such  member.3  Accordingly  a  divorced  wife  who  has  re- 
married, and  has  no   living  issue  by  the  member,  is  not,  under 

membership;  and  when  called  upon  field  v.  Turner,  75  Texas,  324 ;  12  S. 
to  designate  a  party  to  whom  the  W.  Rep.  626  ;  Heyman  v.  Meyerhoff, 
amount  of  his  policy  should  be  paid  16  W.  N.  C.  (Pa.)  212.  In  Tyler  v. 
in  case  of  his  death,  had  named  the  Association,  the  court  declined  to  de- 
lodge.  The  assured,  under  such  cir-  cide  whether  the  validity  of  a  de- 
cumstances,  could  not  have  ques-  scription  is  to  be  determined  at  the 
tioned  the  capacity  of  such  body  to  outset  by  the  relation  then  existing 
take  under  his  designation,  and  it  between  the  member  and  the  bene- 
foliows  that  one  who  claims  under  ficiary,  but  held  that  to  make  the  de- 
him  can  not."  scription  available  at  the  death,  there 

1  Bliss  on  Life  Ins.  at  §  30;  May  on  must  then  be  such  a  relation  to  the 
Ins.at§107;Conn.Mutualv.Schaefer,  deceased  as  is  contemplated  by  the 
94  U.  S.  457;  Phoenix  Ins.   Co.    v.  contract  of  the  society. 
Dunham,    46  Conn.  79;    McKee  v.  3  But  see  Dalby  v.    Ins.  Co.,   15  C. 
Ins.  Co.,  28 Mo.  383.  B.   365;  Conn.  Mutual   v.  Schaefer, 

2  Tyler  v.    Association,    145  Mass.  94  U.  S.  457. 
134;    13    N.   East.  Rep.  360;  Schon- 


WHO  MAY  BE  A  BENEFICIARY INSURABLE  INTEREST.    321 

such  a  contract,  entitled  to  the  benefit  fund.1  When  the 
status  of  the  beneficiary  under  the  contract  is  the  main,  if 
not  the  sole  inducement  to  the  insurance,  as  where  the  certifi- 
cate is  in  favor  of  the  wife  of  the  member  and  she  is  desig- 
nated mainly  by  that  relationship  and  description,  the  rights 
of  such  beneficiary  lapse  if  that  status  does  not  exist  at  the 
time  of  the  death  of  the  member.2 

Where  the  common  law  is  in  force  a  divorce  a  mensa  et 
thoro  does  not  change  the  property  rights  of  the  parties.  Its 
only  effect  is  to  compel  the  parties  to  live  apart,  and  to 
deprive  the  husband  of  his  control  over  his  wife.  On  the 
death  of  the  husband  after  a  decree  a  mensa  et  thoro,  the  wife 
becomes  his  widow,  and,  as  such,  succeeds  to  all  the  rights  in 
his  property,  which  the  law  gives  to  a  widow  in  the  property 
of  her  deceased  husband;  and  where  she  was  made  the  bene- 
ficiary of  his  life  insurance  before  such  a  divorce,  she  is  after 
his  death  a  proper  beneficiary,  even  when  the  benefits  are  by 
law  restricted  to  "  the  widows,  orphans,  or  other  persons  de- 
pendent upon  deceased  members." 3  A  divorced  wife  is  enti- 
tled to  no  share  in  a  benefit  fund  payable  to  the  member's 
heirs.4 

1  Order  v.  Koster,  55  Mo.  App.  186.        4  Schonfleld  v.  Turner,  supra;  Ty- 

2  Order  v.  Koster.  supra.  ler  v.  Association,  supra, 

3  Supreme  Council  v.  Smith,  45  N. 
J.  Eq.  466;  17  Atl.  Rep.  770. 

21 


CHAPTEK  XI. 

WHO  MAY  BE  BENEFICIARY— ASSIGNEE  OF  CONTRACT— PART  II. 

§  165,  166.     When  the  contract  of  mutual  benefit  insurance  is  assignable. 

167.  Equitable  assignment. 

168.  Limitation  on  the  right  to  assign. 

169.  The  consent  and  approval  of  the  society  may  be  required. 

170.  Rights  of  tbe  assignee  of  a  certificate. 

171.  Assignment  after  death  of  the  member. 

172.  Assignment  by  the  beneficiary. 

173.  Designation  of  new  beneficiary  is  not  an  assignment  of  the  cer- 

tificate. 

174.  Law  governing  the  validity  of  an  assignment. 

§  165.  When  the  contract  of  mutual  benefit  insurance 
is  assignable. — Where  a  certificate  of  membership  is  made 
payable  to  the  member  himself,  his  legal  representatives,  his 
executors  and  administrators,  or  his  estate,  as  is  permitted  by 
the  organic  law  of  mutual  benefit  societies  in  some  states,  he 
may  assign  the  certificate,  provided  the  assignment  is  made  in 
good  faith,  and  provided  further  that  in  doing  so  he  does  not 
violate  the  contract  of  insurance,  or  the  law  of  the  state  in 
which  the  assignment  is  made.1     But  where  the  statute  under 

1  It  is  a  point  upon  which  the  au-  282;  52  Am.  Dec.  782,  and  note;  Mil- 

thorities  are  in  irreconcilable  conflict,  ner    v.    Bowman,    119  Ind.    448;    21 

whether  a  life  insurance  policy,  valid  N.  East.  Rep.  1094. 

in  its  inception,  supported  by  a  suffi-  There  are  other  cases  in  which  the 

cient  insurable  interest,  may,  before  opposite  doctrine  is  held.      Lyon  v. 

a  loss  occurs,  be  assigned  to  one  who  Rolf e  (Mich.),  42  N.   W.    Rep.  1094; 

has  no  interest  in  the  life  assured.    It  Cammack    v.   Lewis,    15  Wall.    643; 

has  been  held  that  such  an  assign-  Warnock  v.  Davis,  104  U.  S.  775;  11 

ment,  if  made  in  good  faith  and  not  Fed.  Rep.  527;  Franklin  Ins.  Co.  v. 

prohibited  by  the  terms  of  the  con-  Hazzard,  41  Ind.  116;  13  Am.  Repts. 

tract,  is  valid.     Olmsted  v.  Keys,  85  313;  Franklin  Ins.  Co.  v.  Sefton,  53 

N.  Y.  593;  Clark  v.  Allen,  11  R.  I.  Ind,  380,  explaining  Hutson  v.  Merri- 

439;  17  Am.  L.  Reg.  (N.  S.)  83  and  field,  51  Ind.  24;  see  Kessler  v.  Kulms, 

note;  Fairchild  v.  Assurance  Co.,  51  1  Ind.  App.  511;  27  N.  East.  Rep.  980; 

Vt.  613-624;  Ashley  v.  Ashley,  3  Sim.  Stevens  v.  Warren,    101   Mass.    564; 

149;  Succession  of  Hearing,   26  La.  Langdon  v.  Union  Mutual,  14  Fed. 

Aim.  326;  Palmer  v.  Merrill,  6  Cush.  Rep.  272;  Missouri  Ins.  Co.  v.  Sturges, 

(322) 


ASSIGNEE    OF   CONTRACT.  323 

which  such  a  society  is  organized  specifies  certain  classes  of 
beneficiaries  who  shall  take  the  fund,  a  certificate  of  member- 
ship is  not  assignable,  during  the  life  of  a  member  to  whom  it 
has  been  issued,  to  a  person  not  within  the  classes  named  as 
the  beneficiaries  of  the  society.  Persons  who  are  not  capable 
of  taking  the  fund  by  designation  as  beneficiaries  in  the  first 
instance  can  not  take  it  indirectly  by  assignment  of  the  cer- 
tificate. These  societies  are  intended  to  render  assistance  to 
the  designated  classes  of  persons,  in  a  particular  and  special 
method,  and  their  purpose  would  be  defeated  by  permitting 
assignments  of  certificates  to  be  made  to  other  persons.1  The 
charter  of  a  society  provided,  "  The  business  of  said  association 
shall  be,  to  afford  relief  to  the  widows  and  children  of  its  de- 
ceased members,  and  to  such  business  it  shall  be  limited  and 
restricted."  A  policy  issued  by  the  society  was  made  payable 
to  the  wife  of  the  member,  and,  in  case  of  her  death  prior  to 
his,  to  his  children.  Afterward,  the  member  became  indebted 
to  the  society  in  a  large  sum  of  money,  and  assigned  his  policy 
to  it  as  collateral  security  for  the  debt.  In  an  action  on  the 
policy  by  the  children,  it  was  held  that  this  assignment  was 
void,  as  being  in  violation  of  the  charter  of  the  society,  and  in 
contravention  of  the  sole  objects  and  benevolent  purposes  for 
which  it  was  organized.2  A  statute  authorized  the  formation 
of  societies  for  the  purpose  of  rendering  assistance  to  the 
widows,  orphans,  or  other  dependents  of  deceased  members. 
A  member  of  a  society  organized  under  this  act  took  out  a 
certificate  payable  to  his  wife.  Afterward  he  and  his  wife 
together  executed  and  delivered  to  a  creditor,  as  collateral  se- 
curity for  certain  debts,  an  assignment  of  all  their  right,  title 

18  Kan.  93;  26  Am.  Rep.  701.     Many  fund  to  such  purchaser,  no  stranger 

of  the  cases  just  cited  are  reviewed  or  volunteer  can  assail  the  validity  of 

in  Mutual  Life  Insurance  Co.  v.  Al-  the  payment,  even  though  the  sale  he 

leu.  188  Mass.  24;  Price  v.  Supreme  against  public  policy. 

Lodge,  68  Texas.   306;  4  S.  W.  Rep.  Stoelker  v.  Thornton.  88  Ala.  341; 

688;  Schonfield  v.  Turner,  75  Texas,  6  Southern  Rep.  680;  see  Jackson  v. 

384;  L2  8.  W.  Rep.  626.     Where  the  Anderson  (Ky.),  8  8.  W.  Rep.  326. 

Bociety  recognizes  the  validity  of  an  'Bay Be  v.  Adams, 81  Ky.  868;  §§  L3, 

assignment  by  issuing  a  new  oertifi-  2t>.  158,  159. 

cate,  in  which  the  purchaser  is  named  -Dietrich  v.  Madison  Relief  Ass'n, 

as  the    beneficiary,   and.   upon    the  45  Wis.  79. 
death  of  the  assured  pays  the  benefit 


324:  ASSIGNEE    OF    CONTRACT. 

and  interest  in  this  certificate.  The  court  held  that  the  as- 
signment was  contrary  to  the  charter  and  invalid.1 

Where,  by  the  terms  of  the  charter  of  a  society,  the  benefit 
fund  was  payable  to  the  "  legal  heirs  or  beneficiary  of  a  deceased 
member,"  and  a  member  had  designated  a  beneficiary,  and  af- 
terward, for  an  existing  debt  and  a  certain  sum  in  cash,  had 
assigned  the  certificate,  it  was  held  that  the  assignee  was  not 
entitled  to  the  fund,  for  whatever  right  or  interest  he  acquired, 
if  any,  he  took  by  virtue  of  the  contract  of  assignment,  and 
not  as  a  designated  beneficiary." 

§  166.  The  statute  under  which  a  society  was  organ- 
ized, provided  for  the  formation  of  corporations  for  the  pur- 
pose of  furnishing  "  life  indemnity  or  pecuniary  benefits  to 
the  widows,  orphans,  heirs,  or  relatives  by  consanguinity  or 
affinity,  devisees  or  legatees  of  deceased  members,"  and 
its  constitution  provided  that  a  member  might  change  his 
beneficiary  at  pleasure  without  the  latter's  consent.  It  was 
held  that,  as  a  creditor  was  capable  of  becoming  a  benefici- 
ary as  legatee  of  the  member,  an  assignment  of  the  certificate 
by  the  member  in  his  lifetime  to  the  creditor  as  security 
ior  the  debt  was,  under  the  contract,  valid  and  binding  upon 
both  the  beneficiary  and  the  society." 3     In  Lamont  v.  Associa- 

1  Briggs  v.  Earl,  139  Mass.  473;  1  N.  other  persons  not  within  the  purposes 

East.  Rep.  847.     But  after  the  death  of  the  statute.     Aiken  v.  Association, 

of  the  member  the  right  of  the  bene-  13  N.  Y.  Supp.  579;  see  §§  169,  171. 

ficiary  to  the  fund  raised  by  an  assess-  2  Basye  v.  Adams,  81  Ky .  368. 

ment  upon  the  surviving  members  3  Martin  v.  Stubbings,  126  III.  387; 

becomes  vested,  and  the  fund  is  sub-  18  N.  East.  Rep.  657.     In  Blooming- 

ject  to  his  absolute    disposal;    and  ton  Mutual  v.  Blue,  120  111.  121,  the 

where  the  beneficiary,  who  is  also  the  controversy    was    between    the    so- 

widow  of  the  deceased  member,  as-  ciety  and  the  beneficiary  named  in 

serts  the  validity  of  an  assignment  the  certificate.     The  society  denied 

made  by  him  in  his  lifetime  as  col-  its  liability  on  the  ground  that  the 

lateral  security  for  a  loan,  the  asso-  beneficiary  named  was  not  within 

ciation  can  not  defend    an    action  the  classes  enumerated  in  its  organic 

brought  against  it  by  the  assignee  on  law.     In  the  case  just  cited  the  so- 

the  ground  that  the  statute  under  ciety  admitted  its  liability,  and  the 

which  it  was  incorporated,  strictly  controversy  over  the   fund  was  be- 

limits  its  purposes  to  giving  aid  to  tween  the  widow,  who  was  the  desig- 

widows    and    orphans    of    deceased  nated  beneficiary,  and  the  assignee, 

members,  or  other  persons  dependent  who  was  the  creditor  of  the  deceased 

on  them  for  support,  and  renders  void  member.     Under  the    authority    of 

all  assignments  made  during  the  life-  Bloomington  Mutual  v.  Blue,  supra, 

time  of  the  member  to  creditors  or  the  creditor  was  a  proper  beneficiary, 


ASSIGNEE    OF   CONTRACT. 


325 


tion,  the  court  held  that  where  the  articles  of  association  and 
by-laws  of  a  society  organized  under  the  same  statute  above 
quoted,  make  the  benefits  payable  to  the  person  designated 


and  as  no  manner  or  mode  of  chang- 
ing the  beneficiary  was  specified  in 
the  contract  in  this  case,  the  member 
had  a  right  to  make  the  change  in 
any  manner  he  chose.  See  \  214.  In 
Martin  v.  Stubbings,  supra,  the  court 
said:  "  It  is  clear  that  the  statute,  by 
empowering  a  member  to  name  as 
his  beneficiary  his  legatee  or  devisee, 
without  restriction,  proceeds  upon  a 
policy  much  broader  than  do  those 
statutes  which  limit  the  benefits  to 
accrue  upon  the  death  of  the  mem- 
ber to  his  relatives  or  those  in  some 
way  dependent  upon  him.  Under 
the  name  of  legatee  or  devisee  the 
member  is  given  the  power  to  ap- 
point as  his  beneficiary  any  person, 
however  related  to  him,  or  not  related 
to  him  at  all.  He  may,  in  the  selec- 
tion of  his  beneficiary,  be  governed 
by  considerations  of  affection  or  duty, 
or  he  may  yield  to  the  dictates  of 
mere  caprice,  subject  only  to  the  lim- 
itation that  the  appointment  be  made 
by  will.  The  legislature  having 
thus  enlarged  the  categoiy  of  those 
capable  of  being  selected  as  benefi- 
ciaries so  as  to  include  all  persons 
whom  the  member  may  see  fit  to 
select  as  his  legatees  or  devisees,  we 
can  perceive  no  substantial  rule  of 
public  policy  which  would  be  vio- 
lated by  the  adoption  of  a  different 
mode  of  selection  of  a  beneficiary. 
No  substantial  rights  of  any  parly 
are  I  letter  secure<  1  or  protected  by  one 
mode  of  appointment  than  03  another. 
The  mode  of  selection  is  paere matter 
of  form  and  does  imt  go  to  the  sub- 
stance of  the  right  to  select  heneli- 
eiaries.     We  are  aware  that  upon  the 

general  proposition  we  are  discussing 

the  decisions  of  the  courts  are  not 
altogether     harmonious,    and     that 


some  courts  of  high  respectability 
have  reached  a  different  conclusion. 
Those  decisions,  bowever,  so  far  as 
we  have  been  able  to  examine  them, 
seem  to  be  based  upon  statutes  essen- 
tially different  from  ours.  Thus 
Briggs  v.  Earl,  139  Mass.  473,  was  a 
case  arising  under  a  membership  cer- 
tificate where  the  purposes  for  which 
the  society  could  be  formed  were 
strictly  limited  by  statute  to  render- 
ing assistance  to  the  widows  and  or- 
phans of  deceased  members  and  the 
persons  dependent  upon  them.  It 
was  there  held  that  an  assignment  of 
the  membership  certificate  as  secu- 
rity for  a  debt  was  invalid.  In  Diet- 
rich v.  Association,  45  Wis.  79,  the 
charter  of  the  association  declared 
that  its  business  should  be  to  afford 
relief  to  the  widows  and  children  of 
deceased  members,  and  that  to  such 
business  it  should  be  limited  and  re- 
stricted; and  it  was  held  that  an  as- 
signment by  a  member  of  his  mem- 
bership certificate  to  the  association, 
to  secure  a  debt  which  he  owed  to  it, 
was  void,  by  reason  of  the  want  of 
authority  in  the  association  to  take  it. 
Authorities  of  the  class  to  which  the 
foregoing  belong  manifestly  have  no 
application  here.  The  assignment  of 
the  certificate  of  membership  to  a 
creditor  is  not  within  the  strict  lit- 
ter of  the  statute:  but,  in  the  absence 
of  all  negative  words  forbidding -the 
ap|>ointment  of  a  beneficiary  in  any 
other  mode  than  the  one  prescribed, 
the  assignment  to  him  is  not  neces- 
sarily unlawful  and  therefore  void 
He  was  a  person  capable  under  the 
statute  of  becoming  a  beneficiary, 
and  the  absolute  right  of  naming  him 
a-  such  was  in  the  member.  His 
failure  to  adopt  the  mode  prescribed 


326  ASSIGNEE    OF    CONTEACT. 

by  the  member  in  his  application  for  membership,  or  in  his 
last  will  and  testament,  it  is  competent  for  such  member  by 
his  own  act,  and  with  the  consent  of  the  society,  at  any  time 
before  his  death,  without  the  formalities  of  a  will,  to  make  a 
transfer  and  assignment  of  the  benefit  fund  from  the  origi- 
nal beneficiary  named  to  any  other  person  he  may  select.1 

§  167.  Equitable  assignment, — Where,  under  the  con- 
tract, the  member  may  assign  his  certificate,  a  parol  assign- 
ment accompanied  by  delivery,  will  vest  in  the  assignee  an 
equitable  right,  at  least,  to  the  fund.  Assignments  of  written 
contracts  are  usually  made  in  writing,  but  a  merely  verbal  as- 
signment and  delivery  gives  to  the  assignee  an  equitable  right, 
when  the  contract  contains  no  provision  to  the  contrary.  An 
assignment  need  not  be  in  writing  or  in  any  particular  form 
of  words,  if  a  consideration  or  an  executed  gift  is  proved,  and 
the  meaning  of  the  parties  appears.2  But  the  intention  of  the 
member  to  clothe  the  assignee  with  his  rights  in  the  contract 
must  clearly  appear  in  such  a  case.3  It  was  held  that  there  was 
an  equitable  assignment  of  the  certificate  in  the  following- 
case  :     A  member   of  a  society  was   insured  in   the   sum  of 

by  the  statute, — that  is,  by  executing  act  he  revoked  the  appointment  of 
a  will  making  his  creditor  his  lega-  Mrs.  Martin  as  a  beneficiary  to  the 
tee, —  was  doubtless  a  matter  to  same  extent.  She,  being  no  longer  a 
which  the  society  could  probably  ob-  beneficiary,  has  no  interest  which 
ject;  but  the  beneficiary  named  had  can  give  her  a  standing  to  contest 
no  rights  in  the  certificate  which  the  validity  of  the  assignment  to 
would  justify  her  in  interposing  an  the  creditor;  and  the  society  having 
objection.  She  was  to  all  intents  and  recognized  the  validity  of  said  as- 
purposes  a  stranger  to  the  transac-  signment,  and  professed  a  willing- 
tion.  Her  rights  could  arise  only  ness  to  pay  the  money  to  him,  there 
upon  the  death  of  the  member,  and  was  no  error  of  which  Mrs.  Martin 
then  only  in  case  he  had  wholly  can  complain  in  the  decree  of  the 
failed  to  make  a  valid*  and  effectual  court  ordering  such  payment  to  be 
appointment  of  another  beneficiary   made." 

in  her  place.  The  power  of  designat-  '30  Fed.  Rep.  817;  see  Blooming- 
ing  his  beneficiaries  being  wholly  ton  Mutual  v.  Blue,  120  111.  121;  see 
under  his  control,  he  had  the  power   §§  178,  235. 

of  determining  who  should  not,  as       2  Scott  v.  Dickson,  108  Pa.  St.  6 
well  as  who  should,  be  such  benefi-   Chapman  v.  Mcllwrath,  77  Mo.  38 
ciaries.     In  making  the  assignment   St.   John  v.   Ins.  Co.,  13  N.  «Y.  31 
of  the  certificate  to  the  creditor,  he   Marcus  v.  Ins.  Co.,  68  N.  Y.  625;  May 
appointed  him  to  receive  the  benefit   on  Insurance,  §§  389,  395. 
to  accrue  at  his  death  to  the  extent       3  Palmer  v.  Merrill,  6  Cush.  (Mass.) 
of  the  debt  due  him,  and  by  the  same    282;  see  §  214. 


ASSIGNEE    OF   CONTRACT.  327 

82.500.  The  by-laws  provided  that  this  sum  might  be  dis- 
posed of  by  will,  and  if  not  so  disposed  of,  should  belong  to 
and  be  paid  to  his  widow,  or  in  case  he  had  no  widow,  then 
to  his  legal  heirs  or  representatives.  The  member  by  his  will 
gave  the  fund  to  his  two  daughters,  and  this  will  remained  in 
existence  unrevoked  at  the  time  of  his  death.  About  live 
months  before  his  death,  he  wrote  to  his  wife,  telling  her  that 
assessments  upon  his  certificate  were  due,  in  the  amount  of 
$38,  and  that  if  she  would  pay  the  assessments  and  keep  them 
paid  up,  the  policy  should  be  hers.  In  the  letter  he  enclosed 
the  following  writing :  "  San  Diego,  Cal.,  Dec.  11,  1877. 
Know  all  men  by  these  presents,  that  this  is  my  wish,  made 
in  sound  mind,  that  I  revoke  ail  former  life  insurance  policies, 
and  do  this  day,  Dec.  11,  1877,  make  my  policy  of  the  Con- 
ductor's Life  and  Benefit  Association  read  for  the  benefit  of 
Mrs.  M.  A.  Swift  in  case  of  my  death,  and  for  her  special 
benefit  all  that  may  be  derived  therefrom.  Clark  Swift." 
Upon  the  receipt  of  this,  Mrs.  M.  A.  Swift,  his  wife,  paid  up 
the  assessments,  and  soon  afterward  the  member  died.  The 
court  held  that  these  writings,  in  connection  with  the  action 
of  his  wife,  accomplished  a  transfer  or  assignment  to  his  wife 
of  all  interest  in  the  contract  of  insurance.1 

A  member  who  has  received  a  certificate  payable  to  his  heirs, 

1  Swift  v.  Association,  96  111.  309.  had  no  power  to  appoint  a  benefi- 
Mulkey.  J.,  dissented  from  the  rea-  ciary  in  any  other  manner  than  that 
soiling  and  conclusion  of  the  opinion,  specified  in  the  by-laws.  The  pay- 
and  placed  his  decision  on  very  ten-  ment  by  her  of  assessments,  though 
able  grounds.  The  fund  did  not  be-  made  in  good  faith,  gave  her  no  lit!. 
long  to  the  member.  He  could  con-  to  the  contract  of  insurance.  De 
trol  its  direction  in  the  method,  and  Jonge  v.  Goldsmith,  86  N.  Y.  614. 
to  the  extent  provided  in  the  by-  The  advancement  of  assessments  un- 
laws. He  had  designated  his  chil-  der  the  circumstances  gave  to  the 
dren  as  his  beneficiaries,  and  they  wife  an  equitable  lien  on  the  fund 
had  a  right  to  the  fund  at  his  death,  for  the  amount  paid  by  her.  hut  she 
unless  he  bad  made  a  change  in  ac-  was  entitled  to  nothing  more.  Dut- 
cordance  with  the  contract  of  insur-  ton  v.  Willner,  52  N".  V.  312;  Xa- 
ance.  He  could  have  made  his  wife  tional  Mutual  v.  Lupoid,  101  Pa.  St. 
his  beneficiary  by  later  testamentary  111;  Meier  v.  Meier.  15  Mo.  App.  68; 
appointment,  or  by  merely  revoking  WeiBert  v.  Muehl.  si  Ky.  3:36;  Unity 
his  will  and  leaving  the  beneficiary  Mutual  v.  Dugan,  118  Mass.  319; 
to  be  designated  by  the  by-law  above  Price  v.  Supreme  Lodge,  <">*  Texas 
referred  to,  but  under  the  contractile  361:  4  S.  W.  Hep.  633;  Conn.  Ins.  Co. 
had  no  interest  or  estate  in  it,  or  in  v.  Burroughs,  34  Conn.  303. 
the  fund,  to  be  paid  at  his  death,  and 


328  ASSIGNEE   OF    CONTRACT. 

administrators  or  executors,  may  assign  it  by  parol  to  the 
mother  of  his  illegitimate  child,  for  its  support.1  A  husband 
may  make  a  gift  to  his  wife  of  an  insurance  policy  payable  to 
himself,  by  delivery  of  the  possession  thereof,  accompanied  by 
such  language  as  indicates  an  intention  to  part  not  only  with 
his  possession,  but  also  with  his  property  in  the  policy,  but,  as 
has  been  said,  the  intention  to  clothe  her  with  his  rights  in 
the  contract  must  clearly  appear.  The  holder  of  an  accident 
ticket  payable  to  himself,  as  he  was  leaving  home  for  a 
journey,  laid  it  on  the  table  in  front  of  his  wife,  saying  to 
her  that  "  she  should  take  it  and  take  care  of  it,  and  if  he  got 
killed  before  he  got  back,  she  would  be  that  much  better  off — 
three  thousand  dollars  better  off."  He  was  accidentally  killed 
the  next  day,  and  his  wife  claimed  the  insurance  money,  which 
had  been  paid  to  the  administrator  of  his  estate.  But  the  court 
held  that  these  facts  were  insufficient  to  establish  a  gift  of  the 
ticket  to  his  wife,  as  against  the  creditors'  of  his  estate;  that 
in  order  to  establish  such  a  gift,  it  was  necessary  to  prove 
that  he  had  intended  to  part  with  both  the  possession  of  and 
his  property  in  the  ticket.2 

§  168.  Limitation  on  the  right  to  assign. — Where,  by  the 
charter  of  a  society  the  benefit  fund  is  payable  to  the  assigns 
of  the  member,  no  limitation  or  condition  may  be  placed  upon 
the  right  of  the  member  to  assign  his  certificate.3  But  a  by- 
law of  such  a  society  is  not  inconsistent  with  the  charter, 
which  provides  that  such  an  assignment,  in  order  to  be  valid, 
shall  be  recorded  in  the  books  of  the  society.  This  is  not  a 
limitation  upon  the  right  to  assign;  it  is  a  reasonable  pro- 
vision for  the  protection  of  the  society,  and  relates  merely  to 
the  manner  of  the  assignment."  Where  the  charter  is  silent 
as  to  the  assignment  of  a  certificate,  the  society  may  provide 
in  its  by-laws  or  certificate  for  its  assignment  to  proper  bene- 
ficiaries, and  may  place  upon  its  assignment  such  limitations 
and  conditions  as  it  may  deem  proper. 

1  Brown  v.  Mansur,  64  N.  H.  39;  5  8  Raub  v.  Masonic  Mutual  Relief 
Atl.  Rep.  768;  2  N.  Eng.Rep.  857.         Association,  3  Mackey(D.  C.),  68;  see 

2  Williams'  Appeal,  106  Pa.  St.  116;   §g  13,  20,  158,  159. 

Linsenbigler    v.    Gourley,    6    P.  F.       4  Coleman  v.  Knights  of  Honor,  18 

Smith,   166;    Crawford's  Appeal,  11    Mo.  App.  189. 

P.  F.  Smith,  52;  Trough's  Estate,  25 
P.  F.  Smith,  115. 


ASSIGNEE   OF   CONTRACT.  329 

§  1G9.     The  consent  and  approval  of  the  society  may  he 

required. — A  society  may  provide  that  its  contract  of  insur- 
ance may  be  assigned  and  transferred  only  with  the  consent 
of  the  society  indorsed  thereon.  In  som3  cases  it  is  held  that 
one  to  whom  such  a  contract  has  been  assigned  without  such 
indorsement  can  not  maintain  an  action  against  the  society, 
after  the  death  of  the  insured.1  A  society  issued  a  benefit 
certificate  which  provided  that  no  assignment  thereof  should 
be  valid  unless  approved  by  the  secretary  of  the  society.  The 
member  assigned  it  without  such  approval,  and  the  court  held 
the  assignment  invalid.2  The  right  of  the  contracting  parties 
to  thus  prohibit  an  assignment  of  the  certificate  without  the 
consent  of  the  society,  can  not  be  seriously  doubted;  and  in 
view  of  the  restricted  nature  of  mutual  benefit  insurance,  the 
propriety,  if  not  the  necessity,  of  such  a  condition  is  equally 
clear.  The  personal  character  of  each  holder  of  a  certificate, 
and  the  interest  he  may  have  in  the  life  of  the  person  thereby 
insured,  are  essential  elements  in  the  contract  of  mutual  in- 
demnity. The  obvious  tendency  of  an  unrestricted  right  to 
transfer  would  be  to  create  interests  directly  hostile  to  those  of 
the  regular  membership.  It  is,  therefore,  clear  that  the  con- 
dition is  an  essential  feature  of  the  contract,  and  the  society 
has  a  right  to  insist  on  the  benefit  of  the  protection  which  the 
condition  was  intended  to  afford  it.3  It  has  also  been  held 
that  if  the  contract  of  insurance  contains  a  clause  declaring 
that  it  may  be  assigned  only  on  the  written  approval  of  the 
society,  but  does  not  declare  that  a  violation  of  the  provision 
shall  avoid  the  contract,  such  a  violation  docs  not  involve  a 
forfeiture,  and  an  assignee  may  enforce  the  contract,  although 
the  society  has  not  consented  to  the  assignment/  A  clause  in 
a  certificate,  providing  for  its  forfeiture  if  assigned  without 
the  consent  of  the  society,  applies  only  to  an  assignment  lie- 
fore  the  death  of  the  member,  and  can  not  prevent  an  assign- 
ment by  the  beneficiary  of  the  benefit  fund  after  his  death.' 

'National  Mutual   v.   Lupoid,  101  97;  N.  Y.  Ins.   Co.  v.  Flack.    3  Md. 

Pa.  St.  Ill;  Ins.  Co.  v.  Watson,  30  341;  Risley's  Succession,  11  Rob. (La.) 

Fed.  Rep.  653;  Ins.  Co.  v.  Hamilton,  298. 

5  Sneed  (Tenn.)  209:  Moise  v.  Mutual  3  National  Mutual  v.  Lupoid,  supra. 

Reserve,   45   La.  Ann.;    13  So.   Rep.  *  Marcus  v.  Ins.  Co.,  68   N,  V.  625, 

170.  6  Roger  Williams   Ins.   Co.  v.  Car- 

8  Harmon  v.  Lewis,  24  Fed.    Rep.  rington,  43  Mich.  252;  Dogge  v.  Ins. 


330  ASSIGNEE    OF    CONTRACT. 

Such  a  clause  may  be  waived  by  the  society,  and  the  declara- 
tions and  acts  of  its  agents  are  competent  as  evidence  of  a 
waiver.1  The  mere  written  receipt  of  the  society,  given  to  one 
who  is  in  fact  the  assignee  of  a  certificate,  for  the  payment  by 
him  of  an  assessment  after  the  death  of  the  member,  is  not, 
of  itself,  evidence  that  the  society  had  recognized  him  as  the 
assignee  of  the  certificate  and  had  waived  such  a  provision.2 
Where  the  certificate  provides  that  it  may  not  be  assigned 
without  the  consent  of  the  society,  the  society  alone  may 
object  to  the  want  of  consent  and  approval  of  an  assignment. 
If  it  recognizes  the  equitable  right  of  the  assignee,  the  bene- 
ficiary can  not  insist  upon  an  objection  which  the  society  has 
waived,  and  the  proceeds  of  the  policy  must  be  distributed 
according  to  the  equities  of  the  parties.3 

§170.  Rights  of  the  assignee  of  a  certificate. — A  person 
accepting  by  assignment  from  a  member  a  certificate  of  mem- 
bership in  a  mutual  benefit  society,  is  bound  by  the  provisions 
and  conditions  of  the  constitution  and  by-laws  of  the  society 
relating  to  the  contract  of  insurance ;  and  this  is  especially 
true  when  the  constitution  and  by-laws  are  made  a  part  of  the 
certificate  by  its  express  terms.4  When  the  society  has  con- 
sented to  the  assignment  of  the  contract  of  insurance  it 
becomes  in  substance  a  new  and  binding  contract  with  the  as- 
signee on  the  basis  of  the  old  one.  A  void  contract  is  not 
rendered  valid  by  a  mere  assignment  approved  by  the  society. 
Such  an  assignment  and  approval  do  not  create  any  new 
rights,  but  simply  transfer  subsisting  ones.  If  the  society, 
when  it  consents  to  the  transfer,  is  aware  of  the  invalidity  of 
the  contract,  that  fact  may  be  shown  as  evidence  of  a  waiver 
of  its  invalidity,  but  assent  to  an  assignment,  given  in  igno- 
rance of  the  truth,  can  not  be  regarded  as  affecting  the  society 
adversely.6  When  the  assent  of  a  society  has  been  fairly  pro- 
Co.,  49  Wis.  501;  Combs  v.  Ins.  Co.,  4 Miller  v.  Assurance  Association, 
32  N.  J.  Eq.  512;  Aiken  v.  Associa-  42  N.  J.  Eq.  459;  7  Atl.  Rep.  895; 
tion,  13  N.  Y.  Supp.  579;  see  note  to  Ins.  Co.  v.  Garland,  108  111.  220;  9 
§  165.  111.  App.  571. 

1  Pierce  v.  Ins.  Co.,  50  N.  H.  297.       5 Eastman  v.  Ins.  Co.,  45  Me.  307. 

2  National  Mutual  v.  Lupoid,  supra.   Merrill  v.  Ins.  Co.,  48  Me.  285. 

3  Brown  v.  Mansur,  64  N.  H.  39;  5 
Atl.  Rep.  768;  see  Diffenback  v. 
Vogeler,  61  Md,  370. 


ASSIGNEE    OF    CONTRACT.  331 

cured  and  unreservedly  given  to  an  assignment  of  a  certificate 
it  may  not  be  withdrawn  against  the  will  of  the  assignee.1  A 
stipulation  in  a  policy  payable  to  one  or  his  assigns,  providing 
that  a  claim  "  by  an  assignee  shall  be  subject  to  proof  of  in- 
terest," does  not  apply  to  one  who  holds  it  as  collateral  secu- 
rity for  a  debt,  since  the  assignee  is  a  mere  trustee  for  the 
debtor,  and  must  account  for  any  surplus  proceeds  after  pay- 
ing the  debt  and  it  is  not  necessary  for  such  assignee  to  allege 
that  he  had  an  insurable  interest  in  the  life  of  insured.2 

§  1 71.  Right  to  assign  the  benefit  fund  after  the  death 
of  the  member. — After  the  death  of  the  member,  when  the 
right  to  the  fund  has  become  absolute  in  the  beneficiary,  this 
right  may  be  assigned  as  any  other  chose  in  action.3  Provis- 
ions of  the  charter  restricting  the  classes  who  may  become 
beneficiaries  of  the  society  do  not  apply  after  the  right  to 
the  fund  has  vested  in  the  beneficiary  by  the  death  of  the 
member.4 

§  172.  Assignment  of  the  certificate  by  the  beneficiary. — 
The  beneficiary  in  an  ordinary  life  insurance  policy  has  a  vested 
interest  which  may,  generally  speaking,  be  assigned  by  him, 
with  the  concurrence  of  all  parties  interested,  so  as  to  vest  in  his 
assignee  the  same  substantial  rights  which  he  possessed  in  the 
contract.  A  large  part  of  the  law  on  the  subject  of  the  assign- 
ment of  insurance  policies  has  arisen  from  assignments  made 
by  beneficiaries.  But,  according  to  the  general  plan  of  mutual 
benefit  insurance,  the  beneficiary  has  no  vested  right  in  the 
contract  or  the  benefit  fund.6  The  right  of  the  beneficiary  to 
take  the  fund  is  dependent  upon  his  surviving  the  member 
while  the  designation  is  unchanged,  and,  in  case  of  the  prior 
decease  of  the  beneficiary,  no  interest  in  the  fund  passes  to  his 
estate  on  the  subsequent  death  of  the  member.6  Ilis  interest, 
during  the  lifetime  of  the  member,  is  a  mere  expectancy,  not 
property,  and  its  value  as  the  subject  of  an  assignment  would 

•Grant  v.  Ins.  Co.,  75  Me.  19(5.  *BriggS   v.   Earl.  189  Mass.   47:5;    1 

luii^s  v.  Ins.  Co.  (Cal.),  27  Pac.  N.  East.    Rep.  847;  Aiken  v.  Associa- 

Rep.  ail.  tion,  18  N.  Y.    Bupp.  579;   see    g  165 

l;.._.r    Williams    Ins.  Co.   v.    Car-  note,  §169. 

rington,  43  Mich.  862;  Dogge  v.  Ins.  'See  §§  212,  213. 

Co.,  49  Wis.  501;    Greene  v.  Ins  Co.,  iQqq  g  202. 
84  N.  V.  572;  Combs   v.   Ins.    Co.,  32 
N.  J.  Eq.  512. 


332  ASSIGNEE   OF    CONTRACT. 

be  speculative  and  uncertain.  It  is  very  doubtful  whether  the 
mere  consent  of  a  member  that  his  beneficiary  might  assign  his 
interest  in  the  contract  of  insurance  would  estop  the  member 
from  afterward  changing  the  designation  of  his  beneficiary. 

§  173.  The  designation  of  a  new  beneficiary  is  not  an 
assignment  of  the  certificate. — Where  the  charter,  by-law  or 
certificate  of  membership  provides  that  the  member  may 
change  his  beneficiaries  by  the  indorsement  of  their  names 
upon  the  certificate,  a  direction  by  the  member,  written  on  the 
back  of  his  certificate,  that  the  fund  shall  be  paid  to  a  certain 
person,  is  to  be  regarded  as  a  designation  of  a  beneficiary,  and 
not  as  an  assignment  of  the  certificate.1  And  where  a  certificate 
of  membership  in  a  mutual  benefit  society  is  made  payable  to 
the  member  himself,  and  there  is  no  provision  in  the  contract 
specifying  how  he  may  change  his  beneficiary,  an  indorsement 
on  the  certificate  showing  that  he  desires  the  benefit  fund 
Avhen  collected  to  be  distributed  among  certain  beneficiaries, 
is  not  an  assignment  of  the  certificate,  but  is  a  change  of  bene- 
ficiaries which  the  member  has  a  right  to  make,  from  the  very 
nature  of  the  contract.2  An  assignment  is  the  transfer  by  one 
of  his  right  or  estate  in  property  to  another.  It  rests  upon 
contract,  and  generally  speaking,  the  delivery  of  the  thing 
assigned  is  necessary  to  its  validity.3  But  in  such  cases  as 
have  just  been  mentioned,  the  delivery  of  the  certificate  to  the 
persons  named  is  not  necessary  to  give  them  the  right  to  take 
the  fund.  This  right  does  not  rest  upon  contract,  but  upon 
the  direction  for  the  payment  of  the  benefit  fund.4  A  member 
may  have  no  right  or  estate  in  the  benefit  fund,  which  he  can 
assign,  but  he  may,  nevertheless,  have  the  power  to  appoint  a 
beneficiary  to  take  the  fund.  This  power  of  appointment  of  a 
new  beneficiary,  or  right  to  dispose  of  the  fund,  may  be  exer- 
cised in  any  manner  agreed  upon  in  the  contract  of  insurance. 

1  Highland  v.  Highland,  109  111.  108  Pa.  St.  6;  In  the  matter  of  Webb, 
366;  see  §  149.  49  Cal.  541.     Notice  by  the  assignee 

2  St.  Clair  Co.  Ben.  Soc.  v.  Fiet-  or  the  assignor  to  the  company  that 
sam,  97  111.  474;  Milner  v.  Bowman,  an  insurance  policy  has  been  assigned, 
119  Ind.  448;  21  N.  East.  Eep.  1094;  may  be  sufficient  to  transfer  the 
see  §§  212,  214.  title.     In  re  Styan,    1   Phillips'  Ch. 

3  Palmer  v.  Merrill,  6  Cush.  (Mass.)  105;  Chowne  v.  Baylis,  31  Beav.  351. 
282;  Dexter  Savings  Bank  v.  Cope-  *  Highland  v.  Highland,  supra;  St. 
land,  77   Me.    263;  Scott  v.  Dickson,  Clair,  etc.,  S03.  v.  Fietsam,  supra. 


ASSIGNEE    OF    CONTRACT.  666 

If  the  contract  provides  that  it  may  be  clone  by  an  assignment 
of  the  certificate,  it  may  so  be  clone,  but,  in  assigning  the  cer- 
tificate, the  member  does  not  transfer  his  right  or  estate  in 
the  certificate  or  the  fund  to  his  beneficiary;  he  executes  a 
power.  He  does  not  really  assign  the  certificate;  he  changes 
and  designates  his  beneficiary.  This  distinction  is  of  prime 
importance,  for  any  words,  or  even  some  acts,  which  show  the 
intent  of  the  parties  to  make  a  complete  transfer  will  work  an 
assignment,  but  the  power  of  appointment  must  be  exercised 
as  such,  and  the  right  to  change  the  beneficiary  must  be  exer- 
cised in  the  manner  agreed  upon  in  the  contract  of  insurance, 
if  that  contract  limits  that  right  and  prescribes  a  certain  mode 
in  which  the  change  shall  be  made. 

§  174.  Law  governing  the  validity  of  an  assignment. — 
The  assignability  of  a  contract  is  governed  by  the  laAV  of  the 
place  where  it  was  made  and  is  to  be  performed.  If  it  is  as- 
signable, an  assignment,  being  incidental  and  collateral  to  the 
original  contract,  is  governed  by  the  law  of  the  place  where  it 
was  made.  If  an  assignment  of  a  contract  of  insurance  is  valid 
or  void  where  it  was  made,  it  is  valid  or  void   everywhere.1 

1  Lee  v.  Ardy,  L.  R.,  17  Q.  B.  Div.  Ontario  Rep.  442;  Conn.  Mutual  v. 
309;  Newcomb  v.  Ins.  Co.,  9  Ins.  L.  Westervelt, .  52  Conn.  586;  Mutual 
J.  124;  Toronto  Ins.  Co.  v.  Sewell,  17   Benefit  v.  Bank,  68  Mich.  116. 


CHAPTER  XII. 

CONSTRUCTION  OF  THE  DESIGNATION  OF  THE  BENEFICIARY. 

§  175.     Rules  of  construction. 

176.  Provisions  of  the  charter  designating  beneficiaries. 

177.  Beneficiaries  designated  by  the  by-laws  or  certificate. 

178.  Devisees;  as  designated  in  last  will. 
179-183.     Wife,  widow. 

184.  Fund  payable  to  wife  for  the  benefit  of  herself  and  children. 

185.  Wife  and  children. 

186.  Child. 

187.  Children  born  after  issue  of  certificate. 

188.  Child,  grandchild. 

189-192.     Heirs,  heirs  at  law,  legal  heirs. 

193.  Orphans. 

194.  Family. 

195.  Dependents. 

196.  Relations,  relatives. 

197.  Legal  representatives. 

198.  The  assured. 

199.  "  Guardian  "  of  member. 

§  175.  Rules  of  construction. — It  is  well  settled  that  in 
construing  the  terms  in  which  the  beneficiary  of  a  contract  of 
mutual  benefit  insurance  has  been  designated,  a  liberal,  rather 
than  a  restricted  meaning  should  be  given  to  the  language  or 
word  employed.  Where  there  is  no  fixed,  legal  or  technical 
meaning  which  the  court  must  follow  in  the  construction  of  a 
term  of  a  contract,  the  best  construction  is  that  which  is  made 
by  viewing  that  term  as  the  mass  of  mankind  would  view  it; 
for  it  may  be  safely  assumed  that  such  was  the  aspect  in  which 
the  parties  themselves  viewed  it.  The  result  thus  obtained  is 
exactly  what  is  obtained  from  the  cardinal  rule  of  intention.1 
Where,  under  the  contract,  certain  classes  of  persons  only  may 
take  the  fund,  a  broad  and  liberal  meaning  should  be  given  to 
the  words  in  which  the  classes  are  specified. 

1  Navigation  Co.  v.  Moore,  2  Whart.  491. 

(334) 


CONSTRUCTION   OF   DESIGNATION    OF    BENEFICIARY.  335 

§  176.  Provisions  of  the  charter  designating  benefici- 
aries.— In  contracts  of  mutual  benefit  insurance  the  person  or 
persons  who  are  to  be  paid  on  the  death  of  the  member  are 
often  not  designated  by  name,  but  are  described  in  the  charter 
or  by-laws  of  the  society  as  a  class,  or  as  one  of  a  class,  of  per- 
sons who  are  to  be  entitled  to  the  benefit  fund.  In  such  cases 
parol  evidence  is  admissible  to  show  that  the  person  suing  is 
the  one  intended  by  the  parties  to  be  paid.1 

It  is  customary  for  mutual  benefit  societies  to  provide  in 
their  charters,  by-laws,  or  certificates  of  membership  how  the 
benefit  fund  shall  be  disposed  of,  in  case  no  designation  shall 
have  been  made  by  the  member,  or  in  case  the  designated  ben- 
eficial shall  have  died,  or  shall  be  from  any  cause  incapable 
of  taking  the  fund.  These  provisions  are  a  part  of  the  con- 
tract of  insurance,  and  in  construing  the  meaning  of  a  designa- 
tion made  by  a  member,  or  in  seeking  to  determine  who  is 
entitled  to  the  benefit  fund,  they  must  often  be  looked  to  as 
an  important  element  of  the  question.  A  member  was  at  the 
time  of  his  death  in  good  standing  in  a  society,  the  object  of 
which  was,  as  declared  by  its  charter,  "  to  provide  and  main- 
tain a  fund  for  the  benefit  of  the  widow,  orphan,  heir,  assignee 
or  legatee  of  a  deceased  member."  By  a  provision  of  one  of 
the  by-laws,  if  a  deceased  member  had  no  legal  representatives, 
the  fund  should  become  the  property  of  the  society.  He  had 
named  his  first  wife  as  the  beneficiary  of  his  certificate,  and 
she  died.  He  married  again,  and  died  intestate,  without  chil- 
dren, leaving  his  second  wife.  He  never  made  another  desig- 
nation of  a  beneficiary  after  he  took  out  his  certificate.  Three 
separate  claims  were  made  to  the  fund;  first,  by  the  represen- 
tatives of  the  first  wife;  second,  by  the  representatives  of  the 
husband;  third,  by  the  surviving  widow.  Thereupon  the 
society  filed  a  bill  of  interpleader,  making  these  parties  defend- 
ants that  they  might  establish  their  several  claims  to  the  fund. 
The  court  held  that  the  representatives  of  the  first  wile  were 

•A  contract  of  mutual  benefit  in-  parol  evidence  is  necessary  to  deter- 

suram-e  which    does  not    name  the  mine  who  is  the  beneficiary.     I.'ail- 

beneficiary,  but  provides  for  the  pay-  way  Association  v.  Loomia,  142  111. 

ment  of  the  fund  on  the  death  of  the  660;  Kanz  v.  Great  Council.  18  Mo. 

member  to  a  certain  class  of  persons,  App.  341:  Baker   v.   Johnson  Co..  33 

is  not  a  contract  in  writing,  in  apply-  Iowa  151;  "Works  v.   Macalister,  40 

ing  the  statutes  of   limitation,  since  Mich.  84. 


336  CONSTRUCTION    OF   DESIGNATION    OF   BENEFICIARY. 

not  entitled  to  the  fund.1  And  it  was  held  that  the  term  legal 
representatives  in  the  by-law,  providing  that  "  if  a  member  has 
no  legal  representatives,  such  sum  of  money  as  they  would  have 
been  entitled  to  shall  become  the  property  of  the  association," 
is  to  be  taken  as  meaning  those  who  are  legal  representatives 
in  the  contemplation  of  the  charter  and  by-laws,  to-wit,  the 
persons  named,  "  the  widow,  orphans,  heir  or  legatee."  The 
court  said :  "  The  fund  is  to  go  to  some  one  of  these  parties. 
They  are  mentioned  disjunctively;  the  money  is  to  be  paid  to 
the  widow,  or  the  orphans,  or  the  heir,  or  the  assignee  or  leg- 
atee. ]STow,  that  means  one  of  two  things;  either  that  it  shall 
go  to  some  one  of  these,  to  be  selected  by  some  authority,  or 
else  that  they  are  to  have  precedence  in  the  order  in  which  they 
are  named.  But  there  is  no  authority  provided  for  or  indi- 
cated, in  either  the  charter  or  the  by-laws,  by  whom  any  one 
of  these  beneficiaries  shall  be  selected;  and,  therefore,  our  con- 
clusion is  that  the  order  in  which  they  are  named  is  the  order 
in  which  they  are  to  benefit  by  this  fund;  first  the  widow;  if 
there  is  no  widow,  then  the  orphans;  if  there  is  no  orphan, 
then  the  heir,  etc.  In  this  case  the  question  is  between  the 
widow  and  the  personal  representatives.  The  latter  are 
excluded  entirely  by  our  construction  of  the  by-laws,  and, 
therefore,  the  decree  will  be  that  the  widow  shall  take  the 
fund."  '  Where  the  charter  of  a  mutual  benefit  society  pro- 
vides that  the  benefit  fund  shall  upon  the  death  of  a  mem- 
ber be  paid  to  his  widow  and  children,  they  are  entitled  to 
the  fund,  although  another  person  is  named  in  the  certifi- 
cate of  membership  as  the  beneficiary,  and  has  paid  all  the 
assessments  levied  upon  the  member.  The  certificate  must,  in 
such  a  case,  be  construed  in  connection  with  the  charter  as  a 
contract  to  pay  to  the  widow  and  children  of  the  member  the 
amount  of  the  insurance.  If,  for  instance,  a  certificate  in  such 
a  society  is  made  payable  to  a  creditor  of  the  member,  it  is  not 
void,  but,  the  designation  in  the  certificate  alone  being  void, 
there  remains  a  valid  and  subsisting  contract  of  insurance, 
under  the  terms  of  the  charter,  in  favor  of  the  widow  and 

1  See  §  202.  Rep.  710;  Jewell  v.  Grand  Lodge.  41 

2  Masonic  Mutual  v.  McAuley,  2  Minn.  504;  43  N.  "W.  Rep.  88;  Riley 
Mackey  (D.  C.)  70;  see  Rockhold  v.  v.  Riley,  75  Wis.  464;  44  N.  W.  Rep. 
Association,  129  111.  440;  19  N.  East.  112. 


CONSTRUCTION   OF   DESIGNATION    OF  BENEFICIARY.  337 

children  of  the  member.1  The  charter  of  a  society  provided : 
"  Upon  the  decease  of  any  member  of  this  association,  the  fund 
to  which  his  family  is  entitled  shall  be  paid  as  may  be  desig- 
nated in  the  application  for  membership;  this  being  changed 
by  death,  or  otherwise  impossible,  it  shall  go — first,  to  the 
widow  and  infant  children,"  etc.  A  member  designated,  as 
his  beneficiary,  his  brother,  who  afterward  died  on  March  7, 
1880.  The  member  died  May  26,  1880,  intestate  and  childless. 
His  widow  and  not  his  administrator  was  entitled  to  the  bene- 
fit fund.2 

The  object  of  a  society  was  "to  establish  a  widows'  and  or- 
phans' fund  "  for  the  payment  of  a  certain  sum  on  the  death 
of  a  member  "  to  his  family  and  those  dependent  upon  him,  as 
he  may  direct."  A  by-law  provided  that  in  case  a  member 
fails  to  direct,  "  by  will,  entry  or  benefit  certificate,"  who  shall 
receive  such  benefit,  "  the  council  shall  cause  the  same  to  be 
paid  to  the  person  or  persons  entitled  thereto."  A  member 
designated  his  children  as  beneficiaries.  They  died  a  short 
time  before  the  father,  and  he  gave  no  other  direction,  and 
left  no  children  or  other  persons  dependent  upon  him  for  sup- 
port, except  his  widow;  and  the  court  held  that  the  widow  was 
entitled  to  the  benefit  fund.3  Where  the  charter  of  a  mutual 
benefit  society  provides  for  the  payment  to  the  member's  fam- 
ily or  his  appointee,  of  a  certain  sum  of  money  upon  the  mem- 
ber's death,  and  that,  "in  case  no  direction  is  made  by  a 
brother,  the  same  shall  be  paid  to  the  person  or  persons  entitled 
thereto,"  upon  the  death  of  a  member,  without  having  named 
a  beneficiary,  the  benefits  are  payable  to  the  wife  and  children, 
and  not  to  the  administrator  of  the  deceased  member.4 

Where  the  charter  of  a  mutual  benefit  society  provides  that 
the  fund  due  upon  the  death  of  a  member  shall  be  paid  to  his 
widow  and  children,  and  only  gives  the  member  the  power  to 
designate  by  will  in  what  proportion  it  shall  be  divided  be- 
tween them,  there  can  be  no  assignment  of  a  certificate  or 

1  Ky.  Grangers'  Mut.  Ben.  Soc.  v.  9  Van  Bibbers  Adm'r  v.  Van  Bib- 
McGregor,  7  Ky.  L.  Rep.  (Sup'r  Ct.)  ber,  82  Ky.  347,  affirming  5  Ky.  Law 
550;    Gibson  v.   Ky.  Grangers'  Mut.  Rep.  182. 

Ben.  Soc,  8  Ky.  L.  Rep.  (Sup'r  Ct.)  3Ballou  v.   Gile,  Adm'r,  50  Wis. 

580;  see  Rindge  v.  N.  E.  Mutual  Aid  614. 

Society,  146  Mass.  286;   15  N.  East.  *  Fenn  v.  Lewis,  81  Mo.  259;  affirm- 

Rep.  628.  ing  10  Mo.  App.  478. 
22 


60S  CONSTRUCTION    OF   DESIGNATION   OF    BENEFICIAEY. 

change  in  the  beneficiary  which  will  divest  the  widow  and  chil- 
dren of  their  rights.1  In  the  absence  of  a  valid  designation  of 
a  beneficiary,  the  proceeds  will  be  disposed  of  according  to  the 
charter  of  the  society  as  if  no  designation  had  been  made.2 

A  society  was  incorporated  under  a  statute,  "  to  aid,  assist 
and  support  members  or  their  families  in  case  of  want,  sick- 
ness or  death,"  which  statute  authorized  it  to  create,  manage 
and  disburse  a  fund  sufficient  to  pay  all  losses  and  expenses 
incident  to  the  corporation,  for  the  relief  of  members  and 
their  families,  under  such  conditions  and  regulations  as  might 
be  adopted  by  the  grand  lodge;  and  it  was  provided  that  such 
fund  might  be  set  apart  "  to  be  paid  over  to  the  families,  heirs 
or  legal  representatives  of  deceased  or  disabled  members,  or  to 
such  person  or  persons  as  such  deceased  member  may,  while 
living,  have  directed;  and  the  collecting,  managing  and  dis- 
bursement of  the  same,  as  well  as  the  person  or  persons  to 
whom,  and  the  manner  and  time  in  which,  the  same  shall  be 
paid  on  the  death  of  a  member,  shall  be  regulated  and  con- 
trolled by  the  rules  and  by-laws  of  the  said  grand  lodge." 
The  only  by-law  adopted  by  the  society  relating  to  this  sub- 
ject provided  that  each  member  of  the  order  should  be  entitled 
to  a  mutual  aid  certificate,  which  should  set  forth  the  name 
and  good  standing  of  the  member,  the  amount  of  benefit  to  be 
paid  at  death,  and  to  whom  payable,  and  that  such  certificate 
should  represent  $2,000.  In  an  action  against  the  society  for 
the  amount  of  the  benefit  fund,  on  account  of  the  death  of  a 
member,  it  did  not  appear  that  any  certificate  provided  for  by 
the  by-laws  above  referred  to  was  ever  issued  to  the  deceased 
member.  The  trial  court  and  court  in  general  term  held  that 
the  issuing  of  such  a  certificate  was  a  condition  precedent  to 
the  liability  of  the  society  to  pay  the  fund,  and  that  the  lack 
of  such  certificate  was  fatal  to  the  plaintiff's  action.3  But  the 
court  of  appeals  held  that  those  who  were  to  receive  the  fund 
were,  by  the  very  terms  of  the  act  of  incorporation,  to  be  the 
families,  heirs  or  legal  representatives  of  deceased  or  disabled 
members,   or    such    other   person    as   the   deceased   member 

1  Ky.  Grangers'  Mut.  Ben.  Soc.  v.  26  N.  East.  Rep.  443;  Arthars  v.  Baird, 
Howe,  9  Ky.  Law  Rep.  (Supr.  Ct.)  8  Pa.  Co.  67;  Shea  v.  Association, 
198.  176  Mass.  289;  35  N.  East.  Rep.  855. 

2  Park  v.  Welch,  33  111.  App.  188;  3  Bishop,  AdmYx,  v.  Grand  Lodge, 
Burns  v.  Grand  Lodge,  153  Mass.  173;  43  Hun  472. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  339 

might,  while  living,  have  directed,  and  that  in  case  no  such 
direction  was  given,  such  payment  was  intended  to  be  made 
to  his  family,  heirs  or  legal  representatives.  "  It  is  true,"  said 
the  court,  "  the  act  and  the  constitution  fail  to  state  which  it 
shall  be  in  case  no  direction  is  given,  whether  it  shall  be  the 
family,  the  heirs,  or  legal  representatives;  but  we  think  this 
expression  should  be  construed  with  reference  to  the  general 
purpose  of  the  corporation,  and,  having  such  purpose  in  view, 
Ave  think  it  really  was  meant,  and  that  it  should  be  held,  to 
include  those  who  would  take  such  property  as  in  cases  of 
intestacy."  l 

§  177.  Beneficiaries  designated  hj  the  by-laws  or  cer- 
tificate.— Where,  by  the  laws  of  a  society,  the  benefit  fund  is 
to  be  paid  "  to  the  widow,  children,  mother,  sister,  father  or 
brother  of  a  deceased  member,  and  in  the  order  named,  if  not 
otherwise  directed  by  the  member  previous  to  his  death,"  the 
relatives  will  take  the  fund  in  the  order  named,  unless  the 
member  in  his  lifetime  executed  the  power  of  direction,  thus 
changing  the  order  of  payment.*  By  the  provisions  of  the  by- 
laws of  a  society,  a  member  in  good  standing  might  surrender 
his  certificate  and  have  a  new  one  issued,  payable  to  such 
beneficiaries  dependent  upon  him  as  he  might  direct,  and,  in 
the  event  of  the  death  of  the  beneficiary  named,  and  no  other 
disposition  being  made,  the  benefit  was  to  go  to  the  dependent 
heirs  of  the  deceased  member.  An  insured  member  died.  He 
left  a  will  bequeathing  the  benefit  fund  to  a  person  to  whom 
he  was  engaged  to  be  married,  but  to  whose  support  he  had 
contributed  nothing,  and  who  was  not  dependent  upon  him. 
He  died  without  marrying  this  person,  and  left  his  mother, 
who  was  dependent  upon  him,  as  his  next  of  kin.  It  was  held 
under  these  facts  that  the  disposal  of  the  fund  by  will  being 
invalid,  the  mother  was  entitled  to  it.3  In  McClure  v.  John- 
son,4 the  benefit  fund  was  made  payable  to  the  "  wife,  husband, 
children,  mother,  sister,  father  or  brother  of  such  deceased 
member,  and  in  the  order  above  named,"  by  the  provisions  of 
a  by-law  of  the  society,  and  there  was  no  provision  of  the  con- 

'  Bishop  v.  Grand  Lodge,  112  N.  Y.       8  Supreme  Council  v.  Perry  et  al., 
627:  20  N.  East.  Rep.  562,  reversing   140  Mass.  580. 
43  Hun  472.  4  56  Iowa  620. 

2  Arthur  v.  Association,  29  O.  St. 
557, 


340  CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY. 

tract  of  insurance,  authorizing  any  other  disposition  of  tl  e 
fund.  A  member  left  a  will  by  which  he  directed  that  the 
fund  should  be  paid  to  a  creditor,  but  the  court  held  that  he 
had  no  right  to  change  the  beneficiary,  and  that  under  this 
by-law  his  widow  was  entitled  to  the  fund.  Where  the  by- 
laws provide  that  each  member  shall  designate  in  writing  some 
person  as  nominee  for  the  benefit  fund,  and  that  upon  the 
death  of  a  member  the  nominee  so  designated  by  him  shall 
receive  such  fund,  the  society  is  liable  only  to  the  nominee  of 
the  deceased  member,  and  where  there  is  no  nominee  there  is 
no  liability.1  Where  the  by-laws  name  a  class  of  persons  who 
shall  take  the  fund  in  case  the  member  selects  and  appoints  nc 
one  to  take  it,  the  rights  of  the  persons  named  in  the  by-laws 
are  not  affected  by  an  illegal  or  ineffectual  designation  of  a 
beneficiary  by  the  member.2 

Where  the  appointment  of  a  beneficiary  is  revoked  by  his 
death  prior  to  the  death  of  a  member,3  and  no  other  designa- 
tion is  made,  the  by-laws  often  control  the  direction  of  the 
benefit  fund.4 

By  the  provisions  of  a  by-law  of  a  mutual  benefit  society, 
at  the  death  of  a  member  the  sum  of  twenty-five  dollars  was 
to  be  paid  to  his  widow  or  relatives  to  provide  for  his  decent 
interment.  The  widow  of  a  deceased  member,  who  at  the 
time  of  his  death,  and  for  years  previously,  had  not  been  liv- 
ing with  him,  and  had  incurred  no  expense  toward  his  inter- 
ment, brought  an  action  to  recover  this  stipulated  sum,  and 
was  met  by  an  offer  of  the  society  to  show  that  the  amount 
had  already  been  paid  to  decedent's  son-in-law,  at  whose 
house  he  had  died,  and  who  had  paid  all  the  expenses  of  his 
funeral.  The  court  held  that  the  offer  should  have  been  re- 
ceived, and  that  being  separated  from  her  husband  in  pursu- 
ance of  a  mutual  understanding  and  not  by  reason  of  coercion 
or  ill-treatment,  living  apart  from  him  at  the  time  of  his  death, 

1  Order  of  Mutual  Companions  v.       3  See  §  202. 

Griest,  76  Cal.  494;  18  Pac.  Rep.  652.       4  Riley  v.  Riley,  75  Wis.  464;  44  N. 

2  Arthur  v.  Odd  Fellows,  supra;  Su-  W.  Rep.  112;  Given  v.  Odd  Fellows, 
preme  Council  v.  Perry,  supra;  Brit-  71  Wis.  547;  37  N.  W.  Rep.  817;  see 
ton  v.  Supreme  Council,  46  N.  J.  Eq.    §  182. 

102;  18  Atl.  Rep.  675;  Park  v.  Welch, 
33  111.  App.  188;  Palmer  v.  Welch,  132 
111.  141;  23  N.  East.  Rep.  412. 


CONSTRUCTION    OF   DESIGNATION   OF   BENEFICIARY.  341 

and  having  borne  no  part  of  the  funeral  expenses,  the  widow 
was  not  entitled  to  the  bounty  of  the  society.1  A  society  may 
waive  the  provisions  of  its  by-laws  or  of  its  constitution  re- 
lating to  the  persons  who  may  become  beneficiaries.2 

§178.  Devisees;  "as  designated  in  last  will." — The  char- 
ter of  a  mutual  benefit  society  provided  in  its  sixth  section 
that  upon  the  decease  of  any  member  of  the  association  "  the 
fund  to  which  his  family  is  entitled  shall  be  paid  as  may  be 
designated  in  the  application  for  membership.  This  being 
changed  by  death  or  otherwise  impossible,  it  shall  go,  first,  to 
the  widow  and  infant  children,"  and  afterward  in  the  order 
named.  A  member  directed  in  his  application  that  the  benefit 
should  be  paid  at  his  death  as  he  might  designate  in  his  will. 
He  died  intestate,  leaving  a  widow,  but  no  infant  children. 
The  court  held  that  the  widow  was  entitled  to  the  fund,  and 
in  so  deciding  said :  "  Appellants  contend  that  this  section 
(above  quoted)  applies  only  where  a  designation  is  made,  and 
subsequent  events  render  it  impossible  of  fulfillment.  But  we 
think  it  has  a  broader  and  more  comprehensive  meaning,  and 
that  it  applies  as  well  where,  by  reason  of  the  failure  of  the 
insured  to  make  any  designation  at  all,  it  becomes  impossible 
to  pay  according  to  his  direction,  as  in  case  of  the  death  of  a 
designated  beneficiary;  for,  according  to  what  seems  to  us  the 
true  construction  of  the  language  used,  it  is  only  in  those  cases 
where,  pursuant  to  the  charter,  the  insured  has  expressly 
directed  otherwise,  that  the  fund  is  not  payable  as  pointed  out 
by  the  terms  of  the  sixth  section."  3  A  society  issued  a  certifi- 
cate of  membership,  and  agreed  therein  that  on  the  death  of 
the  member  in  good  standing  it  would  cause  an  assessment  to 
be  made  upon  its  members,  and  would  pay  the  proceeds  of 
such  assessment,  not  exceeding  $2,500,  "  as  a  benefit  to  his 
devisees,  as  provided  in  his  last  will  and  testament,  or  in  the 
event  of  their  prior  death,  to  the  legal  heirs  or  devisees  of  the 
holders  of  this  certificate."  The  member  died  in  good  stand- 
ing and  intestate.  The  court,4  in  construing  this  contract, 
said:  "The  insured  might  die  intestate.     It  could  not  have 

1  Berlin  Beneficial  Society  v. March,  3  Whitehurst  v.  Whitehurst,  83  Va. 

82  Pa.  St.  166.  153;  1  S.  E.  Rep.  801. 

*  Johnson    v.    Supreme  Lodge,  53  4  Judge  Dyer,  U.  S.  Cir.  Ct.,  E.  D. 

Ark.  255.  Wisconsin. 


342  CONSTRUCTION   OF   DESIGNATION    OF   BENEFICIARY. 

been  in  contemplation  of  the  parties  that,  in  that  event,  there- 
was  to  be  no  beneficiary  entitled  to  sue  upon  the  contract. 
The  certificate,  fairly  and  reasonably  construed,  means,  we 
think,  that  if  the  insured  should  choose  to  make  a  last  will  in 
which  devisees  should  be  named,  then  such  devisees  wTere  to 
become  the  beneficiaries  entitled  to  receive  and  recover  the 
sum  collected  by  assessment  on  account  of  the  certificate. 
But  no  obligation  was  imposed  upon  the  insured  to  make  a 
last  will.  He  might,  if  he  chose,  leave  his  estate  to  be  divided 
among  legal  heirs  as  the  law  should  direct  its  division,  and,  in 
that  event,  as  no  devisees  would  exist,  the  benefits  of  the  cer- 
tificate would  accrue  to  the  heirs.  In  other  words,  the  effect 
of  the  contract  is  that  if  the  insured  has  made  no  will,  and  if, 
therefore,  no  devisees  are  in  existence,  his  legal  heirs  shall 
become  the  beneficiaries  entitled  to  enforce  payment  in  a  suit 
upon  the  certificate.  This  view  of  the  rights  of  the  parties 
accords  with  the  sense  and  meaning  of  the  contract."1 

A  mutual  benefit  society  issued  a  certificate  of  membership 
in  which  it  agreed  to  pay,  or  cause  to  be  paid  "  as  a  benefit  to 
the  member's  devisees,  as  provided  in  his  last  will  and  testa- 
ment, or  in  the  event  of  their  prior  death,  to  the  legal  heir  or 
devisees  of  the  certificate  holder"  the  amount  derived  from 
an  assessment  upon  its  members.  In  construing  this  contract 
the  court  said :  "  The  substantial  promise  was  to  pay  to  dev- 
isees, if  there  were  devisees  to  take,  and,  if  not,  then  to  pay 
to  heirs.  We  think  this  the  fair  and  reasonable  construction 
of  the  agreement,  which,  in  view  of  the  purpose  of  the  associ- 
ation, may  well  be  adopted." a 

A  certificate  of  insurance  was  issued  by  a  society  organized 
under  the  laws  of  Illinois  for  the  purpose  of  securing  "  pecun- 
iary benefits  to  the  widows,  orphans,  heirs  or  relatives  by 
consanguinity  or  affinity,  devisees  or  legatees  of  deceased 
members,"  and  was  made  payable  "  to  the  devisees  of  Philip 
H.  Worley."  Worley  died  intestate,  and  suit  was  brought  on 
the  certificate  by  the  administrator  of  Worley's  estate.  So 
far  as  appears  from  the  reported  case,  no  provision  wTas  made 
by  the  society,  designating  a  beneficiary  in  case  the  member 

'Smith  t.  Covenant  Mutual,  24  s Covenant  Mutual  v.  Sears,  114  III. 
Fed.  Rep.  685;  see  Newnian  v.  Asso-  108;  see  Newman  v.  Association,  76 
ciation,  76  Iowa  56.  Iowa  56. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  343 

should  fail  to  make  a  designation — except  as  the  express  pur- 
pose of  the  law  above  quoted  might  be  construed  into  such  a 
provision.  The  court 1  held  that  the  certificate  was  not  a  part 
of  the  assets  of  the  estate,  and  not  recoverable  as  such  by  his 
administrator.  Expressions  in  the  opinion  of  the  court  indi- 
cate that,  in  the  view  taken  of  the  case,  no  recovery  could  be 
had  upon  the  certificate.  It  was  there  said  that  neither  the 
decedent  nor  the  defendant  corporation  intended  by  their  con- 
tract to  provide  for  the  widows,  orphans,  heirs  or  creditors  of 
the  decedent,  but  only  for  his  devisees,  and,  as  there  were  no 
devisees,  there  was  no  beneficiary  in  existence  who  could  en- 
force the  contract — that,  as  in  no  contingency  was  the  insur- 
ance to  be  paid  to  any  other  persons  than  devisees,  the  ex- 
pression of  one  thing  excludes  other  and  different  things;  that 
the  designation  of  devisees  in  the  contract  excluded  the  other 
classes — the  widow,  orphans,  heirs  and  creditors.2 

It  was  held  in  one  case  that  where  the  law  provides  for  the 
organization  of  societies  to  "  secure  pecuniary  aid  to  the  widows, 
orphans,  heirs  and  devisees  of  deceased  members,"  the  mem- 
ber may  not  by  will  make  the  fund  payable  to  his  executor; 
that  the  executor  is  not  one  of  the  class  of  beneficiaries  named; 
that  it  is  the  intent  of  the  law  to  place  the  fund  beyond  the 
reach  of  creditors.3  But  this  would  seem  to  be  a  very  narrow 
construction  to  give  to  the  language,  and  the  courts  of  the 
state  in  which  the  law  was  passed  have  held  that  any  one  may 
become  a  beneficiary  of  a  society  organized  under  it  who  is 
c;i]>;ible  of  taking  the  fund  under  the  laws  relating  to  an  insur- 
able interest  in  the  life  of  the  member.4 

§  179.  Wife,  widow. — In  the  absence  of  qualifying  circum- 
stances, the  beneficiary  intended  by  a  contract  which  provides 
for  the  payment  of  the  benefit  fund  to  the  wife  or  widow  of  a 
deceased  member,  is  the  lawful  wife  of  the  member  in  case  she 

1  Judges  McCrary  and  Love.  266;  Supreme   Council  v.    Priest,  46 

s  Worley,  Adm'r,  v.  X.  \Y.  Masonic  Mich.  429;  Worley  v.  Association,  10 

Aid  Ass'n,  10  Fed.  Rep.  227;  see  Jewell  Fed.  Rep.  227. 

v.  Grand  Lodge.  41  Minn.  504;  43  N.  4See    §§166,    235;     Bloomington 

W.  Rep.  88,  and  Relief  Association  v.  Mutual  v.   Blue,  120  111.  121;  11  N. 

McAuley,  2  Mackey  (D.  0.)  70.  East.  Rep.  331;  Martin  v.  Stubbings, 

3 Northwestern    Masonic  v.   Jones,  126  111.    387;   18  N.    East.    Rep.  <;:>7; 

T>1   Pa.  St.    99;  26  Atl.  Rep.  253,  eit-  Lamont  v.  Association,  30  Fed.  Rep. 

ing  Mullins  v.  Thompson,  51  Texas  817:     Lamont    v.    Grand    Lodge,    31 

7;    Brown   v.    Association,    33    Hun  Fed.  Rep.  177. 


344  CONSTRUCTION    OF    DESIGNATION   OF   BENEFICIARY. 

survives  him.  One  Bolton,  in  1847,  deserted  his  wife,  and  in 
1862,  so  far  as  the  forms  of  law  were  concerned,  married 
another  woman,  with  whom  he  lived  and  cohabited,  until  ho 
died  in  June,  1879.  In  October,  1877,  he  became  a  member  of 
a  mutual  benefit  society,  and  in  August,  1878,  became  a  member 
of  another  such  society,  in  each  of  which  he  continued  in  good 
standing  until  his  decease.  By  the  terms  of  his  membership  in 
these  societies  the  benefit  fund  was  "payable  to  the  widow  of 
the  deceased  member."  After  the  death  of  the  member,  the 
woman  with  whom  he  went  through  the  forms  of  marriage  in 
1862  collected  the  benefit  fund  in  each  society,  and  the  wife 
whom  he  had  deserted  afterward  brought  an  action  to  recover 
from  her  the  sums  received  by  her  as  benefits  from  the  societies. 
The  supreme  court  of  Maine  held  that,  the  contract  being  in 
writing  and  unambiguous  and  being  in  terms  payable  to  the 
widow,  the  legal  widow  was  entitled  to  the  benefit  funds,-  and 
that  no  evidence  dehors  the  written  contract  was  admissible  to 
vary  its  construction  and  show  that  the  woman  with  whom 
the  deceased  member  went  through  the  form  of  marriage,  and 
cohabited,  was  intended.1  The  authorities  cited  by  the  court 
relate  to  testamentary  devises,  and  in  explanation  of  that  fact 
the  court  said  :  "  But  even  if  this  rule  of  construction  govern- 
ing wills  be  different  from  that  of  other  instruments  in  respect 
to  the  question  under  examination,  it  is  a  sufficient  answer  that 
a  contract  of  life  insurance  like  those  in  question,  while  it  is 
not  a  testament,  is  in  the  nature  of  a  testament;  and  in  constru- 
ing it  the  courts  should  treat  it,  so  far  as  possible,  as  a  will.'2 
A  member  died  in  good  standing  in  a  mutual  benefit  society, 
the  by-laws  of  which  provided  for  the  payment  of  a  certain 
sum  to  the  widow  of  a  deceased  member.  After  his  death  two 
persons  claimed  the  fund  as  his  widow.  The  facts  shown  by 
the  evidence  were  these :  The  member,  Jacob  Eisner,  was  law- 
fully married  to  Yettel,  one  of  the  claimants,  about  1S55,  in 

1  Bolton    v.    Bolton,    73  Me.    299;  5  Ves.   534,2  Jarm.  Wills,  Ch.  31;  1 

citing  Dorm  v.  Dorin,  Eng.  &  Ir.  Ap.  Greenl.  Ev.  section  278. 

Cas.  568;  Hill  v.  Crook,  L.  R.  6  H.  L.  *See  Masonic  Ins.  Co.  v.  Miller.  13 

Cas.  268;  Gardner  v.  Heyer,  2  Paige  Bush  (Ky.)  489;  Washington  Endow. 

Ch.    10,   13;   Cromer  v.    Pinkney,   3  Ass  n  v.  Wood,  4  Mackey  (D.  C.)  19; 

Paige  Ch.  461,  475;  Collins  v.  Hoxie,  McDermott  v.    Life  Association,  24 

9  Paige  Ch.  81,  88;  Hare  v.  Lloyd,  1  Mo.  App.  73. 
T.  &  R.  693;  Cartwright  v.  Vaudry, 


CONSTRUCTION   OF   DESIGNATION  OF  BENEFICIARY.  345 

Prussia.  They  lived  together  as  husband  and  wife  for  several 
years,  and  had  two  children,  a  boy  and  a  girl,  the  issue  of  this 
marriage.  They  were  alive  at  the  death  of  their  father. 
About  1860,  Jacob  came  to  this  country,  leaving  his  family  in 
Europe.  About  18G7  he  began  to  cohabit  with  the  other 
claimant,  Johanna,  and  lived  with  her,  representing  her  as  his 
wife,  until  his  decease.  All  the  parties  were  of  the  Jewish 
faith.  Johanna  knew  that  Jacob  had  a  wife  living  in  Europe, 
but  was  told  that  he  had  £*iven  her  a  divorce  according 
to  the  rites  of  the  Jewish  church.  Jacob  had  several  children 
by  Johanna.  There  was  no  pretense,  on  the  one  hand,  that  a 
legal  severance  of  the  bonds  of  matrimony  between  Jacob  and 
Yettel  ever  took  place.  There  was  no  claim,  on  the  other 
hand,  that  Johanna  did  not  consider  herself  the  lawful  wife  of 
Jacob,  and  it  was  conceded  that,  but  for  the  impediment  of 
the  former  marriage,  the  living  together  of  Jacob  and  Johanna 
was  of  such  a  character  as  to  create  the  relation  of  husband 
and  wife.  Many  circumstances  indicated,  and  the  probability 
was  great,  that,  when  Jacob  became  a  member  of  the  order, 
he  thereby  intended  to  effect  an  insurance  for  the  benefit  of 
Johanna.  "  Conceding  all  this,"  said  the  court,  "  we  can 
not  see  how  the  case  of  Johanna  is  helped.  The  contract  is 
clear  and  unambiguous,  and  its  terms  are  clearly  stated.  It 
ex | tresses  conclusively,  not  the  intention  of  Jacob,  but  the  inten- 
tion of  both  the  contracting  parties.  It  designates  the  bene- 
ficiary. That  beneficiary  is  the  widow,  who  had  lived  with 
Jacob  Eisner  as  a  wife  in  lawful  union.  Under  the  evidence 
in  the  case,  there  is  only  one  person  who  answers  that  descrip- 
tion, and  we  can  not  say  that  the  court  committed  error  in 
awarding  the  funds  strictly  in  conformity  with  the  express 
terms  of  the  admitted  contract."1  The  evidence  in  another 
case"  showed  that  in  1869^  a  man  married  a  woman  in  London, 
and  that  she  survived  him  when  he  died  in  1883.  This  man, 
in  18&2,  represented  himself  as  a  single  man,  and  became  a 
member  of  a  mutual  benefit  society.  Afterward,  in  1882,  a 
marriage  ceremony  took  place  between  him  and  another 
woman,  the  plaintiff  in  the  action,  and   they  thereafter  lived 

•Grand  Lodge  v.    Eisner.    2t>  Mo.    N.  Y.  Weekly  Di^.    348;  21  J.    &   S. 
App.  108.  (N.  Y.  Sup'rCt.)  181. 

-  technook  v.  Sons  of  Benjamin,  24 


346  CONSTRUCTION    OF   DESIGNATION    OF   BENEFICIAEY. 

together  as  man  and  wife.  The  member  notified  his  lodge 
that  he  had  married,  and  that  his  wife's  name  was  Kebecca. 
The  secretary  of  the  lodge,  in  conformity  with  the  require- 
ments of  the  by-laws  of  the  order,  reported  the  facts  so  com- 
municated to  the  United  States  Grand  Lodge  of  the  order. 
After  this  notification  the  member  continued  to  pay  dues  which 
he  was  required  to  pay  quarterly,  and  died  in  good  standing 
in  December,  18S3.  The  contract  was  payable  to  his  widow 
or  heirs.  It  was  held  by  the  court  that  this  evidence  was  not 
sufficient  to  establish  that  plaintiff  had  been  accepted  by  the 
society  as  the  beneficiaiy  of  the  contract  made  with  the  mem- 
ber, and  that  such  acceptance  had  become  part  of  the  contract 
to  the  exclusion  of  the  lawful  wife,  whom  he  had  married  in 
1S69,  and  to  whom,  by  the  provisions  of  the  bj'-laws,  the  bene- 
fit fund  was  payable;  and  it  was  consequently  further  held 
that  a  direction  of  a  verdict  in  favor  of  the  plaintiff  was  erro- 
neous.1 

§  ISO.  Where  the  contract  is  payable  in  general  terms  to  the 
wife  or  widow  of  a  member,  it  seems  to  be  legally  possible  for 
him  to  designate  as  his  beneficiary  a  woman  with  whom  he  is 
living,  although  he  may  not  be  legally  married  to  her,  and  if 
such  designation  is  assented  to  by  the  society,  and  becomes  part 
of  the  contract,  she  may  after  his  death  recover  the  fund. 
But  in  order  that  the  woman  thus  designated  may  recover,  she 
must  assume  the  burden  of  proof  and  clearly  establish,  not 
only  that  such  a  designation  was  made,  but  also  that  it  became 
a  part  of  the  contract  that  she  should  take  the  fund.  Courts  will 
not  assist  in  encouraging  concubinage,  or  permit  the  rights  of  a 
lawful  wife  to  be  taken  away,  except  upon  clear  proof  that  the 
rights  of  some  other  woman  have  become  fixed  in  the  con- 
tract.  The  constitution  of  a  society  stated  its  object  to  be  to 
"  provide  for  the  relief  of  widows,  orphans  and  heirs  of 
deceased  members."  The  by-laws  provided  that  the  benefit 
fund  should  be  paid  over  to  the  widow  of  the  deceased  mem- 
ber, in  case  he  left  a  widow.  The  society  issued  to  a  member 
a  certificate  stating  that,  in  accordance  with  the  requirement 
of  the  "  by-laws  and  articles  of  corporation,"  his  wife,  Mary 
Story,  Avas  designated  as  his  beneficiary.     She  knew  of  the 

1  See  Keener  v.  Grand  Lodge,  38  of  Burmingham,  18  W.  N.  Cas.  280. 
Mo.  App.  543;  see  Supplee  v.  Knights 


CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY.  317 

insurance,  and  paid  all  assessments  but  two  out  of  her  own 
earnings.  After  his  death,  in  an  action  by  Mary  Story  to 
recover  the  sum  due  on  the  certificate,  the  defense  was  that 
the  plaintiff  was  not  the  lawful  wife  of  the  member,  as  he  had 
a  wife  Jiving  at  the  time  of  his  pretended  marriage  to  plaintiff. 
It  was  held  that  the  facts  so  set  up  did  not  constitute  a 
defense  to  the  cause  of  action.  The  court  said :  "  We  think 
(the  certificate)  operated  as  an  assent  by  the  association  to 
the  appointment  of  the  plaintiff  as  beneficiary  of  the  fund 
which  should  become  payable  on  the  death  of  (the  member), 
and  entitled  her,  upon  his  death,  in  the  absence  of  any  other 
or  different  appointment,  to  demand  and  receive  it.  It  may 
be  true  that  the  by-law  which  prescribes  the  obligation  and 
duty  of  the  association,  on  the  death  of  a  member,  contem- 
plated a  payment  to  the  person  who  should  be  the  lawful 
widow  of  a  deceased  member.  But  this  was  not  a  limitation 
of  the  power  of  the  company  so  as  to  prevent  it  from  recog- 
nizing as  the  beneficiary,  a  person  who  might  be  designated 
by  the  member  as  holding  to  him  the  relation  of  wife.  Such 
designation  made  during  the  lifetime  of  the  member  and 
assented  to  by  the  company,  until  changed  by  the  mutual 
agreement  of  the  member  and  the  company,  or  at  least  until 
the  arrangement  was  repudiated  by  one  of  the  parties  thereto, 
was  binding.  The  non-disclosure  by  (the  deceased  member)  of 
the  prior  marriage  was  not  a  fraud  upon  the  association.  Its 
obligation  was  not  in  any  way  enlarged  by  making  the  plaintiff 
the  beneficiar}''.  INTor  did  the  appropriation  of  the  fund  for 
her  benefit  contravene  the  policy  or  objects  of  the  association. 
The  plaintiff  had  for  sixteen  years  lived  with  him,  believ- 
ing herself  to  be  his  lawful  wife.  They  had  children  depend- 
ent upon  them  for  support.  It  was  a  case  where  it  was  his 
duty  to  provide  for  them,  and  the  provision  he  made  through 
this  insurance  was  in  entire  accord  with  the  object  of  the 
defendant's  organb-.at  ion." '  But  the  doctrine  of  this  case 
should  not  be  extended  beyond  the  substantial  facts  of  it.2  A 
man  obtained  a  contract  of  insurance  on  his  life,  payable  "to 
his  wife,  M.,  or  to  his  heirs  at  law."     At  the  time   he  was 

1  Story  v.  Association.  OoN.  Y.  474;       sSchnook    v.  Sons   of    Benjamin, 
seeVivarv.  Supreme  Lodge,  52  N.  J.    sit2>ra. 
L.  445;  20Atl.  Rep.  06. 


348  CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY. 

cohabiting  with  M.,  and  had  married  her,  but  the  marriage 
was  void  because  he  had  a  former  wife  living  and  undivorced. 
On  a  bill  of  interpleader  it  was  held  that  M.,  and  not  the  legal 
wife,  was  entitled  to  the  fund.1 

§181.  In  a  certain  case 2  the  testimony  showed  that  the 
deceased  member  and  the  complainant  had,  for  ten  years  prior 
to  the  death  of  the  member,  lived  together  as  husband  and 
wife,  though  no  marriage  ceremony  had  ever  been  performed; 
that  they  lived  together  as  husband  and  wife  continuously 
during  those  years  in  the  same  house,  recognizing  each  other 
as  such,  and  being  so  recognized  by  their  friends  and  neigh- 
bors, he  providing  for  her  as  husband,  and  she  taking  care  of 
the  household,  duties.  While  in  that  relation,  he  took  out  an 
insurance  in  her  name  as  Mrs.  Nellie  Brooks.  The  court  held 
that  the  mere  name  in  which  he  took  out  the  contract  of  in- 
surance did  not  change  the  mutual  relations  of  the  parties, 
that  they  were,  under  the  laws  of  Missouri,  husband  and  wife, 
and  that  she  had  an  insurable  interest,  and  could  maintain  the 
action. 

§182.  On  July  5,  1870,  a  society  issued  to  H.  M.  Case  a 
certificate  of  membership.  At  the  foot  thereof,  and  under- 
neath the  signature,  appeared  the  following :  "All  pay- 
ments or  benefits  that  may  accrue  or  become  due  to  the  heirs 
of  the  person  insured,  by  virtue  of  this  policy  will  be 
payable  to  Mrs.  H.  M.  Case  or  lawful  heirs."  At  the  time 
this  certificate  was  issued  to  II.  M.  Case,  he  had  a  wife  living 
by  the  name  of  Amelia  M.  Case,  and  a  daughter  by  the  name 
of  Inez  H.  Case.  His  wife,  Amelia  M.,  died  September  12, 
1878,  and  subsequently,  and  on  the  3d  day  of  February,  1882, 
he  was  again  married.  Subsequently,  and  on  May  29,  1885, 
he  died,  leaving  Emma  (his  second  wife)  his  widow,  and  Inez 
H.,  his  only  child  and  heir-at-law,  surviving  him.  The  daugh- 
ter sued  the  society  for  the  benefit  fund.  The  society  paid 
into  court  the  sum  of  $2,922.55  as  the  amount  of  benefits  due 
under  the  certificate,  and  the  widow,  Emma,  was  made  de- 
fendant. 

The  court  said :  ';  The  question  presented  is  whether  the 
plaintiff  or  the  defendant  is  entitled  to  the  money  so  paid  into 

1  Overbeck  v.  Overbeck,  155  Pa.  St.  5  Watson  v.  Association,  21  Fed. 
5;  25  Atl.  Rep.  610.  Rep.  698. 


CONSTRUCTION   OF   DESIGNATION    OF   BENEFICIARY.  349 

court.  There  was  no  new  designation  of  a  beneficiary  after 
the  certificate  was  issued,  or  after  the  death  of  the  first  wife. 
That  which  we  have  quoted  at  the  foot  of  the  certificate  was 
the  designation  made  at  that  time.  It  was  "  Mrs.  H.  M.  Case, 
or  lawful  heirs,"  meaning  Mrs.  H.  M.  Case,  or  in  case  she  was 
unable  to  take  by  reason  of  death  or  other  disability,  his  law- 
ful heirs  should  become  the  beneficiary.  It  is  now  contended 
that  Mrs.  II.  M.  Case  was  the  name  of  the  defendant,  his 
widow,  and  that,  consequently,  she  is  the  beneficiary  named  in 
the  certificate.  We  can  not  assume  that  he  then  contemplated 
the  death  of  his  wife,  and  his  subsequent  marriage  to  the  de- 
fendant in  this  action.  If  Amelia  M.  Case  was  the  person  in- 
tended by  the  designation  upon  the  certificate,  then,  on  her 
death,  the  designation  lapsed  as  to  her,  and  his  lawful  heir, 
which  was  Inez  II.  Case,  became  the  person  designated  as  the 
beneficiary,  and  inasmuch  as  there  has  been  no  subsequent 
designation  of  any  other  person,  it  follows  that  she  is  entitled 
to  the  money.  It  is  urged  that,  because  the  words  "  Mrs.  II.  M. 
Case"  were  used,  it  was  intended  that  the  certificate  shoidd 
mean  one  person  at  one  time,  and  another  at  another  time; 
that  it  meant  Amelia  M.  at  the  time  it  was  issued,  but  that  it 
meant  the  defendant  at  time  of  his  death.  Such,  however, 
does  not  appear  to  us  to  have  been  the  meaning  of  the  instru- 
ment." '  But  the  contract  may  be  so  worded  as  to  entitle  the 
widow  by  the  second  marriage  to  receive  the  fund.  Thus,  in 
one  case2  the  by-laws  provided  that,  on  the  death  of  a  member, 
"  the  person  designated  before  death,  or  his  widow,  child,  or 
children,  mother,  *  *  as  the  case  may  be,  and  in  the 
order  named,"  should  receive  the  insurance.  By  the  terms  of 
the  certificate  the  fund  was  to  be  paid  to  "Sarah  Given,  my 
wife."  Sarah  Given  died,  leaving  her  husband  surviving  her, 
and  he  afterward  married  again.  He  made  no  change  as  to 
his  beneficiary,  but  died,  leaving  his  widow  by  his  second  mar- 
riage, two  childeren  by  his  first  and  one  by  his  second  wile. 
It  was  held,  that  the  appointment  of  his  first  wife  as  his  bene- 
ficiary was  revoked  by  her  death,  and  that  the  widow  by  the 
second  marriage  was  entitled  to  the  insurance  under  the  by- 

•Day.  Guardian,  v.  Case,  43  Hun   71  Wis.  547;  37  N.  W.  Rep.  817;  see 
(N.  Y.)  179.  §  177. 

.  8  Given  v.  Wisconsin  Odd  Fellows, 


350  CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY. 

laws.  In  another  case,1  the  certificate  was  payable  to  the 
member's  wife,  Elizabeth  Riley,  or  to  such  other  person  as 
might  be  entitled  to  receive  the  insurance.  She  died,  leaving 
her  husband,  and  several  children  surviving  her.  The  mem- 
ber afterward  married  again,  and  died  without  making  any 
change  in  his  certificate.  In  a  suit  upon  the  contract  of  insur- 
ance, this  widow  by  the  second  marriage,  and  his  children  by 
his  first  wife  claimed  the  benefit  fund.  The  by-laws  of  the 
society  declared  that  its  object  was  to  afford  financial  aid  to 
the  widows,  orphans  and  heirs  of  deceased  members,  or  to  such 
person  as  might  be  designated  by  the  member,  and  that,  on 
the  death  of  a  member,  his  widow  or  designated  heirs  should 
receive  the  insurance.  It  was  held  that  under  the  by-laws  the 
widow,  and  not  his  children  by  his  first  wife,  was  entitled  to 
the  fund. 

§  183.  Where  a  certificate  is  made  payable  to  the  widow  of 
a  deceased  member,  she  does  not  forfeit  her  right  to  the  benefit 
fund,  by  living  in  adultery.  The  analogy  of  a  statute  respect- 
ing the  forfeiture  of  dower  for  the  misconduct  of  the  wife  is 
not  applicable  to  a  case  of  this  nature.  She  is  entitled  to  the 
fund  by  contract,  not  by  reason  of  the  relation  of  husband 
and  wife.2  A  woman  who  is  married  to  a  man,  but  illeg-allv, 
because  he  had  a  former  wife  living  at  the  time,  has  an  in- 
surable interest  in  his  life.3  But  if  there  is  a  breach  of  war- 
ranty, by  reason  of  the  falsity  of  the  statement  in  the  appli- 
cation, that  the  assured  and  the  beneficiary  are  husband  and 
wife,  there  can  be  no  recovery  on  the  policy.4  An  applicant 
for  insurance  was  required  to  state  in  his  application  the 
name  of  the  person  to  whom  he  desired  the  fund  to  be  paid, 
and  the  relationship  of  that  person  to  him.  He  responded : 
"  To  my  wife,  Emily  Louisa  Vivar."  By  its  certificate  the 
society  promised  to  pay  the  fund  "  to  Emily  Louisa  Vivar,  his 
wife,  as  directed  by  said  brother  in  his  application,  or  to  such 
other  person  or  persons  as  he  may  subsequently  direct  by  will 

'Riley  v.  Riley  et  al.,  75  Wis.  464;  4Holabirdv.  Ins.  Co., 2  Dill.  166;  2 
44  N.  W.  Rep.  112.  Ins.  Law  Jour.  588;  Supreme  Coun- 

2  Shamrock  Benevolent  Society  v.  cil  v.  Green,  71  Md.  263;  17Atl.  Rep. 
Drum,  1  Mo.  App.  220.  1048. 

3  Equitable  Society  v.  Peterson,  41 
Ga.  338;  Durianv.  Central  Verein,  7 
Daly  168. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIAKY.  Ool 

or  otherwise."  It  was  held  that  under  the  language  of  the 
contract,  the  statement  was  a  representation  and  not  a  war- 
ranty; that  the  relationship  of  the  payee  was  not  material, 
and  was  not  deemed  material  by  the  society,  and  that  she 
could  recover  the  benefit  fund,  though  the  applicant  knew 
that  she  was  not  his  lawful  wife.' 

The  statements  in  the  application  were  warranted  to  be 
true,  and  the  application  contained  the  following :  "  Write 
policy  payable  in  the  case  of  death  *  *  *  to  Mrs.  Fred. 
Martin,  whose  relation  tome  is  that  of  wife."'  Martin,  the  in- 
sured, was  a  single  man.  The  court  said  :  "  We  think  this 
statement  is  neither  a  warranty  nor  a  material  representation. 
It  was  merely  an  indication  of  the  person  to  whom  the 
policy  was  to  be  payable  in  case  of  death.  Even  if  marriage 
had  not  taken  place,  it  may  have  been  in  contemplation,  and 
the  insertion  of  "  wife  "  as  beneficiary  would  thus  have  been 
reasonable,  and  also  a  matter  of  convenience,  in  case  marriage 
should  take  place  before  expiration  of  policy.  In  any  case 
it  could  add  nothing  to  the  gravity  of  the  risk;  neither  could 
it  lessen  it.     The  representation  was  not  material." 2 

§  1S4.  Fund  payable  to  wife  "  for  the  benefit  of  herself 
and  the  children  of  said  member." — A  certificate  of  mem- 
bership in  a  mutual  benefit  society,  the  purpose  of  which  is  to 
pay  death  benefits  to  the  widows  and  orphans  of  deceased 
members  and  to  other  persons  shown  to  be  dependent  on  mem- 
bers, was  made  payable  to  the  member's  widow*  "  for  the  ben- 
efit of  herself  and  the  children  of  said  member."  When  the 
certificate   was  issued,   the  member  had   two  children    by  a 

1  Vivar  v.  Supreme  Lodge,  52  N.  J.  Association,  21  Fed.  Rep.  60S:  Fitz- 

L.  445;  20  Atl.  Rep.   36;  citing  Ins.  patrick   v.    Ins.    Co.,    56   Conn.  116; 

Co.  v.   Day,  39  N.  J.  L.  89;  Fitch  v.  Supreme  Council  v.  Bennett,  47  N. 

Ins.  Co.,  59  N.   Y.    557;    Anders  v.  J.  Eq.  39;  19  Atl.  Rep.  785;  Supreme 

Supreme  Lodge,  51   N.  J.  *L.  175;  17  Council  v.  Green,  71  Md.  263;  17  Atl. 

Atl.  Rep.  119;  2  Pars.  Cont.  769;  An-  Rep.  1048;  Britton  v.  SupremeCoun- 

dersonv.  Fitzgerald,  4H.L.  Cas.  184;  cil,  46  N.  J.  Eq.  102;   18  Atl.  Rep. 

Valton  v.  Association,  20  N.  Y.  32;  675;  Keener  v.  Grand  Lodge,  38  Mo. 

Ins.  Co.  v.  Martin,  40  N.   J.  L.   568;  App.  543;  Supreme  Lodge  v.  Butch- 

see  Durian  v.  Central  Verein,  7  Daly  inson,  6  Ind.  App.   899;  33  N.  East. 

168.     As  to  the  effect  of  a  falsr  state-  Rep.  816;  Standard  Life  v.   Martin, 

ment   of   relationship,    see  Vivar  v.  133  lnd.  376;  33  N.  Ea.st.  105. 

Supreme  Lodge,  supra;    Durian   v.  '  Standard  Life  ▼.  Martin,  183  Ind. 

Central   Verein,    supra;    Watson  v.  '370;  33  N.  East.  Rep.  105. 


352  CONSTRUCTION    OF   DESIGNATION   OF   BENEFICIARY. 

former  wife;  and  at  his  death  he  left  them,  and  a  child  by  his 
second  wife  who  also  survived  him.  At  his  death  his  eldest 
child  had  been  married  and  had  lived  at  her  own  home  for 
four  years.  Upon  these  facts,  the  court  said  :  "  In  the  first 
place  it  is  plain  that  the  widow  is  not  entitled  to  hold  this 
money  absolutely.  Even  under  similar  language  in  a  will,  the 
children  would  have  a  right  which  they  could  enforce  in  a 
court  of  equity.1  There  is  nothing  to  show  that  it  was  in- 
tended that  the  sums  to  be  devoted  to  the  benefit  of  the 
children  should  be  in  the  first  instance  determined  by  her 
in  her  discretion,  subject  to  accountability.  There  are  no 
words  saying  that  it  shall  be  at  her  disposal  for  their 
benefit,  or  that  she  is  to  miintain  or  support  them.  In  the 
purposes  of  the  (society),  children  are  placed  on  an  equality 
with  widows.  There  is  nothing  showing  any  intention  to 
have  a  permanent  or  continued  trust.  The  words  of  the  cer- 
tificate are  simple.  She  is  to  take  the  money  '  for  the  benefit 
of  herself  and  the  children.'  In  many  of  the  cases  under  wills, 
there  was  something  to  show  some  discretion  reposed  in  the 
primary  donee,  or  some  duty  to  support,  or  some  power  of 
disposal;  but  here  there  is  nothing  of  the  kind.  Several  of 
the  cases  under  wills  tend  strongly  to  show  that  under  lan- 
fua<relike  this  the  widow  and  the  children  would  be  entitled 
to  share  equally.2  In  the  present  case,  in  view  of  the  circum- 
stances, and  of  the  bold  language  used  in  the  certificate,  we 
can  not  go  behind  the  plain  words,  and  are  of  opinion  that  (the 
widow)  and  three  children  are  each  entitled  to  one-fourth  part 
of  the  money.  The  circumstance  that  (one  of  the  daughters) 
was  married,  and  had  left  her  father's  house,  does  not  cut  her  off. 
It  would  not  necessarily  do  sounder  a  devise.  Under  this  cer- 
tificate, her  rights  do  not  at  all  depend  upon  the  question 
whether  she  was  forisfamilated  or  not."  3  The  by-laws  of  a  so- 
ciety provide  that  "  the  sum  due  upon  the  policy  of  a  deceased 
member  of  the  company,  shall  be  paid  to  the  widow  *  * 
for  the  use  of   herself  and  the   dependent  children  of  the  de- 

1  Proctor  v.  Proctor,  141  Mass.  165;  v.  Loring,  supra;  Jubber  v.  Jubber, 
6  N.  East.  Rep.  849;  Loring  v.  Lo-  9  Sim.  503;  Jones  v.  Foote,  137  Mass. 
ring,  100  Mass.  340;  Raikes  v.  Ward,    543. 

1   Hare  445;  In  re  Harris,  7    Exch.       8Jackman  v.  Nelson,  147  Mass.  300; 
344.  17  N.  East.  Rep.  529. 

2  Proctor  v.  Proctor,  supra;  Loring 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  353 

ceased."  They  declare  the  intention  to  be,  to  keep  from,  want 
the  families  of  its  members,  and  to  keep  them  from  be- 
coming a  burden  to  the  society;  and  they  provide  that,  "  in 
no  case  shall  a  member  dispose  of  his  policy  by  will  or  other- 
wise, so  as  to  deprive  his  widow  or  his  dependent  children  of 
its  benefits.'"  A  member  by  his  will  gave  $1,000  of  his  policy 
to  his  wife,  and  the  remainder,  about  §3,000,  to  his  infant  son, 
for  his  education,  etc.  After  the  death  of  the  member  the 
widow  declined  to  take  under  the  will,  and  claimed,  as  the 
proper  construction  of  the  by-laws  that  the  sum  due  must  be 
equally  divided  between  herself  and  the  child,  share  and  share 
alike,  and  that  the  testator  had  no  power  to  dispose  of  it  in 
any  other  proportions.  But  the  court  held  otherwise,  and  said  : 
'•  Where  the  member  leaves  a  wife  and  dependent  children,  the 
money  must  go  to  tbeir  support,  according  to  their  necessities, 
so  as  to  keep  them  from  being  a  burden  to  the  brotherhood; 
and  as  one  may  be  more  dependent  than  another,  there  must 
be  a  reasonable  discretion  in  the  member  to  make  such  dis- 
criminations as  will  effect  the  main  purpose  of  the  policy;  and 
the  division  need  not  be  made  share  and  share  alike.  This 
construction  is  strengthened  by  the  fact,  that  when  the  mem- 
ber leaves  no  widow,  and  his  family  is  broken  up,  then  the 
money  is  directed  to  be  divided  out  among  his  children  or 
other  relations,  '  share  and  share  alike,'  but  there  is  no  such 
direction,  if  there  is  a  widow.  We  do  not  see  any  unreasona- 
ble exercise  of  this  discretion  on  the  part  of  the  testator."  (It 
was  admitted  that  the  widow  had  a  separate  estate  of  $2,000 
worth  of  land.)  "  The  widow  was  otherwise  provided  for  to  an 
amount  which,  if  added  to  the  $1,000  given  in  the  will,  would 
make  her  more  than  equal  with  the  child;  and  the  child  has  to 
be  educated.  The  widow  having  already  received  the  $1,000 
left  in  the  will,  she  is  not  entitled  to  any  more."  ' 

§  185.  Wife  and  children.8— A  policy  was  taken  out  by  B. 
"for  the  use  of  his  wife,  Sarah,  and  children."  and  the  policy 
provided  that  in  case  Sarah,  the  wife,  should  die  before  her 
husband,  the  amount  of  the  insurance  should  be  payable  to 
"their  children."  The  wife  died  leaving  her  husband  and  a 
child  surviving.     B.,  the  assured,  married  again,  and  of  this  su !  >- 

1  Roberts  v.  Roberts,  Ext,  64  N.  C.        *  See  §  209. 
695. 

23 


354  CONSTRUCTION   OF    DESIGNATION    OF    BENEFICIARY. 

sequent  marriage  one  child  was  born;  it  was  held  that  the 
child  of  the  assured  by  his  wife,  Sarah,  was  entitled  to  the 
whole  insurance.1  A  member  of  a  society  took  out  a  policy 
of  insurance  providing  that  the  proceeds  should  "  be  paid  to 
his  wife,  Maglien  Koehler,  and  children."  The  member  had 
children  by  a  former  wife,  and  one  child  by  his  wife,  Maglien, 
and  she  had  one  child  by  a  former  husband.  The  question 
arose  as  to  which  of  all  these  children  were  entitled  to  par- 
ticipate in  the  benefits  of  the  policy.  The  supreme  court  of 
Iowa  said  :  "  If  we  were  to  construe  these  words  as  meaning 
Maglien  Koehler  and  her  children,  it  would  include  not  only 
her  child  by  her  second  marriage,  but  it  would  also  include  her 
child  by  her  first  marriage.  Such  a  construction  can  not,  we 
think,  be  the  true  one.  It  is  not  to  be  supposed  that  the  de- 
ceased intended  at  that  time  to  make  (her  child  by  her  first 
marriage)  the  object  of  his  bounty  to  the  exclusion  of  his  own 
children.  The  word  "  their"  can  not  be  held  to  be  the  proper 
one  to  designate  the  children,  because  it  is  an  improper  form 
of  expression.  In  order  to  sustain  the  interpretation  of  the 
circuit  court,  it  is  necessary  to  make  the  instrument  read  as 
follows :  '  to  his  wife,  Maglien  Koehler,  and  her  children  by 
him.'  We  do  not  think  this  is  the  plain  and  natural  construc- 
tion of  the  language.  We  think  it  should  be  to  his  wife  and 
his  children.  This,  it  appears  to  us,  is  not  only  the  plain  and 
obvious  construction,  but  it  accords  with  the  grammatical  sense 
of  the  words.  If  the  words  were  '  his  wife  and  children'  there 
would  be  no  doubt  that  the  meaning  would  be  his  wife  and  his 
children.  The  name  of  the  wife,  Maglien  Koehler,  is  thrown 
in  as  descriptive  of  the  person  and  not  as  designating  whose 
children  are  intended." 2 

An  insured  was  twice  married  and  by  both  wives  had  chil- 
dren. After  his  second  marriage  he  insured  his  life  "  for  the 
benefit  of  his  wife  and  their  children."  He  died  leaving  sur- 
viving him  his  second  wife,  five  children  by  her,  and  one  child 
by  his  first  wife.  The  court  below  held  that  this  child  by  the 
first  wife  was  entitled  to  share  the  proceeds  of  the  insurance 

1  Lockwood  v.  Bishop,  51  How.  Pr.  etc.,  66  Iowa  325;  see  also  to  the  same 
221;  see  Grand  Lodge  v.  Dater,  44  point  McDermott  v.  Life  Association, 
Mo.  App.  445.  24  Mo.  App.  73. 

2  Koehler    v.    Centennial    Mutual, 


CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY.  355 

equally  with  the  other  children,  and  on  appeal  it  was  said : 
"  Interpreting  the  policy  in  the  light  of  the  surrounding  cir- 
cumstances, as  such  instruments,  like  other  written  instru- 
ments, are  always  to  be  interpreted,  we  think  the  court  below 
correctly  so  held.  At  the  time  the  policy  was  issued,  she  was 
a  member  of  her  father's  household,  and  lived  with  him  until 
his  death.  She  was  an  afflicted  helpless  child,  and  wholly  de- 
pendent upon  him.  Upon  the  second  marriage  the  wife  as- 
sumed toward  her  the  relation  of  a  mother,  and  for  aught  the 
record  shows  to  the  contrary,  faithfully  discharged  the  duties 
incident  to  that  position  during  the  remainder  of  her  father's 
life.  For  years  before  his  death  *  she  was  an  object  of  great 
anxiety  and  solicitude  to  him.  To  the  motherly  care  of  his 
wife,  as  we  have  seen,  he  commended  her  in  his  will,  con- 
fident that  the  trust  would  not  be  abused.  It  is  incredible,  in 
view  of  the  facts  in  the  case,  that  when  insuring  his  life  to 
make  provision  for  his  wife  and  their  children,  he  intention- 
ally excluded  from  its  benefit  the  one  who,  of  all  of  them, 
was  most  likely  to  need  it." '  In  another  case  2  during  the 
life  of  his  first  wife,  an  insured  took  out  two  policies  of  insur- 
ance, payable  to  his  wife,  naming  her,  and  providing  that,  in 
tbe  event  that  she  died  before  he  did,  the  money  should  be  paid 
to  their  children.  She  died  leaving  several  children,  and  the 
insured  married  a  second  time.  He  afterward  died,  and  a  child 
was  born  to  his  second  wife  soon  after  his  death.  It  was  con- 
tended that  "  their  children"  meant  not  only  the  children  com- 
mon both  to  the  insured  and  to  his  wife,  but  also  the  children  of 
either  of  them,  and  that   therefore   the   child  of  the  second 

1  Stigler  v.  Stigler,  77  Va.  163;  tween  the  children  by  the  first  wife 
Fauntleroy,  J.,  dissenting.  During  and  the  child  of  the  second  wife  by 
his  second  marriage,  a  policy  was  her  former  husband.  It  will  be  no- 
issued  to  an  insured  "for  his  wife  ticed  that  there  was  no  person  who 
and  their  children."  He  died  leav-  strictly  answered  to  the  language  of 
ing  surviving  him  his  second  wife  the  policy,  their  children,  but  it  was 
and  his  children  by  his  first  wife,  substantially  interpreted  to. mean  the 
He  left  no  children  by  his  second  children  of  either  of  them.  Green- 
wife,  but  she  had  a  wrild  by  a  former  field  v.  Ins.  Co.,  Bliss  on  Life  Ins. 
husband,  and  there  was  also  an  ille-  (2d  ed.)  j;  345;  not  reported  in  New 
gitimate  child  of  the  insured.  The  York  Supreme  Court  Reports. 
supreme  court  of  New  York  gave  the  ■  Evans  v.  Opperman,  76  Texas  293; 
widow  one-half  of  tbe  fund  and  tbe  13  S.  W.  Rep.  312. 
other    half  was  divided   equally  be- 


35 G  CONSTRUCTION    OF    DESIGNATION   OF    BENEFICIARY. 

marriage  was  entitled  to  share  in  the  proceeds  of  the  policies. 
But  the  court  said :  "  We  do  not  assent  to  the  proposition. 
It  may  be  that,  by  an  inaccurate  use  of  the  words,  they  may 
be  sometimes  employed  in  the  sense  contended  for  by  appellee, 
and  that  under  peculiar  circumstances,  as  in  the  case  of  Stig- 
ler  v.  Stigler,'  to  which  counsel  refer,  they  were  properly 
construed  to  have  that  meaning.  We  think,  however,  the  ob- 
vious and  more  accurate  meaning  of  the  terms  is  the  children 
of  both  the  persons  referred  to.  They  could  not  have  been 
intended  to  include  any  other  children  of  the  wife,  because  she 
could  only  have  married  again  after  the  death  of  the  husband, 
and  after  the  policy  had  become  her  absolute  property.  If 
the  husband  had  intended  to  embrace  any  child  or  children  he 
may  have  had  by  a  second  wife,  his  meaning  would  have  been 
clearly  and  accurately  conveyed  by  providing  that  if  his  wife 
died  first  the  policy  should  be  payable  to  his  children.  By  the 
use  of  the  term  '  their  children,'  we  think,  was  meant  the  chil- 
dren common  to  both  husband  and  wife,  and  that  *  (the  child 
by  the  second  marriage)  was  entitled  to  take  nothing." 

A  certificate  of  membership  in  a  mutual  benefit  society  pro- 
vided, if  certain  conditions  were  observed  and  performed,  for 
the  payment  of  the  sum  of  $5,000  on  the  death  of  the  mem- 
ber, "  to  be  paid  as  a  benefit  to  his  wife,  L.  H.,  and  children 
equally."  The  member,  at  his  death,  left  his  wife  and  five 
children,  one  of  whom  died  after  suit  had  been  brought  on  the 
certificate  in  the  name  of  all,  leaving  his  mother  and  four 
brothers  and  sisters  as  his  only  heirs.  The  cause  proceeded  to 
judgment  in  the  names  of  the  widow  and  remaining  children,  , 
who  recovered  judgment  for  the  full  $5,000.  The  supreme 
court  of  Illinois  held  that  the  widow  and  remaining  four  chil- 
dren were  entitled  to  the  same  sum  as  though  she  and  all  the 
children  were  suing,  and  that  the  judgment  was  not  for  too 
much.  The  court  said  :  "It  is  insisted  it  was  error  of  law  to 
render  judgment  in  favor  of  the  widow  and  the  four  surviv- 
ing children,  for  the  reason  the  benefit  secured  was  to  be  paid 
to  the  widow  and  the  children  equally,  of  whom  the  proof  shows 
there  were  five  when  the  suit  was  brought.  The.  objection 
seems  to  be,  it  was  not  proper  to  render  judgmeat  for  full 
value  of  the  benefit  on  a  declaration  in  favor  of  the  widow 
and  four  children,  with  the  name  of  the  deceased  child  omitted. 

1  77  Va.  163. 


CONSTRUCTION   OF   DESIGNATION    OF   BENEFICIARY.  357 

It  is  not  perceived  there  was  any  error  in  so  rendering  the 
judgment.  There  are  two  views,  both  of  which  sustain  the  ac- 
tion of  the  trial  court :  First,  the  benefit  was,  by  the  certificate, 
secured  to  be  paid  to  the  widow  (by  name)  and  children — that 
is  to  Laura  Hoffman,  and  to  a  class  of  persons  designated  as 
children,  and  to  be  ascertained  after  the  death  of  the  holder  of 
the  certificate.  At  the  trial  it  was  found,  from  the  proof, 
there  were  but  four  children  surviving.  They  then  consti- 
tuted all  the  class  embraced  in  the  term  "  children '  and  it  was 
entirely  correct  to  render  judgment  in  their  favor,  as  was 
done.  Second,  were  this  not  so,  the  judgment  might  be  sus- 
tained for  another  reason.  It  provided  by  the  certificate, 
that,  in  the  event  of  the  prior  death  of  the  beneficiaries  named, 
the  benefit  should  be  paid  to  the  legal  heirs  or  devisees  of  the 
holder  of  the  certificate.  A  correct  reading  of  this  provision 
would  be,  in  case  of  the  prior  death  of  any  one  of  the  class 
designated  to  take  the  benefit,  the  heirs  of  the  holder  would 
take  the  share  of  the  deceased  party.  Here  the  plaintiffs  were 
the  heirs  of  the  holder,  and  they  took  the  whole  benefit,  and 
the  judgment  in  their  favor  was  regular  and  authorized  by 
law.'1  ' 

A  certificate  was  made  payable  to  the  wife  and  children  of 
the  member,  and  provided  :  "  In  case  of  the  death  of  the  said 
beneficiary  before  the  death  of  the  person  whose  life  is  assured, 
the  amount  of  the  assurance  shall  be  paid  at  maturity  to  the 
heirs  or  assigns  of  the  said  person  whose  life  is  assured.  The 
four  children  of  the  member  died  in  infancy,  and  he  died  Leav- 
ing his  wife  and  certain  brothers  and  sisters.  It  was  held  that 
the  widow  was  entitled  to  the  full  amount  of  the  fund." 2 

§  186.  "  Child." — In  the  construction  of  the  designation 
of  beneficiaries,  the  word  "child"  is  not  confined  to  persons 
under  the  age  of  majority,  and  where  a  certificate  of  insurance 
is  payable  to  the  children  of  a  deceased  member,  his  sons 
and  daughters  take  the  fund  in  equal  proportions,  without 
regard  to  their  ages  or  their  dependence  upon  the  deceased 
for  support.  This  rule  may,  of  course,  be  modified  by  the 
provisions  of  the  contract  of  insurance.  It  is  a  part  of  the 
general  plan  of  mutual  benefit  insurance  to  enable  the  insured 

1  Covenant  Mutual  Benefit  Associa-  9  Schneider  v.  Ins.  Co.,  33  Mo.  App. 
tion  v.  Hoffman,  110  111.  603.  64. 


358  CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY. 

to  assist  his  family,  whether  or  not  its  members  are  of  lawful 
age  or  dependent  upon  him,  but,  when  consistent  with  its  organic 
law,  it  is  proper  for  a  society  to  limit  its  benefits  to  minor 
chiklren,  and  to  those  who  are  dependent  upon  the  members 
for  support.  Where  there  is  no  such  limitation  in  the  laws  of 
the  society,  and  in  the  absence  of  an  expression  by  the  member 
in  his  certificate  of  a  purpose  to  limit  the  benefit  to  a  particu- 
lar class  of  his  children,  it  must  be  held,  on  the  plainest  prin- 
ciples, that  the  member  intended  to  extend  it  to  all  his  chil- 
dren in  existence  at  the  time  of  his  death.  It  would  be  so  held 
in  the  interpretation  of  a  will;  and  a  certificate  of  insurance, 
being  a  post-mortem  provision  for  the  persons  endeared  to  the 
member,  is  to  be  interpreted  upon  similar  principles.1  What- 
ever may  be  the  rule  in  ordinary  life  insurance,  where  the  rights 
of  the  beneficiary  named  become  vested  on  the  execution  of  the 
contract,2  it  would  seem  that,  under  the  general  plan  of  mutual 
benefit  insurance,  where  the  children  of  the  member  are  desig- 
nated as  his  beneficiaries,  the  children  to  whom  the  covenant 
extends  are  only  the  child  or  children  living  at  the  death  of  the 
member.3  Where  a  certificate  is  made  payable  to  the  children 
of  a  member  as  a  class,  those  of  the  class  will  take  who  are  in 
being  at  the  time  when  it  becomes  payable.4  A  contract  of 
insurance  is  not  void  for  uncertainty  because  the  beneficiaries 
are  designated  as  "  the  children  of  "  the  member  or  some  other 
person.5  Where  a  certificate  was  made  payable  to  the  wife  if 
she  survived  her  husband,  otherwise  "  to  their  children  for 
their  use,  or  to  their  guardian  if  under  age; "  where  the  wife 
did  not  survive  her  husband,  and  he  died  leaving  only  a  child 
by  adoption,  of  full  age,  and  the  circumstances  showed  that 
the  husband  and  wife  intended  that  he  should  be  included  in 
the  benefits,  the  adopted  child  was  held  to  be  entitled  to  all  the 
proceeds  of  the  contract.6 

1  McDermott  v.  Life  Association,  24  4  United  States  Trust  Co.  v.  Mutual 
Mo.  App.  73;  Felix  v.  Grand  Lodge,  Benefit  Life  Ins.  Co.,  115  N.  Y.  152; 
31  Kan.  81;  see  §  204.  21   N.  East.  Rep.  1025;  Lane  v.  De 

2  See  Connecticut  Mutual  v.  Bald-  Mets,  13  N.  Y.  Supp.  347;  Walsh  v. 
win,  15  R.  1. 106;  Continental  Life  v.  Ins.  Co.,  133  N.  Y.  408;  31  N.  East. 
Webb,  54  Ala.  688;  Continental  Life  Rep.  228;  Appeal  of  Brown,  125  Pa. 
v.  Palmer,  42  Conn.  60;  Hull  v.  Hull,  St.  303;  17  Atl.  Rep.  419. 

62  How.  Pr.  (N.  Y.)  100;  see  §  188,  6  Brooklyn  Life  v.  Bledsoe,  52  Ala. 
201.  538. 

3§§  187,  201.  *  Martin  v.  Ins.  Co.,  73  Me.  25. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  359 

§  187.     Children  born  after  the  issuing  of  the  certificate 

of  membership. — In  ordinary  life  insurance,  where  the  pro- 
curing of  a  policy  in  favor  of  a  certain  person  is  in  the  nature 
of  an  irrevocable  and  executed  voluntary  settlement  on  him, 
subject  to  the  performance  of  certain  conditions,  and  where 
the  interest  vests  in  the  beneficiary  at  the  moment  of  the  issue 
of  the  policy,  a  contract  payable  to  the  wife  and  children  of 
the  insured  does  not  extend  to  a  child  born  after  its  execution, 
but  only  to  those  in  being  at  that  time.1  The  general  object 
of  a  mutual  benefit  society,  as  expressed  in  its  charter  or  by- 
laws, may  make  applicable  to  the  contract  of  mutual  benefit 
insurance,  the  doctrine  in  respect  to  testamentary  bequests  to 
children,  payable  infuturo,  viz.:  That  the  bequests  are  pay- 
able to  them  as  a  class,  and  that  the  class  will  open  to  let  in 
after-born  children  to  participate.  A  widower  having  four 
children  applied  to  a  mutual  benefit  society  for  membership, 
and  in  his  application  directed  that  in  case  of  his  death  all 
benefits  should  be  paid  to  his  four  children,  whose  names  were 
therein  given.  He  afterward  married  and  died,  leaving 
another  child  by  his  last  wife.  The  certificate  issued  to  him 
was  made  payable  at  his  death  "to  his  children."  The  object 
of  the  society  was  to  establish  a  benevolent  relief  fund  to  pro- 
tect families  of  deceased  members,  and  to  assist  them  in  dis- 
tress, and,  by  the  terms  of  its  constitution,  the  benefit  fund, 
on  the  death  of  a  member,  was  payable  "  to  his  family  or  his 
heirs."  The  supreme  court  of  Texas  held :  (1)  The  right  to 
take  under  the  certificate  must  be  determined  by  its  language 
and  not  from  the  terms  used  in  the  application  for  member- 
ship. (2)  The  certificate,  which  on  its  face  inured  to  the 
benefit  of  his  heirs,  extended  the  scope  of  the  benefit,  and  by 
accepting  it  the  member  must  be  held  to  have  approved  its 
terms."  (3)  The  object  of  the  society  being  benevolent,  its 
consent  that  the  benefit  should  exclude  an  infant  born  after 
membership,  can  not  result  from  construction,  but  must  appear 
in  some  clear  and  explicit  way.  (4)  The  child  born  after  the 
issuance  of  the  benefit  certificate  was  entitled  to  share  in  the 
benefit,  equally  with  each  of  the  four  children  named  in  the 
application.     In   construing   the   contract   of   insurance,    the 

1  Connecticut  Mutual  v.  Baldwin.  15       ■  Sec  £  146. 
E.  I.  100;  33  Atl.  Rep.  105. 


360  CONSTRUCTION    OF    DESIGNATION   OF   BENEFICIARY. 

court  said :  "  The  case  presented  would  be  that  of  an  applica- 
tion for  a  certificate  for  the  benefit  of  certain  named  parties, 
and  the  issuance  of  a  certificate  for  the  benefit,  not  only  of  these, 
but  of  other  beneficiaries  also.  "What  would  be  the  effect  of 
such  a  transaction  I  The  applicant  would  not  be  bound  to 
accept  it,  but  if  he  did,  the  beneficiaries  would  be  those  des- 
ignated in  the  certificate,  and  not  those  named  in  the  appli- 
cation. It  would  be  a  case  where  a  proposition  for  a  contract 
was  made  by  one  party  to  another,  which  was  accepted  in  a 
materially  modified  form.  The  party  proposing  would  not  be 
bound  to  accede  to  the  altered  contract,  but  if  he  did,  it  would 
be  binding  upon  him  according  to  its  modified  terms. 
Thomas  did  accept  a  certificate  different  from  that  for  which 
he  applied,  and  it  would  seem  that  the  effect  of  the  contract 
was  to  entitle  all  of  his  children  to  participate  in  the  relief 
fund  upon  his  death,  and  not  those  only  who  were  alive  at  the 
time  the  certificate  was  issued. 

'•  But  the  appellee  contends  that  we  must  construe  the  appli- 
cation as  explanatory  of  the  certificate,  and  must  modify  the 
legal  sense  of  the  word  '  children,'  so  as  to  make  the  applica- 
tion and  the  certificate  harmonize  with  each  other;  that 
Thomas  having  applied  for  a  certificate  for  the  benefit  of 
all  his  children  then  in  existence,  and  the  society  having  issued 
him  a  certificate  for  the  benefit  of  '  his  children,'  we  must 
conclude  that  the  certificate  was  intended  to  accord  with  the 
application,  and  this  would  exclude  any  child  born  to  the 
applicant  in  the  future.  There  would  be  some  force  in  this 
suggestion,  if  we  are  to  look  to  the  application  and  the  certifi- 
cate as  alone  constituting  the  contract  between  the  parties. 
But  in  all  cases  of  contracts  formed  by  reason  of  obtaining 
membership  in  a  mutual  aid  society,  its  constitution  and  by- 
laws enter  into  the  contract,  and  it  must  be  read  in  the  light 
afforded  by  these  in  order  to  arrive  at  a  true  construction  of 
its  terms.  Article  2,  section  3,  of  the  constitution  of  the 
society  states  that  one  of  its  objects  is  '  to  establish  a  benev- 
olent and  relief  fund  for  the  protection  of  the  families  of  de- 
ceased members,  and  so  assist  them  in  distress  and  in  sickness.' 
Article  3,  section  2,  makes  the  benefit  money  payable  on  the 
death  of  a  member  to  '  his  family  or  his  heirs.'  By-law  num- 
ber seven  is  to  the  same  effect.     These  and  other  provisions 


CONSTRUCTION    OF   DESIGNATION    OF   BENEFICIARY.  3G1 

of  these  instruments  show  conclusively  that  one  of  the  main 
objects  of  the  society  is  to  confer  its  benefits  upon  the  entire 
family  of  a  member,  and  not  to  restrict  them  to  a  portion, 
to  the  exclusion  of  the  remainder.  *  *  It  may  be  that  a 
member,  with  the  express  consent  of  the  society,  could  di- 
rect his  benefit  money  to  be  paid  to  a  portion  of  his  family,  to 
the  exclusion  of  the  remainder,  but  the  consent  of  the  society 
would  have  to  appear  in  some  clear  and  unmistakable  way. 
It  would  not  appear  from  doubtful  words,  much  less  from 
those  whose  legal  construction  would  evidence  a  dissent  from 
the  member's  request,  and  issuance  of  a  certificate  more  in 
accord  with  the  spirit  and  intention  of  the  constitution  and  by- 
laws of  the  society.  *  *  We  think  the  certificate  on  its 
face  includes  after-born  children,  and  that  it  is  more  in  conso- 
nance with  the  spirit  and  intention  of  the  constitution  of  the 
society  to  so  construe  it,  than  to  exclude  from  its  benefits  the 
after-born  children  of  the  applicant."  ' 

But  where  the  beneficiaries  named  in  the  certificate  are  the 
member's  three  children,  all  he  then  has,  an  after-born  child 
can  not  claim  a  share  of  the  fund,  on  the  ground  that  the  ob- 
ject of  the  society,  as  expressed  by  its  laws,  is  to  afford  aid  to 
the  "widows,  orphans  and  heirs,  or  devisees"  of  a  deceased 
member,  for  the  member  has  a  right  to  designate  the  benefi- 
ciaries within  any  one  or  more  of  these  classes.2 

§  188.  Child,  grandchild. — It  may  be  laid  down  as  a  gen- 
eral rule  that  the  word  ''child"  does  not  embrace  a  errand- 
child.3  But  to  this  rule  there  are  two  classes  of  cases  which 
form  exceptions :  First,  where  the  will  or  writing  would  oth- 
erwise be  inoperative,  or  the  manifest  intention  would  be  de- 
feated; second,  when  the  will  or  writing  shows,  by  other 
words,  that  the  word  was  not  used  in  its  ordinary  and   proper 

•Thomas  v.  Leake,  67  Texas  469;  atta,  21    N.  J.  Eq.   84;    Mowatt   v. 

8    S.    W.    Rep.   708;  see    Rickei   v.  Carow,    7     Paige     828;    Cutter    v. 

Charter  Oak,  etc.,  27 .Minn.  198.  Doughty,   2:5  Wend.  522;  Thompson 

•Spry  v.  Williams,  82  Iowa  61;  47  v.  Ludingten,  L04  Mass.  198;  i  Roper 

N.  W.  Rep.  890.  mi  Leg.  69;   I  Kenl  845;  Continental 

•Churchill  v.Churchill,  2  Met.  469;  Ins.  Co.  v.  Webb,  54   Ala.  688;  Kus- 

Hughea  v.  Hughes,  L2  B.   Mon.   121;  sell  v.  Russell,  64  Ala.  500;    United 

Hallowell  v.  Phipps,  9  Wharton  (Pa.)  stairs  Trust  Co.  v.Ins.  Co.,  1 15  N.  Y. 

876;  Jackson   v.   Staats,  11  Johnson  152;  21  N.   East  Hep.  1025;    Lane  v. 

(N.  Y.)  337;  Feit's  Executor  v.  Van-  DeMete,  18  N.  Y.  Supp.  847. 


362  CONSTRUCTION   OF    DESIGNATION    OF    BENEFICIARY. 

sense,  but  in  a  more  extended  sense.  In  Duvall  v.  Goodson,1 
the  charter  of  the  Kentucky  Masonic  Ins.  Co.,  providing  that,  if 
the  member  "  should  leave  no  widow  or  child  then  (the  fund) 
to  be  appropriated  according  to  his  will,  or  if  he  makes  no 
will  and  leaves  no  widow  or  child,  it  shall  vest  and  remain  in 
the  company,"  was  the  subject  of  construction,  and  the  court 
held  that  where  a  member  died  leaving  no  widow  or  children, 
but  leaving  a  grandchild,  the  word  "child,"  in  the  charter  em- 
braced grandchild,  as  to  hold  otherwise  would  defeat  the 
manifest  intention  of  the  members  of  the  company.3  In  Con- 
tinental Life  v.  Palmer,3  the  policy  was  payable  to  the  wife,  if 
she  survived  her  husband;  if  not,  to  their  children.  The  hus- 
band survived  the  wife,  and  one  of  the  children  died  during  the 
life  of  the  father,  leaving  issue.  It  was  held  that  the  issue 
took  the  interest  to  which  his  father  would  have  been  enti- 
tled, if  he  had  survived  the  insured.4    . 

1  79  Ky.  224.  her  intention  it  would  have  been  easy 
2SeeEobinson  v.  Duvall,  79  Ky.  83;  to  express  it  in  unmistakable  terms, 
see  §§  186,  201,  204.  Had  the  policy  been  payable  to  her 
3 42  Conn.  60;  5  L.  &  A.  Cases  87.  "surviving  children,"  or  to  those 
4  In  this  case  the  court  said  :  This  <<  wno  should  be  living  "  at  the  death 
instrument,  being  testamentary  in  its  0f  the  insured,  it  would  have  re- 
nature,  should  be  interpreted  by  the  moved  all  doubt.  But  supposing,  as 
same  rules.  Therefore,  as  in  wills  of  she  doubtless  did,  that  all  her  chil- 
doubtful  meaning,  one  construction  dren  would  survive,  the  policy  was 
being  in  harmony  with  the  statute  made  payable  to  them  generally, 
and  the  other  contrary  to  it,  prefer-  And  now  a  contingency  has  arisen 
ence  is  given  to  the  former,  so  this  which  manifestly  was  not  contem- 
con tract  shall  receive  an  interpreta-  plated.  If  the  natural  presumption 
tion.  if  possible,  which  will  dispose  of  can  not  be  regarded  as  a  legal  pre- 
the  fund  according  to  the  law  of  de-  sumption,  and  the  law,  to  meet  the 
scent.  We  think  there  is  no  dim-  contingency,  is  compelled  to  interpo- 
culty  in  so  interpreting  it.  There  is  late  in  the  contract  a  provision,  either 
a  natural  presumption  that  the  par-  limiting  the  payment  to  the  surviving 
ties  so  intended  it.  When  we  con-  children,  or  including  as  payee  the 
sider  that  it  was  a  mother  who  made  issue  of  a  deceased  child,  we  think 
this  contract,  and  who  probably  paid  both  reason  and  justice  require  the 
the  premiums,  we  can  not  possibly  latter.  It  requires  no  argument  to 
presume  that  she,  had  her  attention  show  that  it  is  just.  Its  reasonable- 
been  called  to  it,  and  had  she  known  ness  is  equally  apparent  when  we 
that  the  child  of  one  of  her  children  consider  the  nature  and  object  of  the 
would  become  an  orphan  before  the  estate,  and  the  relation  to  it  of  the 
policy  became  payable,  would  inten-  parties  concerned.  There  is  another 
tionally  deprive  such  child  of  all  in-  view  which  may  be  taken  of  this 
terest  in  the  policy.     Had  such  been  case,  and  which  will  lead  us  to  the 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  363 

Where  a  life  insurance  policy  was  issued  on  the  life  of  the  hus- 
band for  the  use  of  his  wife,  and,  if  she  died  before  him,  the 
amount  of  insurance  was  payable  "  to  her  children  for  their  use, 
or  to  their  guardian  if  under  age,"  and  the  wife  died  before 
her  husband,  it  was  held  that  a  grandchild  of  the  insured, 
the  issue  of  one  of  the  children  who  had  died  before  his 
mother,  was  entitled  to  a  share  under  the  policy.'  The  court 
said :  "  By  the  policy  in  question  an  irrevocable  trust  was 
created  in  behalf  of  Mrs.  Hull  and  her  children.  The  same 
principles  should  be  applied  in  its  construction  which  govern 
testamentary  disposition  of  property.  The  intention  is  clear 
that  in  the  event  of  Mrs.  Hull's  death  before  the  falling  in  of 
the  policy,  it  was  to  enure  to  the  benefit  of  her  children  gen- 
erally. There  is  no  limitation  to  class  or  condition,  nor  to 
living  or  surviving  children.  Evidently  this  phraseology  was 
intended  to  include  the  children  of  a  deceased  child."  2  The 
by-laws  of  a  mutual  benefit  society  provided  that  on  the  death 
of  a  member  a  sum  of  money  should  be  paid  "  to  the  widow 
of  such  member,  if  there  be  one;  if  he  leaves  no  widow,  then 
to  the  child  or  children  or  to  their  lawful  guardian  for  them, 
share  and  share  alike.  Should  the  deceased  member  leave  no 
widow,  child  or  children,  the  money  shall  be  paid  to  such  per- 
son as  he  may  have  designated  in  writing."  In  construing 
the  meaning  of  the  words  "  child  or  children,"  the  supreme 
court  of  Rhode  Island  held  that  they  must  be  taken  in  their 

same  result.     The  moment  this  policy  364;    Redfield  on  Wills,    390;  Keller 

was  executed  and  delivered,   it  be-  v.  Gaylor,40  Conn.  343;  Conn.  Mutual 

came  property,    and  the  title  to  it  v.  Burroughs.  34  Conn.  3G5j  and  the 

vested      in     some     one.     *    *    The  other  cases:  Park,  C.  J.,  dissented, 
payees  consist  of  two  parties,  the  wife       '  Hull  v.  Hull,  62  How.  Pr.  mo.    It 

and  the  children.     *     *     Each   party    will    be    observed   that   this    decision 

took  a  conditional,  not  an  absolute,  is  placed  upon  grounds  which  do  not 
right  to  the  whole  policy.  It  was  exist  under  the  general  plan  of  mu- 
not  a  condition  precedent, bujt  subse-  tual  benefit  insurance,  namely;  An 
quent.  The  title  vested  in  point  of  irrevocable  trust,  and  the  vested  in- 
right  immediately,  hut  was  liable  to  terest  of  the  beneficiaries  at  the  mo- 
be  divested  upon  the  happening  of  a  inent  of  the  issuing  of  the  policy, 
subsequent  event.  That  such  a  right  2  But  see  Palmer  v.  Horn,  si  x.  v. 
is  recognized  as  property,  and  is  576;  Magaw  v.  Field,  48  N.  Y.  668; 
transmissible  to  heirs,  is  a  proposition  Sherman  v.  Sherman,  3  Barb.  (N.  Y.) 
abundantly  established  by  the  an-  887;  in  which  cases  it  was  held  that 
thorities;  citing  Winslow  v.  Goodwin,  the  children  under  the  provisions  of 
Met.  363;  Fearne  on  Remainders,  certain  wills  took  as  class)  - 


3G4  CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY. 

primary  meaning,  and  could  not  be  extended  to  include  grand- 
children.1 

§  189.     Heirs,    legal    heirs,    heirs    at   law. — The   word 

"  heirs "  is  frequently  used  in  the  statutes  providing  for  the 
organization  of  mutual  benefit  societies  and  in  the  certificates 
of  insurance  issued  by  such  societies  to  indicate  a  class  of  per- 
sons who  may,  or  the  persons  who  shall  receive  the  benefit 
fund  on  the  death  of  the  member.  It  often  becomes  necessary, 
therefore,  to  determine  who  are  the  heirs  of  the  deceased 
member.  At  common  law  one's  heirs  are  the  persons  who 
would  inherit  his  real  estate  by  right  of  blood.  The  statutes 
of  adoption  and  those  of  descent  have,  in  every  state,  to  a 
greater  or  less  degree,  enlarged  the  meaning  of  the  word,  so 
that  it  may  include  persons  not  of  the  blood  of  the  intestate. 
At  common  law  the  word  had  no  reference  to  the  distribution 
of  any  personalty,  and  this  rule  has  not  been  disturbed  by 
statute  in  some  states.  In  those  states,  therefore,  where  this 
common  law  rule  obtains,  the  word  "  heirs  "  in  a  statute  set- 
ting forth  a  class  of  persons  who  may  take  the  fund,  or  in  a 
certificate  designating  the  persons  who  shall  take  the  fund  on 
the  member's  death,  might,  possibly,  be  taken  to  mean  the 
person  or  persons  to  whom  the  real  estate  of  the  member 
would  pass,  under  the  statutes  of  descent,  whether  such  per- 
sons be  akin  to  him,  or  not.  But  in  this  connection,  reference 
may  be  made  to  the  well  settled  principle  that  the  word 
"  heirs  "  is  flexible,  and  that  in  the  construction  of  wills,  in  the 
case  of  personalty,  it  is  taken  to  mean  next  of  kin.8  In  most 
states,  however,  the  statutes  provide  not  only  who  shall  in- 
herit the  realty  of  an  intestate,  but  also  who  shall  be  the  heirs  of 

1  Winsor  v.  Odd  Fellows,  etc.,  13  241;  Irwin's  Appeal,  106  Pa.  St.  176, 
R.I.  149;  see  also,  Lane  v.  De  Mets,  182;  Eisman  v.  Poindexter,  52  Ind. 
13  N.  Y.  Supp.  347,  distinguishing  401;  Welsh  v.  Crater,  32  N.  J.  Eq. 
Continental  Life  v.  Palmer,  snpra.  177;   Hascall  v.  Cox,  49  Mich.  435; 

2  Vaux  v.  Henderson,  2  Jac.  &  but  see  Tillman  v.  Davis,  95  N.  Y. 
Walker's  Chancery  Rept.  388;  Ward  17,  where  the  authorities  defining 
v.Saunders,  3  Sneed  (Tenn.)  387;  "heirs"  and  "next  of  kin"  are  col- 
Hodge's  Appeal,  8  Weekly  Notes  of  lated,  and  the  English  doctrine,  and 
Cases,  209;  Gittings  v.  McDermott,  2  that  of  some  states,  holding  that 
M.  &  K.  69;  Mace  v.  Cushman,  45  those  words  include  a  widow,  is  dis- 
Me.  250;  Houghton  v.  Kendall,  7  Al-  approved.  Bishop  v.  Grand  Lodge, 
len  72;  Sweet  v.  Dutton,  109  Mass.  112  N.  Y.  627;  20  N.  East.  Rep.  562; 
589;  Furguson  v.  Stuart's  Ex'rs,  14  Walsh  v.  Walsh,  20  N.  Y.  Supp.  933; 
Ohio  140;    Eby's  Appeal,  84  Pa.  St.  see  §§  176,  197. 


CONSTRUCTION   OF   DESIGNATION   OF   BENEFICIARY.  3G5 

his  personal  property.  "When  the  same  persons  are  the  heirs 
of  both  the  real  and  the  personal  property,  the  question  as  to 
who  are  the  heirs,  and,  hence,  the  beneficiaries  in  a  contract 
of  mutual  benefit  insurance,  is  in  no  way  complicated  by  the 
statutory  provisions,  but  where,  under  the  same  facts,  the  per- 
sonal property  descends  to  other  persons  than  those  who  in- 
herit the  real  estate — where  the  heirs  of  the  personal  prop- 
erty are  not  the  same  persons  who  are  the  heirs  of  the  real 
estate,  the  first  question  to  be  determined  is,  who  are  to  be 
taken  as  the  beneficiaries,  the  heirs  of  the  personalty,-  or  the 
heirs  of  the  realty? 

In  the  case  of  Alexander  v.  Association,1  a  member  died 
holding  certificates  of  membership  in  a  society  for  $8,500,  pay- 
able to  his  heirs  at  law.  He  left  no  child  or  descendant  of  a 
child;  but  left  a  widow,  father  and  mother,  one  sister  and  three 
brothers.  The  charter  of  the  society  recited  that  it  was  formed 
"  to  secure  pecuniary  aid  to  the  widows,  orphans,  heirs  or  dev- 
isees of  deceased  members."  Section  1  of  chapter  39  of 
Statutes  of  Illinois  provides  as  follows :  "  Second.  Where 
there  is  no  child  of  the  intestate,  nor  descendant  of  such  child, 
and  no  widow  or  surviving  husband,  then  (the  estates,  both 
real  and  personal,  of  intestates  shall  descend)  to  the  parents, 
brothers  and  sisters  of  the  deceased  and  their  descendants," 
etc.  "Third.  "When  there  is  a  widow  or  surviving  husband, 
and  no  child  or  children,  or  descendants  of  a  child  or  children 
of  the  intestate,  then  (after  the  payment  of  all  just  debts)  one- 
half  of  the  real  estate  and  the  whole  of  the  personal  estate 
shall  descend  to  such  widow  or  surviving  husband  as  an  abso- 
lute estate  forever,  and  the  other  half  of  the  real  estate  shall 
descend  as  in  other  cases,  where  there  is  no  child  or  children, 
or  descendants  of  a  child  or  children."  The  question  for  de- 
cision was,  who  are  the  heirs  of  the  decedent,  and  the  benefici- 
aries of  the  certificates  2  Under  the  third  clause  just  quoted, 
the  widow  takes  as  the  heir  of  her  deceased  husband.3  It  was 
held  in  the  courts  below  that  the  "widow  is  the  sole  heir  at 
law  to  the  personal  property  of  the  deceased,  and  the  other 
heirs  at  law,  the  father,  mother,  l>r<  ithers,  etc.,  have  no  right,  title 
or  interest  in  said  fund,  or  any  part  thereof,"  and  the  supreme 

1  126  111.  558;  18  N.  East.  Rep.  556.       'Sutherland  v.  Sutherland,  69  111. 

481;  Rawson  v.  Rawson,  52  111.  62. 


366  CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIAKr. 

court  of  Illinois  affirmed  the  judgment.1  It  is  manifest  that, 
in  such  a  case  as  the  one  under  consideration,  it  is  necessary  to 
hold  either  that  the  heirs  of  the  real  estate  are  the  benefici- 
aries, that  the  heirs  of  the  personal  estate  are  the  beneficiaries, 
or  that  the  heirs  of  the  real  and  personal  estate  are  entitled  to 
the  fund.  Of  course  the  fund  was  no  part  of  the  estate  of  the 
intestate,  but  if  it  had  been,  it  would  have  been  a  part  of  his 
personal  estate.  The  fund  is  personal  property.  As  was  said 
by  the  court  in  the  opinion :  u  In  placing  a  construction  on  the 
contract  of  the  parties  it  must  be  remembered  that  in  the  use 
of  the  words  named  in  the  policies  it  will  be  presumed  the 
parties  had  in  view  the  disposition  of  personal  assets,  and  not 
real  property,  as  they  were  dealing  only  with  the  disposition 
of  personal  assets." 

Where  a  member  has  made  his  heirs  the  beneficiaries  of  his 
insurance,  it  is  natural  to  conclude  that  the  heirs  of  his  per- 
sonal estate  are  entitled  to  the  fund.2  By  the  statutes  of 
descent  of  Tennessee,  the  real  estate  of  an  intestate  owner  is 
inherited  "  by  all  the  sons  and  daughters  of  the  deceased,  to 
be  divided  amongst  them  equally."  By  the  statutes  of  dis- 
tribution, thepersonal  property  of  an  intestate  owner  is  to  be 
distributed  "  to  the  widow  and  children  or  descendants  of  chil- 
dren representing  them,  equally,  the  widow  taking  a  child's 
share."  A  member  of  a  society  died  leaving  surviving  him  a 
widow,  three  children  and  two  grandchildren,  the  children  of 
a  son  who  died  before  him.  He  also  left  a  certificate  of  insur- 
ance payable  to  his  "  legal  heirs."  In  certain  litigation  which 
arose  concerning  the  benefit  fund,  it  became  necessary  for  the 
supreme  court  of  Tennessee  to  decide  who  were  the  beneficiaries 

'See  also  Lawwill  v.  Lawwill,  29  tificate  was  payable  to  the  heirs  of 

111.  App.  643.  a   member,   and  he  died  leaving  a 

2  See  Richards  v.  Miller,  62  111.  420;  widow,  but  no   children,  the    word 

Rawson  v.  Rawson,  52  111.  62;  Weisert  "  heirs"  was  construed  to  mean  those 

v.  Muehl,  81  Ky.   336;  Houghton  v.  designated    by   the  statutes  of  dis- 

Kendall,  7  Allen  72;  Sweet  v.  Dut-  tribution  to  take    the   surplus  per- 

ton,  109  Mass.  589;  Mace  v.  Cushman,  sonal  property  of  the  decedent.  John- 

45  Me.  250;  N.  W.  Masonic  v.  Jones,  son  v.  Supreme  Lodge,  53  Ark.  255; 

154  Pa.  St.  99;  26  Atl.  Rep.  253;  Bishop  13  S.  W.  Rep.  794;  Young  Men's  As- 

v.  Grand  Lodge,   112  N.  Y.  627;  20  sociation  v.  Pollard,  3  Ohio  Circuit  Ct. 

N.  East.  Rep.  562;  Britton  v.  Supreme  Repts.   577;  Leavitt  v.    Dunn  (N.  J. 

Council,  46  N.J.  Eq.  102;  18  Atl.  Rep.  Err.    and  App.),   28  Atl.    Rep.  590; 

675;  Codman  v.  Krell,  152  Mass.  214;  Lyons  v.   Yerek  (Mich.),   58  N.   W. 

25  N.  East.  Rep.  90.     Where  a  cer-  Rep.  1112. 


CONSTRUCTION    OF    DESIGNATION    OF   BENEFICIARY.  3G7 

named  in  the  certificate,  and  that  court  held  that  the  widow, 
children  and  grandchildren,  the  distributees  of  the  personal 
estate  of  the  intestate  under  the  statutes  of  distribution,  were 
the  beneficiaries  and  were  entitled  to  the  fund.'  Where  the 
heirs  at  law  of  the  member  are  his  beneficiaries,  the  word 
"heirs"  means  the  distributees  under  the  intestate  law  of  the 
domicile  of  the  member.2  Where  the  statutes  of  a  state  pro- 
vide different  courses  of  descent  for  ancestral  and  non-ancestral 
property,  every  reason  and  analogy  point  to  the  proposition 
that  a  benefit  fund  derived  by  contract  from  a  mutual  benefit 
society  shall  go  to  those  persons  who  are  the  heirs  of  the  non- 
ancestral  property  of  the  decedent.3 

§  190.  The  word  "heirs"  has  a  technical  signification,  and 
where  there  is  nothing  in  the  context  to  show  that  it  was 
used  in  any  other  sense,  it  will  be  presumed  that  in  the  certifi- 
cate the  term  "  legal  heirs,"  "  heirs  at  law,"  or  "  my  heirs," 
was  used  in  its  strict  and  primary  sense.  In  certain  contin- 
gencies, brothers,  sisters,  parents,  and  even  remote  kindred 
are  heirs  at  law,  but  it  would  be  absurd  in  the  extreme  to 
suppose  that  a  member  of  a  mutual  benefit  society,  who  has 
designated  his  "  legal  heirs  "  as  his  beneficiaries,  intended  that 
all  his  kindred  should  take.  The  legal  presumption  in  such  a 
case  would  clearly  be  that  he  intended  those  to  whom  the  law 
would  give  his  property  if  he  died  intestate;  and,  hence,  it  is 
the  actual  capacity  of  inheritance  at  the  time  of  the  death  of 
the  owner  of  the  property,  and  not  the  fact  that  a  particular 
person  might  have  inherited  from  him,  under  a  state  of  facts 
which  did  not  exist,  which  determines  who  is  an  heir  of  a  de- 
cedent.4 It  is  to  be  presumed  that  the  member  knows  who 
are  meant  by  the  words  "  heirs,"  "heirs  at  law,"  and  "legal 
heirs,"  and  when  he  accepts  a  contract  containing  any  of 
those  terms,  in  the  absence  of  anything  in  the  contract  mani- 
festing a  different  intention,  courts  will  presume  that  he 
adopted  the  legal  meaning  which  those  words  have  when  used 
in  statutes,  deeds  and  other  instruments  of  writing  by  persons 
skilled  in  the  use  of  legal  terms.     When  any  of  these  words 

1  Gosling,  Guardian,  v.  Caldwell,  69  3  Jamieson  v.  Association,  12  (.'in. 
TYnn.  (1  Lea)  454.  Law  Bull.  272. 

2  N.  W.  Masonic  v.  Jones,  154  Pa.  *  Phillips  v.  Carpenter,  79  Iowa 
St.  99;  26  Atl.  Rep.  253;  32  W.  N.  600;  Silvers  v.  Association.  94  Mich. 
Cases,  169.  39;  53  N.  W.  Rep  935;  Gauch  v.  St. 


368  CONSTRUCTION    OF   DESIGNATION   OF   BENEFICIARY. 

are  used  in  any  legal  instrument,  there  is  a  presumption, 
more  or  less  strong  according  to  the  circumstances,  that  they 
are  employed  in  a  technical  sense.  But  where  the  context 
determines  the  sense  in  which  they  are  used  in  a  contract, 
effect  must  accordingly  be  given  to  them.  When,  under  the 
law  of  a  state,  the  widow  is  an  heir  of  her  deceased  husband, 
and,  under  the  facts  of  a  case,  is  his  sole  heir  at  law,  it  is  im- 
material as  showing  the  intention  of  the  deceased  member 
that  he  made  his  certificate  payable  to  his  "  heirs,"  and  not 
to  his  "  heir  "  at  law.  By  the  use  of  the  word  "  heirs  "  the 
member  meant  what  he  said — that  whoever  might  prove  to 
be  his  heirs,  and  nemo  est  haeres  viventis,  should  have  the  ben- 
efit fund.  His  heirs  might  be  one  or  more  persons.  His 
widow  might,  and  might  not  be  one  of  them.1 

The  fact  that  she  is  the  beneficiary  directly  named  in  other 
policies  of  insurance  on  her  husband's  life  does  not  change  the 
rule  of  construction.2  A  provision  in  a  certificate  for  the  pay- 
ment of  the  fund  to  his  heirs  at  law  is  a  very  natural  one  for 
a  member  to  make.  If  he  have  a  wife,  but  no  child,  he  may 
well  intend  by  the  certificate  of  insurance,  and  by  the  use  of 
the  words  "  heirs  at  law,"  "  heirs  "  or  "  legal  heirs,"  to  pro- 
vide for  children  who  may  be  afterward  born  to  him,  or,  in 
the  event  that  no  living  child  or  descendant  of  a  child  shall  sur- 
vive him,  his  widow  shall  take  the  fund  as  sole  surviving  heir. 
A  divorced  wife  is  entitled  to  no  share  of  a  benefit  fund  pay- 
able to  the  member's  heirs.3  Where  the  certificate  was  pay- 
able to  "his  legal  heirs,"  and  the  member  left  a  wife  and 
child,  it  was  held  that  the  fund  went  to  the  child,  since  that  sec- 
tion of  the  law  of  descent  which  provided  that  "  if  the  intestate 
leave  no  issue,  the  one-half  of  his  estate  shall  go  to  his  parents, 
and  the  other  half  to  his  wife"  was  the  only  instance  where 
the  rights  given  to  the  widow  under  the  statutes  of  Iowa  par- 
took of  the  nature  of  heirship.  The  court  said :  "  No  one 
having  children  speaks  of  his  wife,  in  contemplation  of  her 
survivorship,  as  his  heir;  but  it  is  believed  it  is  universal  that 

Louis  Mutual  Life,  88111.  251;  Elseyv.  262;  Loos  v.  Ins.    Co.,   41    Mo.  538; 

Odd  Fellows  Ass  n,  142  Mass.  224;  7  Lawwill  v.  Lawwill,  29  111.  App.  643. 

N.  East.  Rep.  844;  2N.  Eng.  Rep.  667.  2  Alexander  v.  Association,  supra. 

1  Jameson  v.  Knight  Templar  As-  3  Schonfield  v.    Turner,    75  Texas 

sociation,   12  Cir .  Law    Bull.    272;  324;  12  S.  W.  Rep.  626;  Tyler  v.  As- 

Alexanderv.  Association,  supra;  see  sociation,  145  Mass.  134;  13  N.  East. 

Mace  v.   Cushman,  45  Me.  at  page  Rep.  360;  see  §  164. 


CONSTRUCTION   OF   DESIGNATION    OF   BENEFICIARY.  369 

she  is  referred  to  as  widow,  and  the  children  as  heirs.  While 
technically,  and  in  the  single  instance  stated,  a  widow  may 
become  a  legal  heir  of  her  deceased  husband,  our  conclusion 
is,  under  the  facts  of  the  case,  that  whether  used  in  their  tech- 
nical or  general  sense,  the  words  'legal  heirs'  were  not  in- 
tended, and  should  not  be  construed,  to  include  (the  widow)."  ' 
The  words  "my  legal  heirs,"  "my  heirs  at  law,"  "my  heirs," 
as  used  in  wills,  have  frequently  been  the  subject  of  judicial 
construction.  The  meaning  of  these  words  when  taken  alone 
is  usually  plain  enough,  but  the  contention  always  is  that, 
from  the  context,  it  is  evident  that  they  were  used  in  some 
other  than  the  ordinary  sense.  In  a  will,  the  testator  usually 
makes  provision  for  several  persons,  and,  in  several  clauses  of 
the  instrument,  gives  and  bequeaths  his  property.  In  such 
cases,  the  context  often  controls  the  meaning  of  words  used. 
But  in  mutual  benefit  insurance,  such  words  and  phrases  are 
used  only  in  answer  to  such  questions  as,  "  To  whom  shall  the 
benefit  fund  be  paid  ? "  "  Whom  do  you  designate  as  your 
beneficiaries  ?  "  etc.  The  answer  is  usually  short,  and  to  the 
point;  "  my  heirs,"  "  my  legal  heirs,"  etc.  The  other  provis- 
ions of  the  contract  relate  to  matters  entirely  apart  from  the 
disposition  of  the  fund.  When  we  come,  therefore,  to  place  a 
construction  upon  this  designation  of  the  beneficiary,  we  are 
seldom  met  with  other  provisions  of  the  certificate  upon  the 
same  subject,  from  which  the  theory  may  be  drawn  that  the 
member  intended  to  use  the  words  in  a  different  sense  than 
the  ordinary  one.  Generally  there  is  no  ambiguity  in  the  con- 
tract, and  recourse  must  be  had  to  the  statutes  alone  to  find 
out  who  are  the  legal  heirs  of  the  intestate.  The  interpreta- 
tion £iven  by  the  courts  to  such  terms  and  words,  when  used 
in  wills  and  controlled  by  other  words,  will,  now  and  then,  be 
of  the  first  importance  in  determining  the  proper  construction 
to  be  given  to  the  designation  of  beneficiaries  made  by  a  mem- 
ber of  a  mutual  benefit  society.  But  so  many  of  these  decis- 
ions have  direct  application  to  the  statutes  of  the  states  in 
which  they  are  rendered,  that  no  attempt  will  be  made  to 
review  them  here.  It  is  evident  that  the  laws  of  the  different 
states  must  determine  the  question  as  to  who  are  the  heirs  of  an 

1  Phillips  v.   Carpenter,  79  Iowa  600;  44  N.  W.  Rep.  898;  see  Gauch  v. 
Ins.  Co.,  88*111.  251. 
24 


370  CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY. 

intestate,  and  that  the  persons  who  will  take  the  fund  under 
a  designation  of  "  my  heirs,"  in  one  state  may  have  no  interest 
in  the  fund  under  the  laws  of  some  other  state.  Thus,  in  Indi- 
ana a  certificate  payable  to  the  u  legal  heirs"  of  a  member, 
when  he  leaves  a  widow  and  children  at  his  death,  is  payable  to 
all  of  them.  His  widow,  in  such  case,  is  included  in  the  word 
"  heirs."  '  In  Illinois,  in  such  case,  she  is  not  included  among 
the  beneficiaries.2 

§  191.  The  designation  of  the  beneficiary  as  set  forth  in 
the  certificate  must  be  construed  with  reference  to  the  law 
under  which  the  society  is  organized,  the  charter,  the  con- 
stitution and  the  by-laws.  The  provisions  of  these  form  the 
context  which  may  control  the  meaning  of  the  designation. 
From  this  fact,  it  is  evident  that  it  is  often  necessary  to  do 
more  than  to  resort  to  the  statutes  of  the  state  to  determine 
who,  under  their  provisions,  are  the  legal  heirs.  It  is  not 
always  by  any  means  a  plain  question  of  statutory  provision, 
but,  on  the  contrary,  it  is  often  a  matter  involving  a  nicety  of 
distinction  and  a  careful  consideration  of  the  whole  contract 
of  insurance,  in  connection  with  the  statutes  to  declare  who 
are  the  beneficiaries  of  the  contract  under  the  designation  of 
"  my  heirs."  By  the  charter  of  a  mutual  benefit  society,  the 
persons  whom  the  insured  could  designate  as  beneficiaries  were 
limited  to  his  widow,  his  orphan  children  and  other  persons 
dependent  upon  him,  and  the  by-laws  of  the  society  provided 
that  if  the  assured  made  no  designation  the  amount  should  be 

'Wilburn  v.  Wilburn,  83  Ind.  55;  ion  would  be,  in  case  of  the  prior 
Johnson  v.  Alexander,  125  Ind.  575;  death  of  any  one  of  the  class  desig- 
25  N.  East.  Rep.  706;  see  Young  nated  to  take  the  benefit,  the  heirs 
Men's  Association  v.  Pollard,  3  Oh.  of  the  holder  would  take  the  share 
Cir.  Ct.  Repts.  577;  Kaiser  v.  Kaiser,  of  the  deceased  party.  Here  the 
13  Daly  522;  Day  v.  Case,  43  Hun  plaintiffs  (the  widow  and  four  chil- 
I79_  dren)  were  the  heirs  of  the  holder, 

2Gauch  v.  Ins.  Co.,  88  111.  251;  and  they  took  the  whole  benefit,  and 
but  in  The  Covenant  Mutual  Benefit  the  judgment  in  their  favor  was 
Association  v.  Hoffman  et  al.,  110  111.  regular,  and  authorized  by  law." 
603,  it  was  provided  by  the  certifi-  See  note  to  §  204;  Phillips  v.  Car- 
cate  that,  in  the  event  of  the  prior  penter,  79  Iowa  600;  Johnson  v. 
death  of  the  beneficiaries  named,  Knights,  53  Ark.  255;  Walsh  v. 
the  benefit  should  be  paid  to  the  Walsh,  20  N.  Y.  Supp.  933;  Bishop  v. 
legal  heirs  or  devisees  of  the  holder  Grand  Lodge,  112  N.  Y.  627;  20  N. 
of  the  certificate.  The  court  said:  East.  Rep.  562. 
"A  correct  reading  of  this  provis- 


CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY.  371 

paid  to  his  widow,  or,  if  he  left  no  widow,  to  the  guardian  or 
trustee  of  his  minor  children.  The  insured  at  the  time  of 
making  his  designation  had  a  wife  and  two  daughters,  and  in 
his  application  for  membership  in  answer  to  the  question  "  To 
whom  will  you  have  your  death  loss  paid  ? "  answered,  "  To 
my  heirs,"  and,  in  reply  to  a  request  to  state  the  relationship 
of  any  of  the  persons  to  whom  payable,  answered,  "Wife  or 
daughters."  The  wife  survived  the  insured.  Upon  these  facts 
the  supreme  court  of  Massachusetts  held  that  "  the  meaning  is 
sufficiently  plain  that  he  intended  that  the  payment  should  be 
to  his  widow,  or,  if  he  left  no  widow,  to  his  surviving  daugh- 
ters. *  *  The  intention  that  the  mone}^  should  be  divided 
between  the  widow  and  surviving  children  is  not  in  accord- 
ance with  the  purpose  of  the  association.  *  *  If  there  was 
any  designation,  it  was  to  the  widow,  or,  if  there  should  be  no 
widow,  to  the  surviving  daughters.  If  there  was  no  valid 
designation,  the  widow  is  entitled  to  the  money.  It  is,  there- 
fore, unnecessary  to  consider  the  several  objections  presented 
to  the  sufficiency  or  validity  of  the  designation.  In  any 
aspect  of  the  case,  the  money  is  to  be  paid  to  the  widow."  ' 
In  Kentucky  Masonic  v.  Miller's  Administrator,2  the  charter 
of  the  society  provided  that  the  benefit  fund  should  be 
paid  to  the  widow  and  children  of  the  deceased  member, 
according  as  the  will  of  said  deceased  member  should 
direct,  or,  if  he  should  leave  no  widow  or  child,  then 
to  be  appropriated  according  to  his  will.  A.  member  took 
out  a  certificate  payable  to  his  "heirs,  or  as  lie  may  direct  in 
his  will."  He  died  intestate  leaving  a  widow  and  no  children, 
and  his  widow  and  not  his  administrator  was  held  to  be  enti- 
tled to  the  funds.  The  court  said:  "  The  charter  prescribes 
who  may  become  members  of  the  company,  and  their  obliga- 
tions,  and  who  shall  be  beneficiaries  of  the  membership  after 
the  death  of  the  member,  and  it  is  not  in  the  power  of  the 
company,  or  of  the  member,  or  of  both,  to  alter  the  rights  of 
those  who,  by  the  charter,  are  declared  to  be  beneficiaries,  ex- 
cept in  the  mode  and  to  the  extent  therein  indicated." 

1  Addison  v.    New  England  Com-       8 13  Bush  (Ky.)  489. 
mercial  Traveler's   Ass'n.  144  Mass. 
591;  12  N.  E.  East.  Rep.  407. 


372  CONSTRUCTION   OF   DESIGNATION   OF   BENEFICIARY. 

§  192.  The  words  "  heirs  "  and  "  next  of  kin  "  may  be  so  used, 
in  association  with  other  language,  and  under  such  circum- 
stances, as  to  show  an  intention  to  include  others  than  blood 
relations.  A  member  of  a  mutual  benefit  society  had  no  near 
relative  by  blood  except  a  brother,  of  whom  his  wife  knew 
nothing,  and  who  was  living  in  Europe.  The  member  was  on 
the  most  cordial  terms  with  his  wife,  whom  he  had  married  more 
than  twelve  years  before,  and  by  whom  he  had  one  child  and  af- 
terward had  another.  He  was  a  foreigner,  and  presumably  not 
well  acquainted  with  the  English  language.  He  was  illiter- 
ate, for  in  his  application  for  insurance  he  designated  as  his 
beneficiaries  "my  leagal  heiros."  He  afterward  made  a  will, 
giving  all  his  personal  estate  to  his  "  beloved  wife,"  but  left 
little  provision  for  her  when  he  died,  except  such  as  the  certifi- 
cate might  afford  her.  He  left  no  children,  father,  mother, 
brother  or  sister  surviving  him,  except  the  brother  who 
claimed  the  fund  under  the  term  "  my  leagal  heiros."  The 
court  said  :  "  All  this  is  entirely  inconsistent  with  the  theory 
that  he  used  the  phrase  "  legal  heirs  "  in  its  ordinary  accepta- 
tion; but  he  intended  thereby  to  designate  his  wife  and  chil- 
dren, if  he  should  leave  any;  and  this  is  the  meaning  often 
attached  to  the  phrase  by  the  unlearned,  especially  when  only 
personal  property  is  concerned.1 

§193.  Orphan,  orphans. — The  word  "orphan"  is  fre- 
quently used  in  the  laws  providing  for  the  organization  of 
mutual  benefit  societies,  and  in  the  contracts  of  insurance 
issued  by  them.  It  is  not  so  used  in  a  technical  sense,  as 
meaning  a  minor  or  an  infant  who  has  lost  both  of  his  parents. 
It  may  be  stated  that  from  the  various  provisions  of  the  char- 
ter, by-laws  and  certificates,  it  will  appear  that  the  word  "  or- 
phans," as  used  by  societies  means  children  of  a  deceased  mem- 
ber, whether  their  mother  is  living  or  not,  and  whether  they 
are  over  or  under  the  age  of  majority.  The  charter  of  a  so- 
ciety declares  one  of  its  objects  to  be  to  assist  "  the  widows  and 
orphans  of  deceased  members,"  and  to  establish  a  "  widows'  and 
orphans'  benefit  fund."  The  constitution  provides  that  from 
this  fund  a  sum  of  money  shall  be  paid  to  a  member's  family, 
or  to  those  dependent  on  him,  as  he  may  direct.     A  certificate 

1  Kaiser  v.  Kaiser,  24  N.  Y.  Weekly  Dig.  410;  13  Daly  522. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  6  id 

was  issued  to  a  member,  payable  to  his  wife  "  for  the  benefit  of 
herself  and  the  children  of  said  member."  It  was  held  that 
under  these  provisions  the  benefit  fund  was  payable  equally  to 
his  widow,  his  child  by  her,  and  his  two  children  by  a  pre- 
vious wife,  one  of  whom  was  twenty-three  years  of  age — all 
the  children  being  orphans  within  the  meaning  of  the  charter.1 
But,  of  course,  the  word  may  be  so  used  as  to  exclude  the 
idea  that  an  adult  child  is  intended  to-  be  embraced  within 
its  meaning.  Thus,  in  Ilammerstein  v.  Parsons,2  the  by- 
laws of  the  society  provided  for  the  payment  of  the  benefit 
fund  to  the  widow  of  a  deceased  member;  "  should  there  be  no 
widow,  then  the  said  amount  shall  be  paid  to  the  lodge  of 
which  the  deceased  was  a  member  for  the  use  or  benefit  of  his 
orphan  child  or  children  in  equal  shares.  In  case  there  should 
be  no  widow,  child  or  children,  or  designated  person  or  object, 
the  amount  shall  be  paid  to  his  executor  or  administrator." 
The  deceased  member  left  no  widow,  and  the  fund  was  claimed 
by  his  children  who  were  all  adults  at  the  time  of  his 
death.  .The  court  said  :  "  We  are  clear  that  the  plaintiffs  are 
not  orphan  children  within  the  meaning  of  that  section.  The 
entire  context  of  the  section  shows  that  the  words, '  orphan 
children,'  relate  to  a  class  of  persons  who  are  not  sui  juris, 
otherwise  the  interposition  of  the  lodge  as  a  trustee,  in  case 
the  beneficiaries  are  orphans,  would  be  wholly  meaningless. 
*  *  The  rules  expressly  provide  that  in  a  certain  contin- 
gency the  benefit  shall  be  paid  to  the  executor  or  adminis- 
trator of  the  deceased.  This  is  the  contract  between  the 
parties,  and  the  question  for  the  determination  of  the  court  is, 
not  whether  a  payment  to  the  adult  children  of  the  deceased  is 
more  in  harmony  with  the  object  of  the  association,  but 
whether  the  contingency  upon  which  the  fund  thus  became 
payable  exists.  If  it  does  exist,  then  the  personal  representa- 
tive named,  and  not  the  adult  children,  is  the  proper  party 
plaintiff.  *  *  The  words,  'child  or  children,' necessarily 
relate  to  the  child  or  children  mentioned  in  the  preceding 
clause,  namely,  'orphan  child  or  children.'  The  section  will 
admit  of  no  other  intelligent  construction.  The  last  clause 
does  not  purport  to  create  any  right  in  any  class  of  children, 

1  Jaekman    v.   Nelson,    147    Mass.        *  29  Mo.  App.  509. 
300;   17  N.  East.  Rep.  529. 


374  CONSTRUCTION    OF    DESIGNATION   OF    BENEFICIARY. 

but  merely  undertakes  to  prevent  a  lapse  of  forfeiture  in  cer- 
tain cases,  and  it  is  evident  that  it  was  not  designed  that  the 
fund  should  lapse  if  the  deceased  left  adult  children,  and  yet 
vest  in  the  personal  representative  if  he  left  no  children  at  all." 
§  194.  Family. — The  laws  of  Michigan  provide  for  the  or- 
ganization of  mutual  benefit  societies  to  secure  to  "  the  family 
or  heirs  of  any  member,  upon  his  death,"  a  certain  sum  of 
money.  An  old  man  became  a  member  of  a  society  organized 
under  this  act,  and  designated  as  his  beneficiary  a  young 
woman  who  was  not  related  to  him,  but  who  had  lived  with 
him  for  many  years  in  the  same  household,  and  had  been 
treated  by  him  as  if  she  were  his  daughter.  In  deciding  that 
such  a  designation  was  within  the  terms  of  the  above  law,  the 
supreme  court  of  Michigan  said  :  "  Now  this  word  '  family ' 
contained  in  the  statute,  is  an  expression  of  great  flexibility. 
It  is  applied  in  many  ways.  It  may  mean  the  husband  and 
wife  having  no  children  and  living  alone  together,  or  it  may 
mean  children,  or  wife  and  children,  or  blood  relations,  or  any 
group  constituting  a  distinct  domestic  or  social  body.  It  is 
often  used  to  denote  a  small  select  corps  attached  to  an  army 
chief,  and  has  even  been  extended  to  whole  sects,  as  in  the  case 
of  the  Shakers.  We  discover  nothing  in  the  statute  implying 
a  narrow  sense,  and  we  should  not  be  inclined  to  attribute  one 
where  the  result  would  cause  injustice.  It  seems  to  us  that 
the  circumstances  constitute  a  case  within  the  meaning  of  the 
legislature."  '  In  Supreme  Lodge  v.  Nairn,2  it  was  held  that 
an  army  comrade  and  intimate  friend  of  a  member  of  a  so- 
ciety, who  had  lived  at  his  house  for  several  years,  and  had 
become  physically  disabled  and  dependent  on  others  for  sup- 
port, did  not  fall  fairly  within  the  designation  of  the  word 
"  family  "  as  used  in  the  statute.3 

1  Carmichael  v.  The  N.  W.  Mut.  him  and  supported  by  him,  consti- 
Ben.  Ass'n,  51  Mich.  494;  see  Fol-  tute  a  family.  Marsh  v.  Lazenby, 
mer's  Appeal,  87  Pa.  St.  133.  41    Ga.    153.      A    widowed  daugh- 

2  60  Mich.  44.  ter  and  her  minor    children,  being 

3  See  Thompson  on  Homesteads  incapable  of  supporting  themselves 
and  Exemptions,  §§  48,  68,  where  the  and  living  together  with  her  father, 
following  and  many  other  cases  are  constitute  a  family.  Blackwell  v. 
cited,  which  bear  more  or  less  upon  Broughton,  56  Ga.  390.  And  so, 
the  question  under  consideration,  in  New  York,  do  a  widower  and 
An  unmarried  man,  and  his  indi-  a  grown-up  daughter,  living  together, 
gent  mother  and  sisters  living  with  Cox  v.  Stafford,  14  How.  Pr.  519,  and, 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  375 

A  society  was  organized  to  assist  "  the  widows,  orphans,  or 
other  dependents  of  deceased  members,"  and  a  by-law  pro- 
vided for  the  payment  of  the  fund,  in  certain  events,  to  the 
family  of  a  deceased  member.  A  member  made  his  mother 
his  beneficiary.  She  was  not  living  with  him,  but  was  living 
with  her  husband  in  another  town  and  county.  It  was  held 
that  she  was  not  one  of  the  members  of  his  family,  within  the 
meaning  of  the  by-law,  for  so  broad  a  construction  would 
make  the  by-law  overreach  the  scope  of  purposes  of  the 
organization.1  The  constitution  of  a  society  provided  that 
"  this  association  shall  have  for  its  object  the  payment  to  the 
family  of  the  deceased  member  "  of  a  certain  sum  of  money, 
and  that  said  sum  "  shall  be  paid  to  his  legal  representatives, 
or  to  such  person  or  persons  as  he  may  have  designated  or 
appointed  in  writing.  *  *  Provided,  alvxiys,  that  when 
such  member  shall  leave  a  widow  or  children,  he  shall  have 
no  power  to  deprive  her  or  them  of  the  benefits  specified  in 
this  article,  by  will  or  otherwise,  but  the  same  shall  be  paid 
to  her  or  them  absolutely."  A  member  procured  an  insurance 
in  favor  of  his  niece  with  whose  family  he  was  living,  but  at 
the  time  of  his  death  he  had  a  married  daughter  living  apart 
and  independent  of  him.  In  deciding  that  the  niece,  and  not 
the  daughter,  was  entitled  to  the  fund,  the  court  said  :  "  The 
whole  instrument  is  to  have  such  fair  and  rational  construction 
as  to  make  all  its  provisions  operative  and  efficient.  As  was 
said  in  1  Kent's  Commentaries,  463,  '  the  principle  undoubtedly 
is,  that  the  sound  interpretation  and  meaning  of  a  statute,  on 
a  view  of  the  enacting  clause  and  proviso  taken  and  construed 
together,  is  to  prevail.  If  the  principal  object  of  the  act  can 
be. accomplished,  and  stand  under  the  restriction  of  the  pro- 
viso, 1  lie  same  is  not  to  be  held  void  for  repugnancy.'     *     * 

in  Wisconsin,  do   an   unmarried  son  Bailey  v.  Cummings,  U.  S.  Cir.  Ct. 

wlio  supports  his  dependent  mother,  East.  Dist.   Mo. ;  see  Bouvier's   Law 

and  minor   and  dependent    brothers  Dictionary,  title,  "Family;"  Strawn 

and  sisters,  all  living  together.    Con-  v.  Strawn,  53  111.  263. 

naughton  v.  Sands,  B2  Wis.   387;  see  'Elsey  v.  Odd  Fellows  Mutual.  1  19 

alsoGreenw Iv.Maddox,  27  Ark.  Mass.  024:  7  N.  East.    Rep.   su;  see 

fi.'is.    An  unmarried  man  supporting  Marsh  v.  Supreme  Council,  149  Mass. 

a  widowed  sister,   with  or  without  512;  31  N.  East.  Rep.  1070;  Brooklyn 

dependent  children,  is  the  head  of  a  Ass-n  v.  Hanson,  6  N.  Y.  Supp.  161; 

family.    Wade   v.    Jones,  20  Mo.  75;  see  §  231. 


376  CONSTRUCTION    OF   DESIGNATION    OF  BENEFICIAKY. 

Undoubtedly  it  has  been  the  controlling  idea  of  this  association 
from  the  outset  to  provide  for  the  families  of  members.  This 
is  manifest  from  the  declaration  of  the  object  of  the  organi- 
zation in  (certain  articles  of  the  constitution).  Benefits  were 
to  be  paid  '  to  the  family '  in  the  first  instance,  and  '  to  the 
widow,  orphans  or  family  '  in  the  second.  *  *  (The  niece) 
was  within  the  circle  of  the  family  of  (the  member),  and  under 
his  contract  with  the  association  and  a  rational  interpretation 
of  the  charter,  she  has  a  right  to  the  fund  in  controversy." l 
Two  brothers,  married  and  living  with  their  wives  and  chil- 
dren, are  children  of  the  same  parents,  but  not  members  of 
the  same  family  in  the  sense  in  which  the  word  "  family  "  is 
used  in  the  charter  of  a  mutual  benefit  society.2  The  words 
"  family  "  or  "  other  dependents  "  of  a  deceased  member,  as  used 
in  a  law  setting  forth  the  classes  of  persons  to  whom  a  fund 
shall  be  paid,  do  not  include  one  knowingly  occupying  the 
relation  of  mistress  or  concubine,  though  named  in  the  cer- 
tificate as  bearing  the  relation  of  wife,  and  being  dependent 
on  the  member  for  support.3  A  divorced  wife  is  not  a  part  of 
the  family  of  a  member.4 

Where  a  member  of  a  society  designates  his  "family"  as 
his  beneficiary,  and  his  family  at  the  time  consists  of  himself 
and  his  wife  and  daughter,  the  wife  and  daughter'  are  the 
beneficiaries;  but  where  the  daughter  dies  before  her  father, 
and  the  wife  is  the  only  member  of  his  family  who  survives 
him,  she  takes  the  whole  fund,  and  the  daughter's  children 
take  nothing.5 

§  195.  Dependents. — The  statutes  of  many  states  and  the 
charters  and  by-laws  of  many  societies  provide  for  the  pay- 
ment of  benefits  to  those  dependent  upon  the  member.  The 
courts  have  not  as  yet  been  called  on  in  many  cases  to  con- 
strue the  meaning  of  the  term  "  dependents,"  as  designating  a 
class  of  beneficiaries.  It  was  said  arguendo  in  Ballou  v.  Gile,6 
"  We  think  the  true  meaning  of  the  word  '  dependent,'  in  this 

'  Folmer's  Appeal,  87  Pa.  St.  133;  3  Keener  v.  Grand  Lodge,  38  Mo. 

see  Supreme  Council  v.   Green,   71  App.  543. 

Md.  263;  17  Atl.  Rep.  1048.  4  Schonfield  v.  Turner,    75    Texas 

2  Supreme  Council  v.  Smith,  45  N.  324;  12  S.  W.  Rep.  626. 

J.    Eq.    466;    17    Atl.  Rep.  770;   see  5  Brooklyn  Masonic  Relief  Ass'n  v. 

Britton  v.  Supreme  Council,  46  N.  J.  Hanson,  6  N.  Y.  Supp.  161; 

Eq.  102;  18  Atl.  Rep.  675.  650  Wis.  014. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  Oil 

connection,  means  some  person  or  persons  dependent  for  sup- 
port in  some  way  upon  the  deceased."  It  is  evident  that  the 
facts  in  each  individual  case  can  alone  determine  whether  or 
not  the  beneficiary  is  such  a  dependent  as  is  meant  by  the 
terms  of  the  contract  of  insurance.  Of  course,  a  liberal  con- 
struction should  be  given  to  the  terms  of  this  contract,  and  a 
dependence  founded  upon  a  moral  duty  of  one  to  provide  for 
another  should  be  as  clearly  recognized  as  that  which  arises 
from  a  legal  duty.1  But  whether  a  person  may  appoint  as  the 
beneficiary  of  such  a  contract  of  insurance  a  person  not 
related  to  him  in  any  manner,  but  one  whom  he  is  supporting 
merely  through  the  promptings  of  affection  and  charity,  has 
never  been  decided.  A  sister  can  not,  as  a  matter  of  law,  be 
said  to  be  dependent  upon  her  brother,  nor  can  a  mother  be 
said  to  be  dependent  upon  her  child,  and  one  may  or  may 
not  be  dependent  on  his  brother.2 

A  woman  to  whom  a  member  of  a  mutual  benefit  society  is 
eno,as,ed  to  be  married  can  not  be  said,  as  a  matter  of  law,  to 
be  dependent  upon  such  member.  She  does  not  come  within 
the  class  of  persons  whom,  if  able,  he  is  bound  by  law  to 
support.  The  mere  engagement  to  marry  imposes  no  obliga- 
tion upon  him,  except  to  carry  out  his  contract  with  her.8 
Where  the  betrothed  was,  during  the  entire  period  of  her  en- 
gagement, working  for  her  own  living,  earning  during  part  of 
that  time  more  than  her  intended  husband,  and  receiving  noth- 

'Carmichael  v.   N.  W.  Mut.  Ben.  83  N.  East.  Rep.  183;  reversing  42  III 

Ass'ii.  51  Mich.  494.  App.  455:  Supreme  Council  v.  Perry, 

^Supreme    Council  v.    Perry,   140  140  Mass.    580;  5  N.    E.    Rep.    034; 

Mass.  580;  5  X.   East.  Rep.   634;  El-  Palmer  v.  Welsh,  132  III.  Ml:  28  X. 

■n  v.  Odd  Fellows'  .Mutual,  142  East.  Rep.  412;  88  111.  App.  188.  In 
Mass.  224;  T  X.  East.  Rep.  844;  Su-  Chrisholm  v.  National  Ins.  Co.,  52 
preme  Council  v.  Smith,  45  N.  J.  Mo.  213,  S.  C,  14  Am.  Rep.  414,  a 
Eq.  166.  A  single  woman,  depend"  contract  of  marriage  existed  between 
ent  on  her  brother  for  her  support  plaintiff  and  one  Clark,  and  the 
and  education,  has  a  sufficient  inter-  company  made  and  delivered  to 
est  in  bis  life  to  entitle  her. to  insure  plaintiff  its  policy  of  insurance 
it.  Lord  v.  Dall,  12  Mass.  115.  The  whereby  it  insured  the  life  of  (lark 
mere  relationship  of  brother  is  not  for  five  thousand  dollars.  The  pol- 
Buch  as  will  support  a  policy  of  life  icy  was  issued  and  delivered  to  plaint- 
insurance.  Lewis  v.  Ins.  Co.,  39  iff  and  made  payable  to  her  as  the 
Conn.  104;  Bevin  v.  Ins.  Co..  28  intended  wife  of  Clark,  and  she  paid 
Conn.  844.  the  annual  premium.     After  she  had 

3  Alexander  v.  Parker,  144  111.355;  paid   another  premium,   but    before 


378  CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY. 

ing  from  him  except  occasional  presents  of  clothing  and  money, 
she  is  not  dependent  on  him.' 

But  if  as  a  matter  of  fact,  the  fiancee  of  a  member  is  sup- 
ported partly  by  her  own  labor  and  partly  by  money  given 
to  her  by  him,  she  is  such  a  dependent  as  will  entitle  her  to 
the  fund.2 

The  law  of  Missouri  provides  for  societies  for  the  relief  and 
aid  of  the  families,  widows,  orphans,  or  other  dependents  of 
the  deceased  members.  The  words  "  other  dependents  "  are 
inserted  to  include  persons  who,  not  being  either  members  of 
the  family  of  the  deceased,  nor  his  widow  or  orphans,  are  yet 
dependent  upon  him  in  some  manner.  Any  other  construction 
would  require  the  court  in  each  case  to  enter  into  an  investi- 
gation of  the  fact  how  far  the  widow  or  orphans,  or  any  other 
member  of  the  family,  was  self-supporting;  which,  in  itself, 
instead  of  furthering  the  objects  of  these  associations,  would 
soon  encompass  their  complete  destruction.3  This  is  in  accord 
with  the  construction  placed  upon  the  statute  by  the  supreme 
court  of  Michigan,  in  Supreme  Lodge  v.  Nairn,4  where  it  is 
said :  "  The  laws  of  that  state  (Missouri)  expressly  forbid  cor- 
porations of  this  sort  from  paying  benefits  to  any  but  the 
member's  family  or  dependents.  *  *  The  intent  of  the 
prohibition  is  clearly  to  shut  out  all  persons  who  are  not  actual 
relatives,  or  standing  in  place  of  relatives  in  some  permanent 

the  contemplated    marriage,    Clark  ant  making  it.     There  is  no  pretense 
died.     The  court,  upon  these  facts,  that  there  was  any  concealment    of 
said  :     "  The    insurance    was  not  a  facts  at  the  time  of  making  the  con- 
mere  wagering  contract  and,  there-  tract.     Upon  the  facts  there  was  no 
fore,  can  not  be  said  to  contravene  hesitation  in  entering  into  the  agree- 
any  principle  of  public  policy.     The  ment  and   obtaining    the  premium 
plaintiff  had  an  interest  in  the  life  and  issuing  the  policy.     Had  the  de- 
of  Clark;  a  valid    contract    of  mar-  fendant  been  as  wilting*  to  observe 
riage  was  subsisting  between   them,  and  fulfill  its  obligations  as  it  was  to 
Had  he  lived  and  violated  the  con-  receive    premiums,    then    this   case 
tract  she  would  have  had  her  action  would  have  never  occupied  the  time 
for  damages.     Had  he  observed  and  of    the  courts.     Trenton  Mutual    v. 
kept  the  same,  then  as  his  wife  she  Johnson,  "4  Zab.  576. 
would  have  been  entitled  to  support.  '  Alexander  v.  Parker,  supra. 
In  my  opinion  she  had  such  an  in-  2  McCarthy  v.  Order  of  Protection, 
terest   as  was    entirely  sufficient  to  153  Mass.  314;  26  N.  East.  Rep.  866. 
render  the  contract  valid.     The  de-  3  Grand  Lodge  v.  Eisner,  26  Mo. 
fense  in  this  case  is  devoid  of  merit,  App.  108. 
and  is  not  creditable  to  the  defend-  4  60  Mich.  44. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  379 

way,  or  in  some  actual  dependence  on  the  member."  A  per- 
son whose  only  relation  to  the  deceased  member  was  that  of 
a  creditor,  is  not  a  person  dependent  upon  him,  within  the 
meaning  of  a  statute  providing  for  the  organization  of  societies 
"  for  the  purpose  of  assisting  the  widow,  orphans,  or  other  de- 
pendents of  deceased  members." ' 

A  law  of  the  corporation  required  applicants  to  enter  upon 
their  applications  "  the  name  or  names  of  the  members  of  their 
family,  or  those  dependent  upon  them,"  to  whom  they  desired 
the  benefit  paid.  It  also  provided  that  members  in  good 
standing  might  surrender  their  certificates,  and  have  new 
ones  issued,  payable  "  to  such  beneficiary  or  beneficiaries,  de- 
pendent upon  them,  as  they  may  direct."  It  was  held  that 
the  right  of  substitution  of  beneficiary  is  not  restricted  by 
the  latter  clause  to  persons  actually  dependent  upon  the 
member  for  support,  but  that  any  member  of  the  family  may 
be  substituted.2  A  woman  knowingly  occupying  the  rela- 
tion of  mistress  or  concubine,  and  being  dependent  on  the 
member  for  support  is  not  a  "  dependent "  contemplated  by  a 
law  setting  forth  the  classes  of  persons  to  whom  the  benefit 
fund  of  the  society  may  be  paid.3  But  where  the  constitution 
and  by-laws  of  a  society  establish  three  classes  of  beneficiaries, 
— the  family  of  the  member,  relations  by  blood,  and  those  de- 
pendent on  him  for  support — a  named  beneficiary,  designated 
as  the  member's  wife,  who  is  dependent  on  him  for  support, 
and  who  is  innocent  of  any  wrong,  is  entitled  to  payment  on 
the  member's  death,  though  she  was  not  in  fact  his  lawful 
wife,  because  he  had  been  guilty  of  bigamy  in  marrying  her.4 

§  196.  Relations,  relatives. — The  words  "relation"  and 
"  relative"  are  very  broad  and  comprehensive  terms,  and  may 
include  any  and  every  relation  which  arises  in  social  life.  Lit- 
erally, it  takes  in  every  kind  of  connection,  and  would  have  so 
wide  a  range  as  to  be  open  to  objection  as  indefinite  and 
vague.  To  avoid  this  consequence,  recourse  is  had  to  the  stat- 
utes of  distribution^  and  it  has  been  long  settled  that  a  bequest 

1  Skillings  v.  Mass.  Bon.  Ass'n,  146  3  Keener  v.  Grand  Lodge,  88  Mo. 

Mass.  217;  5  N.  Eng.  Rep.  718;  15  N.  App.  543. 

East.  Rep.  566.  '  Supreme  Lodge  v.  Hutchinson.  G 

-  Marsh  v.  Supreme  Council,  149  Ind.  App.  3'J'J;  33  N.  East.  Rep.  816. 
Mass.  512;  21  N.  East.  Rep.  1U7U. 


380  CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY. 

to  relations  applies  to  the  person  or  persons  who  would,  by 
virtue  of  those  statutes,  take  the  personal  estate  under  an  in- 
testacy, either  by  next  of  kin  or  by  representation  of  next  of 
kin.1  The  terms  are  defined  by  lexicographers  as  signifying 
"  persons  connected  by  consanguinity  or  affinity,"  and  rela- 
tionship is  described  as  "kindred,  affinity  or  other  alliance." 
The  most  common  use  of  the  terms  is  to  express  some  kind  of 
kindred  either  of  blood  or  affinity,  though  properly  by  blood.2 
The  supreme  court  of  Pennsylvania  has  decided  that,  in  a  will, 
the  terms  "  my  nearest  relations  or  connections "  do  not  in- 
clude the  testator's  wife.3  Where  only  persons  related  to  or 
dependent  on  the  member  could  take  the  fund  under  the  con- 
tract, and  he  designated  by  name  as  his  beneficiary  the  wife 
of  his  grand-nephew,  who  was  not  dependent  on  him,  it  was 
held  that  she  was  properly  included  in  the  phrase  "  related 
to  the  member,"  though  she  was  not  related  to  him  by  blood.4 
A  son  is  a  relative  by  affinity  of  his  step-father,  after  his  own 
mother's  death,  within  the  meaning  of  the  charter  of  a  society 
providing  for  the  payment  of  benefits  to  relatives  of  the  mem- 
bers.5   A  sister  is  a  "relative"  who  may  be  a  beneficiary.6 

§  197.  Legal  representatives. — The  strict  and  technical 
meaning  of  the  words  "  legal  representatives  "  and  "  personal 
representatives  "  is  executors  or  administrators,  and,  in  a  con- 
tract of  insurance,  where  these  words  are  used  to  designate  its 
beneficiaries,  they  must  be  given  that  meaning,  unless  there  is 
something  in  the  context  or  surrounding  circumstances  to  in- 

1  Smith  v.  Campbell,  19  Ves.  400;  this  association  will  be  best  attained 
2  Jarman  on  Wills,  4th  Am.  Ed.  45.  by  the  adoption  of  a  common,  though 

2  Davies  v.  Baily,  1  Ves.  Sr.  84;  it  may  be  an  inexact  interpretation 
Garrick  v.  Lord  Camden,  14  Ves.  of  the  words  "  related  to "  as  used  in 
372;  Paine  v.  Prentiss,  5  Met.  396;  the  article  above  referred  to,  rather 
Dickinson  v.  Purvis,  8  S.  &  R.  71;  than  by  a  restricted  meaning  that 
Kimball  v.  Story,  108  Mass.  382;  Drew  may  not  have  been  known,  and  is 
v.  "Wakefield,  54  Me.  291;  Supreme  certain  to  defeat  the  purpose  of  this 
Council  v.  Bennett,  47  N.  J.  Eq.  39;  deceased  member;  and  that  no  rule 
19  Atl.  Rep.  785.  of  legal  construction  will  be  violated 

3Storer  v.  Wheatley,  1  Pa.  St.  506;  by  giving  it  such  meaning." 

see  Esty  v.  Clark,   101  Mass.  36;   2  6  Simcoke  v.  Grand  Lodge,  84  Iowa 

Williams  on  Executors,  1004;  2  Jar-  383;  51  N.  W.  Rep.  8;   see  Spear  v. 

man  on  Wills,  49.  Robinson,  29  Me.  531. 

4  Bennett  v.   Van  Riper,  47  N.J.  6  Anthony  v.  Association,  158  Mass. 

Eq.  563;  22  Atl.  Rep.  1055.     The  court  322;  33  N.  East.  Rep.  577. 
said  :    "It seems  that  the  objects  of 


CONSTRUCTION    OF   DESIGNATION   OF   BENEFICIARY.  381 

dicate  that  they  were  used  in  a  different  sense.1  A  certificate 
of  membership  payable  to  the  legal  representatives  of  the 
insured  member,  is  prima  facie  the  same  as  if  made  payable 
to  himself.  But  where  the  charter  of  a  society  provides  that 
certain  persons  only  may  be  beneficiaries,  as  for  instance,  the 
widows,  orphans  and  heirs  of  deceased  members,  the  term 
"  legal  representatives "  as  designating  beneficiaries  will  be 
construed  with  reference  to  the  charter,  as  meaning  those  who 
are  the  legal  representatives  of  the  member  in  contemplation 
of  the  charter.2 

A  certificate  made  payable  to  the  wife  and  children  of  the 
member  or  their  representatives  was  held  to  be  for  the  benefit 
of  the  only  child  of  the  last  survivor  of  the  children  of  the  in- 
sured, the  wife  having  died  and  the  other  children  having 
died  without  issue.  The  court  said:  "  Here  (the  certificate)  is 
payable  to  the  children  or  '  their  representatives.'  This  ex- 
pression shows  that  the  possibility  of  the  death  of  some  or  all 
of  the  children  during  the  life  of  the  insured  was  not  over- 
looked, and  that  such  an  event  was  intended  to  be  provided 
for.  And  when  we  consider  the  nature  and  design  of  life  in- 
surance,  and  the  relation  of  the  parties,  we  think  the  policy 
should  be  construed  as  if  it  were  payable  to  such  of  the  chil- 
dren as  should  survive  the  insured,  and  the  surviving  issue  of 
such  as  might  die  during  his  life."  3  Where,  by  an  article  of 
the  by-laws  of  a  society  it  is  provided  that  the  benefit  fund 
may  be  disposed  of  in  a  certain  manner  by  the  member,  but, 
•if  not  so  disposed  of,  it  shall  go  to  the  heirs  and  legal  repre- 
sentatives of  such  member,  by  the  words  "  heirs  and  legal 
representatives,"  as  applied  to  personal  property,  is  evidently 
meant  next  of  kin,  as  ascertained  by  the  intestate  laws.4 

The  charter  of  a  society  stated :  "  The  general  nature  of  its 

•They  have  frequently  been  j^iven  286;  Greenwood  v.  Holbrook,  111  N. 

a  different  meaning.    2  Rinlf.  Wills,  Y.  465. 

401;  Warnecke  v.  Lembea,  71  111.  91;  '2  Relief  Association  v.  McAuley,  2 

Farnam  v.  Farnam,  58  Conn.  202;  2  Mackey  (D.  C.)  70;  see  §  176. 

Atl.  Rep.  325;  5  Atl.  Rep.  682;  Davies  3  Robinson  v.    Duvall,  79   Ky.    83; 

v.   Davies,   55    Conn.    319;     11    Atl.  see  Benefit  Association  v.  Hoffman, 

Rep.  500;  Cox  v.  Curwen,  118  Mass.  110  111.  603;  see  §§  186,  188. 

196;   Halsey  v.  Patterson,  37    N.  J.  4  Bishop  v.  Grand  Lodge,  112  N.  Y. 

Eq.   445;  Coster  v.  Butler,  63  How.  627;   20  N.  East.  Rep.  562;  3 Hodges' 

Pr.   311;   Lee  v.   Dill,  39  Barb.  516,  Appeal,   8  Weekly   Notes  of    Cases 

521;  Drake  v.  Pell,  3  Edw.  Ch.  266,  (Pennsylvania)  209;  Elsey  v.  Odd  Feb 


382  CONSTRUCTION    OF   DESIGNATION    OF    BENEFICIARY. 

business,  and  its  general  purpose,  is  the  insuring  the  lives  of 
the  members  upon  the  plan  of  paying  to  the  representatives  of 
every  deceased  member  a  certain  sum,  to  be  assessed  upon  and 
received  from  the  other  members  of  said  association."  There 
was  nothing  in  the  entire  contract  of  insurance,  limiting  the 
beneficiaries  to  any  particular  classes  of  persons,  and  the  word 
"  representatives"  was  construed  as  meaning  and  including  any 
person  whom  the  member  might  designate,  or,  if  he  should 
fail  to  designate  any  one,  the  person  to  whom  the  by-laws 
should  direct  the  fund  to  be  paid.1 

Where  a  certificate  provides  for  the  payment  of  the  benefit 
fund  to  the  "  heirs  or  representatives "  of  the  member,  the 
money  will  be  paid  to  the  heirs  or  next  of  kin,  if  it  appear  from 
the  context  that  the  object  of  the  member  was  to  make  pro- 
vision for  his  family,  and  not  that  the  money  should  go  to  his 
executors  or  administrators  to  be  administered  as  ordinary 
assets  of  his  estate.  The  intention  must  control  in  the  con- 
struction of  the  meaning  of  such  words,  and  that  intention  is 
to  be  gathered  by  a  view  of  the  context  and  circumstances, 
and  the  purposes  to  be  attained.  The  general  object  of  the 
society,  as  declared  in  its  charter  or  constitution,  may  throw 
light  upon  their  proper  meaning.  It  was  held,  in  one  case, 
that  since  "  where  it  is  meant  that  the  money  resulting  from 
the  policy  shall  descend  and  be  used  as  common  assets,  the 
invariable  language  is  '  to  pay  to  the  assured,  his  executors, 
administrators  or  assigns,'  the  changing  of  the  language  and 
usino-  terms  of  different  expression  clearly  import  that  the 
money  was  intended  for  the  benefit  of  his  heirs,  or  next  of  kin, 
and  that  it  was  not  to  be  administered  on  as  assets  by  the  exec- 
utor or  administrator."  The  only  child  and  sole  heir  of  the 
assured  was  given  the  money,  under  a  designation  of  "  heirs  or 
representatives,"  and  it  was  held  that  the  word  "  representa- 
tives "  used  in  the  policy  in  conjunction  with  the  word 
"heirs"  could  not  divest  her  title  or  divert  the  money  to  an- 
other source.2  In  Wason  v.  Colburn,3  a  different  conclusion 
was  announced.     An  endowment  policy  was  payable  "  to  the 

lows'  Mutual,  142  Mass.   224;    7  N.       2Loos  v.  Ins.  Co.,  41  Mo.  538. 
East.  Rep.  844;  see  §  189.  399  Mass.  342. 

1  Walter    v.    Benefit    Society,    42 
Minn.  204;  44  N.  W.  Rep.  57. 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  3S3 

said  assured,  or  in  case  of  prior  decease,  to  his  heirs  or  rep- 
resentatives." The  court  held  that  the  policy  was  primarily 
intended  to  be  for  the  benefit  of  the  assured  himself,  being  an 
endowment  policy  for  the  period  of  ten  years.  In  case  of  his 
decease  within  that  period,  it  was  made,  by  its  terms,  payable 
"  to  his  heirs  or  representatives."  Upon  his  death,  intestate, 
within  the  ten  years,  his  administrator,  who  was  his  per- 
sonal representative,  became  entitled,  by  well  settled  princi- 
ples of  law,  to  collect  the  amount  due,  and  hold  it  as  part  of 
the  estate  of  the  intestate.  The  court  referred  to  Loos  v.  Ins. 
Co.,  supra,  and  afterward  said :  "  The  term  '  representatives ' 
legally  indicates  administrators,  and  we  can  not  construe  it  as 
excluding  them." 

Words  are  not  always  used  in  the  same  sense,  and,  in  cases 
of  doubtful  phraseology  in  written  instruments,  it  is  the  prov- 
ince of  courts  to  ascertain  the  sense  in  which  they  were  used. 
For  this  purpose  they  may  not  only  examine  the  context,  as 
in  the  cases  just  reviewed,  but  they  may  also  consider  the  cir- 
cumstances and  conditions  surrounding  either  of  the  parties  to 
the  contract  at  the  time  it  was  executed.  Thus,  where  the 
aged  and  heavily  indebted  father  of  a  family  dependent  on  him 
for  support,  had  taken  a  certificate  of  insurance,  payable  to  his 
"legal  representatives,"  the  court  held  that  the  fund  was  pay- 
able to  his  widow  and  children,  stating  that  it  would  be  pre- 
sumed under  the  circumstances  that  he  intended  by  that  term 
to  describe  them,  rather  than  his  executors  or  administrators.1 

Where  a  member  procures  a  contract  of  insurance  to  be 
made  pa\Table  "  to  his  heirs,  executors,  administrators  or 
assigns,"  and  there  is  nothing  in  the  contract  showing  a  con- 
Tiaiv  intent,  the  fund  is  payable  upon  his  death  to  his  admin- 
istrator or  executor  for  the  payment  of  his  debts  and  for  dis- 
tribution under  the  law.2 

§  198.  The  assured. — The  promise  of  a  company  was  to 
pay  a  certain  sum  to  the  "assured,  his  executors,  administra- 
tors or  assigns  *  *  for  the  express  benefit  of  C.  M.  R — .  w  i  I'e 
of  the   said  assured,  and  their  children."     In  discussing  the 

1  Griswold  v.  Sawyer,  125  N.  Y.  41 1 ;  5  Rawson  v.  Jones.  52  Ga.  458:  Bur- 

26  N.    East.  Rep.  464;  Andrews  and  roughs  v.  State  Mutual,  97  Mass.  859; 

Gray,  JJ..  dissenting;  reversing  8  N.  Brown  v.  Mansur,  64  N.  H.  31);  5  Atl. 

Y.  Supp.  517.  R-p.  768;  2  N.  Eng.  Rep.  857. 


381  CONSTRUCTION   OF   DESIGNATION   OF   BENEFICIARY. 

meaning  of  these  words,  the  court  said  :  "  It  is  argued,  the 
word  '  assured,'  as  used  in  the  policy,  is  to  be  understood,  the 
parties  for  whose  benefit  the  policy  was  taken.  Such  con- 
struction can  not  be  maintained  without  doing  violence  to  the 
words  employed.  The  sum  insured  is  for  the  benefit  of  C.  M. 
R— ,  wife  of  the  '  assured '  and  their  children.  Plainly,  the 
word  '  assured '  as  there  used,  and  elsewhere  in  the  policy, 
means  the  husband,  with  whom  the  contract  was  made,  and 
no  reasoning,  however  subtle,  can  make  it  even  appear  to 
mean  anything  else." '  In  another  case  the  court  said :  "  The 
policy  recites  that  the  consideration  was  paid  by  the  plaintiff, 
and  the  promise  therein  is  to  pay  the  assured.  The  term 
'assured'  can  mean  none  other  than  the  party  paying  the  con- 
sideration and  asking  for  the  insurance  for  his  benefit."  a  In 
Hogle  v.  Ins.  Co.,3  the  insurance  money  was  payable  to  "  the 
assured,  his  executors,  administrators  or  assigns,"  and  the 
court  held  that  the  word  "  assured "  meant,  not  the  person 
whose  life  was  insured,  but  the  person  for  whose  benefit  the 
insurance  was  made,  and  so  held,  though  the  policy  speaks  of 
the  "assured,"  his  executors,  etc.4 

§  199.  "  Guardian "  of  member. — A  subdivision  of  an 
application  was  as  follows:  "  Name  and  relationship  of  per- 
son to  whom  benefit  is  to  be  paid"  (after  which  was  written 
the  name  of  the  beneficiary.)  Relation  (after  which  was  writ- 
ten the  word  "guardian."  In  commenting  upon  this  desig- 
nation, the  city  court  of  New  York  said :  "  The  term  '  guard- 
ian' after  the  word  'relation'  in  the  application  has  no 
significance  in  this  case.  The  applicant  was  twenty-four 
years  of  age,  and  in  sound  health  at  the  time  of  making   the 

1  Mass.  Mutual  v.  Robinson,   98  111.  whose  life  is  insured,    and   the  term 

324;    "  heirs    of    the    insured,"    see  the  '  assured '  to  the  person  or  persona 

Whitehead  v.  Ins.  Co.,  33  Hun  425.  for  whose  benefit  the  insurance  is  ef- 

*  Smith  v.  Ins.  Co.,  5  Lans.  545.  fected.     Where  a    person  insures  his 

3  6  Robertson  567;  4  Abb.  N.  S.  346.  own  life,  without  naming  any  other 

4  See  Connecticut  Mutual  v.  Luchs,  person  to  receive  the  money,  he 
108  U.  S.  498;  2  Sup.  Ct.  Rep.  949;  would,  if  such  nomenclature  were 
Brockway  v.  Ins.  Co.,  29  Fed.  Rep.  adopted,  be  at  once  the  insured  and  the 
766.  In  Bliss  on  Life  Insurance  at  assured.  Such  a  distinction  in  the  use 
section  5,  it  is  said:  "  There  has  re-  of  language  would  be  a  matter  of 
cently  been  some  attempt  to  give  great  convenience.  *  *  but  it  can 
more  precision  to  the  nomenclature  hardly  be  said  to  be  fully  estab- 
of  life    insurance,    by    applying  the  lished." 

term,  the    '  insured '  to  the    person 


CONSTRUCTION    OF    DESIGNATION    OF    BENEFICIARY.  385 

application.  It  was  known  to  all  that  the  plaintiff  could  not 
have  been  the  guardian  of  the  applicant  in  the  legal,  but  rathsr 
in  the  popular  sense  of  that  term,  which  means  '  one  who 
guards,  preserves  or  secures.'  (Webster's  Diet.)  The  plaint- 
iff kept  a  boarding  house,  and  the  applicant  boarded  with  her, 
and  in  this  limited  sense  '  she  guarded,  preserved  and  secured ' 
him.  The  term  as  used  in  the  application  means  this,  or 
nothing.  The  loss  was  payable  to  the  plaintiff,  and  the 
action  was  properly  brought  in  her  individual  name." l 

1  Carraher  v.  Insurance  Co.,  UN.  Y.  St.  Reporter  665. 
25 


CHAPTER  XIII. 

CONCERNING  BENEFICIARIES  IN  MUTUAL  BENEFIT  INSURANCE. 

§  200.     Estate  of  the  member  as  a  beneficiary. 

201.  When  the  member  becomes  a  beneficiary  by  inheritance. 

202.  Death  of  beneficiary  during  life  of  member. 

203.  Death  of  one  of  two  named  beneficiaries;  survivorship. 
201,  205.     Interest  of  beneficiary  vests  on  death  of  member. 

206.  Death  in  common  disaster;  survivorship;  presumption. 

207.  Death  of  member  and  beneficiary  at  same  instant. 

208.  Agreement  between  member  and  beneficiary  as  to  disposition  of 

fund. 

209.  When  beneficiaries  take  equally. 

210.  In  what  proportions  heirs  take  the  fund. 

§  200.  Estate  of  the  member  as  a  beneficiary. — When  a 
contract  of  insurance  is  made  payable  to  the  estate  of  the 
member,  the  fund  will,  generally  speaking,  go  to  his  adminis- 
trator or  executor  upon  his  death  as  general  assets  of  the  estate, 
for  the  payment  of  debts  and  for  distribution  according  to  the 
rules  established  by  the  statutes  of  distribution  of  the  domicile 
of  the  intestate,  or  according  to  the  terms  of  his  will.1  But 
in  Clinton  v.  The  Hope  Insurance  Company,2  the  designation 
of  the  beneficiary  was  "the  estate  of  Daniel  Ross."  The 
court,  in  giving  the  rule  to  determine  the  effect  of  these  terms, 
said:  "If  the  name  of  the  person  for  whose  benefit  the  insur- 
ance is  obtained  does  not  appear  upon  the  face  of  the  policy, 
or  if  the  designations  used  are  applicable  to  several  persons,  or 
if  the  description  of  the  assured  is  imperfect  or  ambiguous  so 
that  it  can  not  be  understood  without  explanation,  extrinsic 
evidence  may  be  resorted  to  to  ascertain  the  meaning  of  the 
contract;  and  when  thus  ascertained  it  will  be  held  to  apply  to 
the  interests  intended  to  be  covered  by  it,  and  they  will  be 
deemed  to  be  comprehended  within  it,  who  were  in  the  minds 
of  the  parties  when  the  contract  was  made." 3 

1  Daniel's  Ex'r  v.  Pratt,  143  Mass.       2  45  N.  Y.  461. 
216;  10  N.  East.  Rep.  166;  Basye  v.       sMay  on  Insurance,  §§  91,  445. 
Adams,  81  Ky.  368. 

(386) 


BENEFICIARIES    IN    MUTUAL   BENEFIT   INSURANCE.  3S7 

In  this  case  the  subject  of  the  insurance  was  a  cotton  mill, 
and  parol  evidence  was  admitted  to  show  who  was  intended 
by  the  designation  "  the  estate  of  Daniel  Ross,"  and  that  the 
insurance  was  taken  out  for  the  benefit  of  his  widow  and  heirs. 
The  admission  of  this  evidence  was  placed  upon  the  ground 
that  the  words  used  in  the  policy  were  intended  to  designate 
the  persons  holding  the  legal  title,  and  that  to  speak  of  the  prop- 
erty left  by  a  deceased  person,  including  the  real  property, 
especially  before  final  settlement  of  his  affairs,  as  his  estate, 
if  not  an  accurate,  is  not  an  unusual  designation.  A  policy 
of  life  insurance  was  issued  "  for  the  benefit  of  the  estate  of 
the  insured."  Under  a  statute  of  Florida,1  it  was  held  that 
wherever  the  contract  does  not  describe  a  person  or  persons, 
class  or  classes,  in  such  terms  as  to  show  affirmatively  that  the 
beneficiaries  are  not  the  children,  husband  or  wife  of  the  as- 
sured, it  inures  to  her  or  their  benefit.  Speaking  of  the  term 
"  for  the  benefit  of  the  estate  of  the  insured,"  the  court  said  : 
"  This  language  must  be  given  such  meaning  as  conforms  to  the 
intention  of  the  parties,  and  this  intention  must  be  determined 
by  the  acts  of  the  parties  and  surrounding  circumstances. 
*  *  There  is  nothing  in  this  bill  to  show  the  existence  of  a 
creditor  of  Pace  at  the  date  of  the  contract.  It  does  appear 
that  he  had  an  only  child,  the  plaintiff,  then  not  five  years  of 
age.  The  term  estate  here  in  its  strict  legal  signification  em- 
braces neither  the  administrator,  the  heir  nor  the  creditor  of 
the  assured.  It  means  the  effects,  personal  and  real,  left  by 
the  decedent,  when  given  a  signification  with  reference  to  a 
period  subsequent  to  his  death,  and  that  is  the  date  when  the 
benefit  was  to  accrue.  Such  literal  legal  signification  would 
be  absurd.  The  word  benefit  in  a  policy  of  insurance  must  be 
interpreted  with  reference  to  persons,  not  things.  An  insur- 
ance may  be  for  the  benefit  of  the  person  owning  the  house, 

'Section  22,  page  534,  McClellan's  clared  in  the  policy;  and  the  proceeds 

Digest:  "  Whenever  any  person  shall  thereof  shall  in  no  case  lie  liable  to 

die  in  this  state,  leaving  insurance  on  attachment,  garnishment  or  anj  legal 

his  or  her  life,  the  said  Insurance  shall  process  by  anj    creditor  or  creditors 

inure    exclusively  to  the  benefit  of  of  the  person  whose  life  was  so  in- 

his  or  her  child,  or  children,  husband  snivel,  unless  said  policy  declares  thai 

or  wife,  in  equal  portions,  or  to  any  said  insurance  was  effected  for  the 

other  person  or  persons,  for  whose  benefit  of  such  creditor  or  creditors. " 
US3  and  hciielit   said  insurance  is  de- 


338  BENEFICIARIES   IN   MUTUAL   BENEFIT   INSURANCE. 

not  for  the  house.  To  benefit  stocks  and  stores  was  not  the 
intention  of  the  parties.  Without  entering  into  any  elaborate 
discussion  of  the  subject  we  will  simply  state  that  the  cases 
having  a  bearing  upon  the  subject,1  show  that  these  and  similar 
terms,  under  the  circumstances  of  this  case,  are  so  interpreted 
as  to  benefit  the  surviving  members  of  the  family  rather  than 
for  the  benefit  of  the  creditor  or  administrator,  and  that  in 
this  instance  the  beneficiary  intended  was  the  infant  child. 
In  the  interpretation  of  contracts  of  this  character  the  courts 
go  a  great  way  in  this  direction.  This,  we  think,  would  have 
been  the  construction  of  this  policy,  independent  of  the  policy 
of  the  statute,  which,  as  a  matter  of  course,  should  have  some 
effect  in  controlling  our  action  in  this  matter."2 

Where  the  constitution  of  an  unincorporated  voluntary  so- 
ciety provides  in  effect  for  the  creation  of  a  trust  fund,  from 
which  upon  the  death  of  a  member  a  payment  of  $10,000  is 
directed  to  be  made  to  such  person  or  objects  as  he  may  have 
designated  in  writing,  or  if  no  such  written  disposition  has 
been  made  by  him,  then  to  certain  specified  persons,  such  fund 
forms  no  part  of  the  estate  of  the  deceased  member,  and  his 
personal  representatives  can  not  maintain  an  action  to  recover 
it.3  Where  a  certificate  of  insurance  on  the  life  of  a  wife  is  made 
payable  to  her  children,  and  she  dies  before  any  children  are 
born,  her  executor  may  not  maintain  an  action  at  law  for  the 
amount  of  the  insurance.  The  fact  that  she  had  power  to 
change  the  beneficiary  during  her  life,  but  did  not  exercise  it, 
does  not  make  the  contract  a  part  of  her  estate:4 

The  proceeds  of  a  policy  of  life  insurance  for  the  benefit  of 
the  wife  of  assured,  and  in  case  of  her  death  before  him,  "  for 
his  own  order,"  become,  on  the  death  of  assured  after  his 
wife's  death,  assets  of  his  estate,  to  be  administered  for  the 
benefit  of  his  creditors  and  distributees.5 

§  201.     When  the  member  becomes  a  beneficiary  by  inher- 

'Loos  v.  Ins.  Co.,  41  Mo.  538;  see  798.  But  the  society  might  be  liable 
§  258;  Clinton  v.  Ins.  Co.,  45  N.  Y.  454;  for  the  assessments  paid,  with  inter- 
Globe  Ins.  Co.  v.  Boyle,  21  Oh.  St.  est,  since  no  liability  ever  attached 
119.  on  the  contact. 

*  Pace  v.  Pace,  19  Fla.  438.  6  Boyden  v.  Ins.  Co.,  153  Mass.  544; 

3  Swift  v.  San  Francisco  Board,  67  27  N.  East.  Rep.  669;  see  Bancroft  v. 

Cal.  567.  Russell,  157  Mass.  47;  31 N.  East.  Rep. 

4McElwee  v.  Ins.  Co.,  47  Fed.  Rep.  710. 


BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE.  3S9 

itance. — A  benefit  certificate  is  often  made  payable  to  the 

wife  and  children  of  the  member.  As  any  one  or  all  of  such 
designated  beneficiaries  may  die  before  the  member,  it  becomes 
important  to  determine  whether  the  member  himself  becomes 
a  beneficiarv  by  inheritance  from  any  beneficiary  so  dying. 
Generally  speaking,  it  may  be  said  that  he  does  not.  Under 
the  general  plan  of  mutual  benefit  insurance,  the  beneficiary 
has  no  vested  right  in  the  benefit  fund,  and  the  persons  who 
may  be  beneficiaries  are  limited  so  as  to  exclude  the  member 
and  his  estate  from  taking  the  fund.1  But  these  features  of 
this  general  plan  are  changed  in  some  societies;  and  if  the  ben- 
eficiary so  dying  had  a  vested  right  in  the  fund,  and  if  the 
estate  of  the  member  may  under  the  contract  take  the  fund, 
then  the  case  does  not  differ  from  ordinary  life  insurance,  and. 
according  to  the  weight  of  authority,  the  member  becomes  a 
beneficiarv  under  the  contract,  where  he  is  the  heir  of  the  de- 
ceased beneficiary.  A  mutual  benefit  society  issued  to  A.  a 
certificate  of  membership  which  entitled  "  his  wife,  her  heirs 
or  assigns,  upon  the  death  of  said  A.  to  $3,000."  The  wife 
died  intestate  during  A.'s  lifetime  leaving  children,  and  after- 
ward A.  died  without  having  in  any  manner  changed  the  des- 
ignation of  his  beneficiarv.  It  was  held  that  as  A.  survived 
his  wife,  he  or  his  estate  was  entitled  to  a  share  as  her  heir. 
The  supreme  court  of  Pennsylvania  says  :  "  The  fact  that  this 
association  has  some  features  to  distinguish  it  from  a  life 
insurance  company  does  not  establish  any  error  in  this  judg- 
ment. The  husband  inherited  from  his  wife."  s  It  is  held  in 
some  courts  that  a  certificate  of  membership,  as  between  the 
member  and  the  society,  is  strictly  and  only  a  contract  for  the 
payment  of  money  upon  the  happening  of  a  contingencv.  un- 
certain only  as  to  the  time  when  it  will  occur,  and  is  subject  to 
the  general  rules  which  govern  in  the  interpretation  of  con- 
tracts.    But  when  considered  with   respect  to  the  rio-hts  of 

1  See  §  202.  prior  to  his.     Hutson  v.  Menifield.  51 

•  Mutual  Aid  Society  v.  Miller,  107  Ind.  24:  Harl.-y  v.  Heist,  86  bid.  196; 

Pa.  St   162;    see  Anderson's  Appeal,  Glanz  v.  Gloeckler,  mill.  App.  4^4: 

85   Pa.  St.   202:    De<dnther"s  Appeal,  affirmed  104  111.  573;  Endie  v.  Sleni- 

83  Pa.  St.  337,  where  policies  were  iimns,   26  X.   Y.   9:    Knickerbocker 

payable  to  tlie  wife  of  the  insured.  Lite  v.  Weite,  99  Mass.   157:  North 

"her   executor-,  administrators  and  American  Life  v.  Wilson.  Ill  Ma—. 

assigns."  and  the  husband  was  held  542:  Continental  Life  v.  Palmer.  42 

to  take  as  her  heir  upon  her  death  Conn.  60. 


390  BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE. 

those  who  claim  to  be  beneficiaries,  especially  when  they  are 
the  natural  objects  of  the  affection  and  bounty  of  the  person 
procuring  and  paying  for  the  insurance,  it  should  be  regarded 
in  the  light  of  a  testamentary  provision  rather  than  of  a  con- 
tract, and  should  be  interpreted  on  similar  principles.' 

A  man  took-  out  a  policy  of  insurance  on  his  life,  payable  to 
his  wife  and  children,  or  their  legal  representatives.  At  the 
date  of  the  policy  the  insured  had  three  children,  all  minors 
and  unmarried.  In  a  few  days  thereafter  his  wife  died.  He 
died  on  April  7,  187S,  having  survived  all  his  children.  Two 
of  the  children  died  in  infancy  and  unmarried;  and  one,  hav- 
ing married,  left  an  only  child  and  her  husband  surviving  her. 
Before  his  death,  and  after  the  death  of  all  his  children,  the 
insured  assigned  and  delivered  the  policy  to  his  niece,  intend- 
ing it  as  a  gift  to  her.  The  question  to  be  decided  was 
whether  the  grandson  or  the  niece  of  the  insured  was  entitled 
to  the  benefit  fund.  On  behalf  of  the  niece  it  was  contended 
that  upon  the  delivery  of  the  policy  the  wife  and  the  three 
children  of  the  insured  became  invested,  each  with  a  one- 
fourth  interest  in  it ;  that  upon  the  death  of  the  wife,  her 
interest  passed  to  her  husband  under  the  statutes  of  distribu- 
tion ;  that  at  the  death  of  the  unmarried  daughters,  their 
interests  passed  to  their  father  in  the  same  way,  and  that  at 
the  death  of  the  married  daughter,  during  the  life  of  her  father, 
her  interest  lapsed  as  if  it  had  been  a  legacy  ;  and  in  this  way 
the  insured  became  the  owner  of  the  entire  policy,  and  could 
invest  his  niece  with  a  good  title.  But  the  court  said :  "  In 
taking  the  policy,  the  insured  was  not  providing  for  himself, 
but  for  his  wife  and  children  after  his  death;  and  it  would  be 
unreasonable  to  suppose  that  he  intended,  in  case  one  of  these 
objects  of  his  affection  should  die  during  his  life,  that  the  in- 
terest of  the  one  so  dying  should  pass  to  himself,  and  at  his 
death  to  his  personal  representative.  It  would  be  more  con- 
sistent with  his  evident  design  in  insuring  his  life  for  the  bene- 
fit of  all  his  family — wife  and  children  alike — to  suppose  that 

'Robinson  v.  Duvall,  79  Ky.  83;  Conn.  65;  Union  Mutual  v.  Montgom- 
Duvall  v.  Goodson,  79  Ky.  224;  En-  ery,  70  Mich.  587;  38  N.  W.  Rep.  588; 
dowment  Association  v.  Wood,  4  14  West.  Rep.  877;  Bolton  v.  Bolton, 
Mackey  (D.  C.)  19;  McDermott  v.  73  Me.  299;  Chartrand  v.  Brace,  16 
Centennial  Mutual.  24  Mo.  App.  73;  Colo.  19;  26  Pac.  Rep.  152. 
Continental  Ins.  Co.  v.   Palmer,  43 


BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURE 

•his  intention  was,  that  in  case  one  or  more  shoul 
himself,  without  leaving  children,  the  share  to 
dying  would  have  been  entitled,  had  they  survived 
go  to  the  survivors.  He  dedicated  the  whole  to\ 
share  and  share  alike,  and  as  the  family  was  reduced  by  death 
and  he  came  to  renew  the  policy  by  paying  the  annual  premi- 
ums, it  can  scarcely  be  doubted  that  he  did  so  in  order  to  pro- 
vide for  those  who  still  survived ;  and  this  evident  intention 
ought  not  to  be  defeated  unless  there  are  insurmountable  legal 
obstacles  in  the  way  of  effectuating  it."  ' 

§  202.  Death  of  the  beneficiary  during  the  life  of  the 
member — When  the  heirs  of  the  beneficiary  do  not  take  the 
fund. — In  an  ordinary  contract  of  insurance,  where  the  bene- 
ficiary has  a  vested  interest  in  the  money  to  become  due  under 
it,  and  the  insured  is  in  some  respects  a  stranger  to  it,  the  death 
of  the  beneficiary  prior  to  that  of  the  insured  will  not  termi- 
nate his  interest  in  the  contract,  but  it  will  pass,  as  his  other 
personal  property,  to  his  legal  representatives.4 

But  it  is  a  general  principle  of  mutual  benefit  insurance  that 
the  beneficiary  named  in  a  certificate  acquires  no  vested  rights 
in  the  benefit  fund  until  the  death  of  the  member.  It  follows 
from  this  that  when  a  designated  beneficiary  dies  prior  to  the 
death  of  the  member,  the  benefit  fund  does  not,  on  the  subse- 
quent death  of  the  member,  go  to  the  administrator,  nor  de- 
scend to  the  heirs  of  such  beneficiary.3  This  general  principle 
may,  of  course,  be  changed  by  the  statute,  charter,  by-laws,  or 
certificate,  but  there  are  few  mutual  benefit  societies  in  which 
any  such  change  has  been  made.  A  member  of  a  society 
appointed  his  wife  as  his  beneficiary,  but  the  contract  of  insur- 
ance did  not  designate  to  whom  the  fund  should  be  paid,  in 
case  the  beneficiary  died  before  the  member.  The  appointment 
did  not  vest  in  the  beneficiary  the  absolute  right  to  the  fund. 
It  was  held,  under  these  facts,  that  the  appointment  was 
revoked  by  the  death  of   the   beneficiary;  that  Rev.  St.  AVis. 

1  Robinson   v.    Duvall,    79  Ky.  83;    60;    Johnson   v.    Hall,  55   Ark.    210: 
see  Covenant  Mutual  v.  Hoffman,  110    Hull  v.  Hull.  62  How.  Pr.  100. 
111.  603.  3Hellenberg  v.   I.   O.  O.  B.,  94  N. 

^Hutson  v.  Merrifield,  51  Ind.  24;  Y.  58(1;  Haskins  v.  Kendall,  L58Mass. 
Foster  v.  Gile,  50  Wis.  603;  Conti-  224;  Gutterson  v.  Gutterson,  50  Minn. 
nental  Ins.  Co.  v.  Palmer,  42  Conn.    258. 


392  BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE. 

§  2347,  which  empowers  a  husband  to  insure  his  life  in  favor 
of  his  wife,  and  provides  that  such  insurance  shall  inure  to  her 
separate  use  and  that  of  her  children,  does  not  apply  to  mutual 
benefit  insurance.1  The  charter  of  a  society  provided  for  pay- 
ment of  the  benefit  fund,  in  case  of  death,  to  the  legal  repre- 
sentatives of  a  member,  and  the  by-laws  provided  for  payment 
of  the  fund,  in  case  of  failure  to  designate  a  beneficiary,  to  the 
legal  representatives  of  the  deceased.  A  member  designated 
his  wife  as  his  beneficiary.  She  died  before  he  did,  but  he  did 
not  make  a  new  designation.  The  court  held  that,  under  the 
charter  and  by-laws,  if  a  member  failed  to  appoint  a  benefi- 
ciary, or  if,  at  the  date  of  his  death,  there  is  no  appointee 
named  by  him,  alive  and  capable  of  taking,  it  is  to  go  to  his 
legal  representatives,  and  in  this  case  it  was  held  that  his  rep- 
resentatives, not  hers,  took  the  fund.8  The  object  of  a  society, 
as  declared  by  the  charter,  was  "  to  provide  and  maintain  a 
fund  for  the  benefit  of  the  widow,  orphan,  heir,  assignee  or 
legatee  of  a  deceased  member."  By  a  provision  of  one  of  the 
by-laws,  if  a  deceased  member  had  no  "  legal  representatives," 
the  fund  should  become  the  property  of  the  association.  A 
member  made  the  following  designation  of  beneficiary  in  his 
application :  "  In  the  event  of  his  death  he  directs  that  all  ben- 
efits arising  from  his  connection  with  the  association  be  paid 
to  his  wife,  A.  E.,  unless  he  shall  otherwise  order  and  give  to 
the  secretary  of  the  association  ten  days  notice  of  his  desire." 
His  wife,  A.  R.,  dying,  the  member  married  S.  A.  R.,  and  after- 
ward died  intestate  without  children,  leaving  his  second  wife 
surviving  him.  In  construing  this  designation,  which  he  left 
unchanged,  the  court  held,  that  the  language  used  by  the  mem- 
ber in  designating  his  first  wife  as  the  beneficiary,  must  be  inter- 
preted as  meaning  that  the  first  wife  should  take  the  fund  in 
case  she  survived  him,  and,  as  she  did  not,  her  representatives 
were  not  entitled  to  it.3     A  beneficial  association  to  provide 

1  Given  v.  Wisconsin  Odd  Fellows,  'Expressmen's    Aid      Society     v. 

etc.,  71  Wis.  547;  37  N.  W.  Rep.  817;  Lewis,  9  Mo.  App.  412;  see  also  Mun- 

Riley  v.  Riley,  75  Wis.  464;  44  N.  W.  hall  v.    Daly,   37' 111.   App.  628;   see 

Rep.  112;  Lyon  v.  Rolfe,  76  Mich.  146;  Brew  v.  Clement,  48  Kans.  386;  29 

42  N.  W.  Rep.  1094;  Rothweiler  v.  Pac.  Rep.  704;   see  Waldheim  v.  Ins. 

Ryan,  4  Oh.  Cir.  Ct.  Repts.  338;  con-  Co.  28  N.  Y.  Supp.  766. 

tra,  Clark  v.  Aid   Union,  6  Pa.  Co.  3  Masonic  Mutual,  etc.,  v.  McAuley, 

Repts.  321.  2  Mackey  (D.  C.)  70. 


BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE.  393 

"  an  endowment  fund  to  be  paid  to  the  persons  entitled  thereto" 
issued  to  one  of  its  members  a  certificate  of  insurance  by  which 
it  agreed  to  pay  to  his  wife  "  or  her  legal  representatives  "  a 
certain  sum  within  sixty  days  after  his  death.  The  wife  died, 
and  thereafter,  without  making  any  change  in  the  beneficiary, 
the  member  died.  The  legal  representatives  of  the  deceased 
wife  then  claimed  the  fund. 

The  supreme  court  of  the  District  of  Columbia  held  that  this 
contract  of  insurance  was  a  trust;  that  when  the  beneficiary 
died,  the  object  of  the  trust  failed,  and  there  was  a  resulting 
trust  to  the  member;  that  the  case  was  analogous  to  a  lapsed 
legacy,  and  that  the  words  "  or  her  legal  representatives  "  were 
of  no  importance,  inasmuch  as  those  persons  would  have  taken 
the  fund  in  succession  and  by  representation,  if  it  had  been  vested 
in  the  beneficiary,  "whether  expressly  named  by  the  member  or 
not;  but  since  the  beneficiary's  death  before  the  member's  pre- 
vented her  ever  taking  any  interest  in  the  bequest,  it  followed 
that  her  executors  or  administrators  could  take  no  title 
thereto — that  the  fact  that  "her  legal  representatives  "  were 
named  afterward  did  not  indicate  that  they  ware  to  take  as 
beneficiaries  successively  nominated;  that  there  was  but  a  single 
designation  and  that  designation  was  to  the  wife  alone;  that 
the  words  "  legal  representatives,"  as  used  in  the  certificate, 
had  no  signification  different  from  that  which  is  attributable  to 
those  words  generally — namely,  persons  appointed  either  by 
will,  or  by  the  law,  to  administer  upon  the  estate  of  a  deceased 
person;  and  that  the  estate  of  the  husband  was  entitled  to  the 
fund.1  This  decision,  written  by  Justice  Wylie  of  the  court, 
was  concurred  in  by  Justice  James,  but  Chief  Justice  Carter 
wrote  a  dissenting  opinion  in  which  he  held  that  the  contract 
of  insurance  was  to  be  construed  as  any  other  contract,  and 
that  the  doctrine  of  a  lapsed  legacy  did  not  apply  to  such  con- 
tracts. 

By  the  terms  of  the  constitution  and  by-laws  of  an  associa- 
tion, members  are  entitled  to  participate  in  the  benefit  I'm nd 
"  with  the  right  to  hold,  dispose  of  and  fully  control  said  bene- 
fit at  all  times."  A  member  had  issued  to  him  by  the  associa- 
tion a  certificate  in  which  he  designated  his  wife  as  his  bene- 
ficiary.    She  died,  and  afterward   the   member  died   without 

1  Washington  Association  v.  Wood,  4  Mackey  (D.  C.)  19. 


394  BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE. 

having  disposed  of  the  fund  in  any  manner  after  her  death. 
The  court,  in  determining  whether  her  or  his  administrator 
took  the  fund,  said  :  "  With  this  right  at  all  times  to  hold, 
dispose  of  and  control,  his  mere  designation  of  some  person  to 
receive  the  benefit  would  be  revocable.  It  would  not  prevent 
his  subsequently  designating  some  other  person  to  receive  it. 
While,  in  case  of  his  death  without  having  revoked  his  ap- 
pointment of  his  wife,  she  would  have  been  entitled  to  receive 
the  benefit,  yet  during  his  life,  because  of  the  power  of  revoca- 
tion, all  that  she  had  was  a  mere  expectancy,  dependent  on 
his  will  and  pleasure.  That  expectancy  was  not  property,  not 
estate.  The  expectancy  terminated  when  she  died,  and  did 
not  pass  to  her  administrator."  '  A  certificate  of  membership 
provided  for  the  payment  of  a  certain  sum  within  thirty  days 
after  due  notice  and  satisfactory  evidence  of  his  death,  to  his 
wife,  or  the  legal  representative*  of  the  insured  member.  The 
court  held  that  the  intention  of  the  assured  was  that  his  wife 
should  have  the  proceeds,  in  case  she  survived  him,  but,  in 
case  she  did  not,  such  proceeds  were  to  go  to  his  executor  or 
administrator,  to  be  distributed  in  due  course  of  administra- 
tion.2 A  certificate  was  payable  to  "  Lorey  E.  Lyon,  heirs,  ad- 
ministrators, or  assigns."  She  was  the  wife  of  the  member, 
and  died  before  him.  There  were  no  children  of  the  marriage. 
It  was  held  that  the  heirs  of  the  member  and  not  those  of  his 
wife,  the  beneficiary,  were  entitled  to  the  benefit.3 

§  203.  When  beneficiaries  hold  in  joint  tenancy  with 
right  of  survivorship. — Where  there  is  nothing  in  the  prin- 
ciples of  government  or  policies  of  law  opposed  to  the  princi- 

1  Richmond,  Adm'r,  v.  Johnson,  ance  contracts  that  where  a  husband, 
Adm'r,  28  Minn.  447;  see  Bickerton  v.  after  the  death  of  his  wife,  in  whose 
Jacques  and  Mutual  Life.  28  Hun  (N.  favor  he  had  insured  his  life,  did  not 
Y.)  119;  Tafel  v.  Supreme  Comman-  surrender  the  policy,  and  made  no 
dery,  12  Cin.  Law  Bull.  35;  Gutterson  change  in  the  beneficiary,  the  pre- 
v.  Gutterson,  50  Minn.- 278;  52  N.  W.  sumption  was  that  he  intended  her 
Rep.  530;  contra,  Clark  v.  Aid  Union,  personal  representatives  to  take,  and 
6  Pa.  Co.  Repts.  321.  on  his  death  the  policy  was  payable 

2  Johnson  v.  Van  Epps,  110  111.  551;  to  them,  and  not  to  his  own  personal 
14  111.  App.  201.  representatives.      Waldheim   v.  Ins. 

3 Lyon  v.  Rolfe,  76  Mich.  146;  42  N.  Co.,  13  N.  Y.  Supp.  577;    see  U.  S. 

W.  Rep.  1094;  Silvers  v.  Association,  Trust  Co.  v.  Ins.  Co.,   115  N.  Y.  157; 

94  Mich.  39;  53  N.  W.  Rep.  935.     It  21  N.  East.  Rep.  1025;  Foster  v.  Gile, 

has  been  held  in  ordinary  life  insur-  50  Wis.  603. 


BENEFICIARIES    IN   MUTUAL   BENEFIT    INSURANCE.  395 

pie  or  doctrine  of  survivorship  in  joint  tenancy,  a  contract  of 
mutual  benefit  insurance,  payable  to  the  wife  and  daughter  of 
the  member,  creates  a  joint  tenancy  in  the  beneficiaries,  with 
the  right  of  survivorship.1  The  law  in  such  a  case  is  analogous 
to  the  law  relating  to  legacies  and  devises,  where,  on  the  death 
of  a  joint  legatee  or  devisee,  the  survivor  is  entitled  to  the 
whole  amount.  "When  two  persons  are  made  the  beneficiaries 
of  an  ordinary  contract  of  insurance,  they  at  once  take  a 
vested  interest  in  it  as  tenants  in  common.  On  the  death 
of  one  of  them  before  the  death  of  the  insured,  his  heirs  take 
his  interest.  But  in  mutual  benefit  insurance  the  expectant 
interest  of  the  beneficiary  lapses  on  his  death  prior  to  that  of 
the  member,2  and  when  two  persons  are  named  as  the  benefi- 
ciaries of  a  contract  of  mutual  benefit  insurance,  the  survivor 
takes  the  fund,  unless  the  policy  of  the  law  is  opposed  to  the 
doctrine  of  survivorship  in  joint  tenancy. 

§  204.  When  a  class  of  persons  is  designated  to  take  the 
fund,  the  interests  vest  on  the  death  of  the  member. — When 
a  class  of  persons  is  designated  as  the  beneficiaries  of  a  contract 
of  insurance,  all  persons  belonging  to  that  class,  in  existence  at 
the  death  of  the  member,  take  the  fund  in  equal  proportions 
immediately  on  his  death,  unless  a  contrary  intent  can  be  in- 
ferred from  some  particular  language  of  the  contract,  or  from 
such  extrinsic  facts  as  may  be  entitled  to  consideration  in  con- 
struing its  provisions.3  The  designation  by  a  member  of  his 
children  as  his  beneficiaries  has  reference  to  such  children  as 
may  survive  him,  and  not  to  the  children  in  existence  at  the 
time  of  the  designation.  Where  his  "family"  has  been  made 
the  object  of  his  provision,  those  of  the  family  who  survive 
the  member  are  entitled  to  the  benefit; '  and  by  the  design  a- 
tion  of  his  heirs,  the  member  will  be  understood  to  mean  that 
whoever  may  prove  to  be  his  heirs  at  his  death  shall  take  the 
fund.6  The  fact  that  the  society  may  not  be  required,  under 
the  terms  of  the  contract,  to  pay  the  fund  for  a  certain  time 
after  the  death  of  the  member,  or  proof  of  such  death,  does 

1  Farr  v.  Grand  Lodge,  83  Wis.  446;  4  Brooklyn  Association  v.  Hanson, 

53  N.  W.  Rep.  738.  6  N.  Y.  Supp.  161;  53  Hun  149;  g§  186, 

4  See  §  202.  187,  194. 

3  Campbell  v.    Rawdon.    18  N.  Y.  6  g§  189  - 192. 
412;  see  Chasmar  v.  Bucken,  37  N. 
J.  Eq.  415;  gg  186,  189,  192,  194. 


396  BENEFICIARIES    IN    MUTCJAL    BENEFIT   INSURANCE. 

not  alter  the  rule  by  fixing  another  time  for  the  vesting  of 
the  interests;  and  if  one  of  the  class  dies  after  the  death  of  the 
member,  and  before  payment  of  the  fund,  his  proportionate 
interest  descends  to  his  administrator,  and  is  not  divided 
among  the  survivors  of  the  class  at  the  time  of  payment.1  A 
contract  of  insurance  is  not  void  for  uncertainty  because  the 
beneficiaries  are  designated  generally  as  a  class  and  not  spe- 
cifically by  name.  It  is  proper  for  a  member  to  make  his 
certificate  payable  generally  to  his  heirs  or  to  his  children.2 

§  205.  The  right  to  the  fund  vests  immediately  upon  the 
death  of  the  member. —  It  is  the  well  settled  policy  of  the 
law  to  favor  vested,  rather  than  contingent,  estates;  the  first, 
rather  than  the  second,  taker.  This  principle  may  be  applied 
in  determining  the  ownership  of  the  benefit  fund  of  a  so- 
ciety, and  it  may  be  laid  down  as  the  rule  that,  unless  it  is 
otherwise  provided  in  the  contract,  the  right  of  the  first 
named  beneficiary  to  the  fund  vests  at  once  and  absolutely  on 
the  death  of  the  member.3  Where  the  fund  was  payable  at 
the  death  of  the  member  "  to  his  wife,  and  in  case  of  her 
death,"  to  his  children,  the  right  to  the  fund  vested  in  the  sur- 
viving wife  immediately  upon  the  death  of  the  member,  and 
upon  her  death  passed  as  a  part  of  her  estate  to  her  adminis- 
trator.'1 Under  a  certificate  of  a  mutual  benefit  society,  nam- 
ing two  persons  as  beneficiaries,  and  providing  that,  "  in  case 
of  death  of  either,  full  amount  to  go  to  the  survivor,  if  living; 
if  not  living,  to  the  heirs  of  said  member,"  if  the  member 
dies  first,  the  benefit  fund  vests  in  them  both;  and  if  one  of 
the  beneficiaries  dies  before  payment  of  the  benefit  is  made,  his 
share  of  the  fund  goes  to  his  executor,  not  to  the  survivor.5  In 
passing  upon  this  question  the  court  said :  "  The  time  of  pay- 

1  The  case  of  The  Covenant  Mutual  3  Aiken  v.  Association,  13  N.  Y. 
Benefit  Association  v.Hoff man  et  ah,  Supp.  579;  Chartrand  v.  Brace,  16 
110  111.  603,  is  inconsistent  with  the  Colo.  19;  26  Pac.  Rep.  152;  Union  v. 
doctrine  as  stated  in  the  text,  but  it  Montgomery,  70  Mich.  587;  38  N.  W. 
is  manifestly  wrong  on  this  point;  Rep.  588. 

and  it  is  also  wrong  in  holding,  un-       4  Chartrand  v.  Brace,   supra;  El- 
der the  facts  stated  in  the  opinion,    liott,  J.,  dissenting, 
that  the  widow  is  an  heir  of  her  de-       6  Union  Mutual  Aid  Ass'n  v.  Mont- 
ceased  husband    under  the  laws    of   gomery,  70  Mich.  587;  38  N.  W.  Rep. 
Illinois.     See  note,  §  190,  where  this    588;  14  West.  Rep.  877. 
ease  is  quoted  from. 

2  Brooklyn  Life  v.  Bledsoe,  52  Ala. 
538;  see  §176. 


BENEFICIARIES    IN    MUTUAL    BENEFIT   INSURANCE.  307 

ment  provided  for,  namely,  ninety  days  after  the  death  of  the 
member,  has  no  reference  to  who  shall  take  as  survivor. 
The  time  of  payment  is  defined  simply  to  enable  the  corpora- 
tion to  raise  the  fund  by  assessment  upon  the  members.  If 
the  son  had  died  before  his  father,  the  whole  sum  would  have 
been  payable  to  the  daughter,  and,  if  she  had  also  died  before 
her  father,  the  fund  would  have  been  payable  to  his  heirs. 
The  words  '  if  living,'  and  '  if  not  living '  refer  to  living  at  the 
time  of  (the  member's)  death."  ' 

§206.  Death  in  common  disaster — Survivorship — Pre- 
sumptions.— Where  the  member  of  a  benefit  association, 
whose  certificate  is  payable  to  his  wife,  or,  in  case  of  her 
death  in  his  lifetime,  to  his  children,  or,  if  there  be  no  chil- 
dren, to  his  mother,  and,  if  she  be  dead,  to  his  father,  and,  fail- 
ing all  these,  to  his  brothers  and  sisters,  perishes  in  a  flood 
with  his  wife  and  children,  there  is  no  presumption  as  to  sur- 
vivorship, but  the  widow's  representative  is  entitled  to  the 
fund,  in  the  absence  of  evidence  that  she  died  before  her 
husband.2 

1  See  Continental  Ins.  Co.  v.  Webb,  the  younger.  By  the  Mahometan 
54  Ala.  688,  and  Chartrand  v.  Brace,  law  of  India,  when  relatives  thus 
16  Colo.  19;  26  Pac.  Rep.  152.  perish  together,  it  is  to  be  presumed 

2  Cowman  v.  Rogers,  73  Md.  403;  that  they  all  died  at  the  same  mo- 
21  Atl.  Rep.  64.  ment :  and  such  also  was  the  rule  of  the 

"  By  the  Roman  law,  if  a  father  ancient  Danish  law.  But  the  com- 
and  son  perished  together  in  the  same  mon  law,  which  governs  us,  knew  no 
shipwreck  or  battle,  and  the  son  was  such  arbitrary  presumptions.  By 
under  age  of  puberty,  it  was  pre-  that  law,  where  several  lives  are  lost 
sumed  that  he  died  first,  but,  if  in  the  same  disaster,  there  is  no  pi*e- 
above  that  age,  that  he  was  the  sur-  sumption  of  survivorship  by  reason 
vivor,  upon  the  principle  that,  in  the  of  age  or  sex,  nor  is  it  presumed  that 
former  case,  the  elder  is  generally  all  died  at  the  same  moment.  Sur- 
the  more  robust,  and.  in  the  latter,  vivorship  in  such  a  ease  must  be 
the  younger.  The  Code  Napoleon  proved  by  the  party  asserting  it.  Xn 
had  regard  to  the  ages  of  lift. 'en  and  presumption  will  be  raised  bybalanc- 
sixty,  presuming  that,  of  those  under  ing  probabilities  that  then'  was  a 
the  former  age,  the  eldest  survived,  survivor,  or  who  it  was."'  Wing  v. 
and  that,  of  those  above  the  latter  Angrave,  8  H.  L.  Cas.  183;  Under- 
age, the  youngest  survived.  If  the  wood  v.  Wing.  4  Detox.  M.  &  G. 
parties  were  between  those  ages,  but  633;  Johnson  v.  Merithew,  80  Me.  ill; 
of  different  sexes,  the  male  was  pre-  13  Atl.  Rep.  1S2;  Newell  v.  Nichols, 
sumed  to  have  survived;  Lf  they  were  75  N.  YV78;  1  Greenl.  Ev.,  §§  29,  80; 
of  the  same  sex,  the  presumption  Best,  E v.,  804;  2  Whart  Ev.,  ?,>'  1280- 
was  in  favor  of  the  survivorship  of  1282;  2  Kent,  Coinm.,  572. 


398  BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE. 

§  207.  Death  of  member  and  beneficiary  at  the  same 
instant  of  time-. — Where  the  by-laws  provide  that  the  fund 
shall  be  paid  to  the  heirs  of  the  member  in  case  the  beneficiary 
named  in  the  certificate  shall  die  before  the  member,  the  death 
of  the  member  and  the  beneficiary  at  the  same  instant  of  time 
renders  the  latter  as  incapable  of  taking  the  fund  as  if  he  had 
died  first,  and  the  member's  heirs  are  entitled  to  it.1 

§  208.  Agreement  between  member  and  beneficiary  as 
to  the  disposition  to  be  made  of  the  fund. — Parol  evidence 
is  admissible  to  show  that  the  beneficiary  designated  in  a  cer- 
tificate, in  consideration  of  such  designation,  promised  the 
member  that,  after  deducting  from  the  benefit  fund  whatever 
sum  of  money  might  be  due  him  from  the  member  at  the  lat- 
ter's  death,  he  would  pay  the  remainder  to  the  heirs  of  the 
member.  Such  oral  testimony  is  not  in  conflict  with  the  writ- 
ten contract  of  insurance.  It  does  not  vary  or  control  the 
contract  between  the  deceased  and  the  society,  but  shows 
another  and  an  independent  contract  between  him  and  the 
beneficiary.  It  is  not  offered  to  show  that  the  beneficiary  is 
not  to  receive  the  money,  but  to  show  what  he  is  to  do  with  it 
after  he  has  received  it.'2  Money  left  to  a  beneficiary  to  pay 
the  debts  of  the  insured  is  impressed  with  a  trust  which  equity 
will  enforce.  It  is  always  a  question,  however,  to  be  decided 
by  an  inspection  of  the  contract  of  insurance,  whether  the 
member  may,  during  life,  so  far  control  the  fund  by  the  crea- 
tion of  a  trust  or  otherwise;  as  to  make  it  applicable  to  the 
payment  of  his  debts  after  his  death.  Where  he  has  merely 
the  right  to  provide  a  fund  to  be  disposed  of  by  the  general 
terms  of  the  contract,  or  by  the  naked  power  of  appointment, 
among  certain  classes  of  beneficiaries,  such  as  the  families, 
heirs  or  dependents  of  deceased  members,  and  he  has  no  prop- 
erty rights  in  such  fund,  he  can  not  deal  with  it  as  property, 
and  impress  it  with  a  trust  for  the  payment  of  debts,  as  the 
impress  of  a  trust  upon  the  disposition  of  property  necessarily 
presupposes  an  ownership  of  the  property.  Where  a  person 
procures  his  appointment  as  beneficiary  by  promising  to  dis- 

1  Paden  v.  Briscoe,  81  Texas  563;  matter  of  Morian,  22  N.  Y.  St.  Rep. 
17  S.  W.  Rep.  42.  631;   Boasburg  v.    Cronan,  7   N.  Y. 

2  Catland  v.  Hoyt,   78  Me.  355;  5  Supp.  5. 
Atl.  Rep.  775;  2  N.  Eng.  Rep.  876;  In 


BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE.  309 

tribute  the  fund  among  the  creditors  of  the  member  after  the 
death  of  the  latter,  and  such  a  disposition  of  the  fund  is  con- 
trary to  the  terms  of  the  contract,  equity  will  lay  hold  of  the 
fund  and  distribute  it  among  those  empowered  and  entitled  to 
take  it.1 

§  209.  When  beneficiaries  take  equally. — Where  a  bene- 
fit is  granted  to  several  persons,  and  their  respective  propor- 
tions are  not  specified,  the  beneficiaries  take  equally.2  Where 
a  certificate  of  membership  provides  that  the  benefit  shall  at 
the  death  of  the  insured  be  paid  to  his  Avife  and  children,  such 
benefit  is  payable  to  his  wife  and  children  equally.  In  such  a 
case  the  wife  is  neither  the  inferior  nor  the  superior  of  her 
joint  beneficiaries,  but  is  their  equal,  and  the  beneficiaries  take 
by  virtue  of  the  contract,  not  by  descent.3  Where  a  certifi- 
cate of  membership  is  made  payable  to  the  wife  and  children 
of  the  member,  each  child  is  entitled  to  receive  his  proportionate 
share  of  the  benefit,  although  one  of  such  children  may  never 
have  lived  with  his  father  as  a  part  of  his  father's  family,  and 
may  also  have  received  a  portion  of  his  father's  estate  prior  to 
his  father's  death.  The  court,  in  thus  deciding,  said  :  k>  It 
must  be  supposed  that  this  grand  lodge  understood  the  lan- 
guage which  it  used  in  the  contract,  and  that  it  intended  to 
make  just  the  kind  of  contract  which  it  did  in  fact  make,  and 
that  it  intended  to  bind  itself  to  perform  just  what  it  agreed 
to  perform,  and  did  not  intend  to  be  bound  by  any  secret 
arrangements,  or  settlements,  or  understandings  previously  en- 
tered into,  or  at  any  time  existing  between  any  of  the  mem- 
bers of  the  family.  We  think  this  grand  lodge  is  simply 
bound  to  pay  in  accordance  with  the  terms  of  its  contract; 
and  its  contract  says  that  it  shall  pay  the  fund  to  the  wife 
and  children  of  (the  member  insured),  which  according  to  all 
well-settled  rules  of  construction  means  the  wife  and  children 

1  Boasburg  v.  Cronan,  9  N.  Y.Supp.  Gould  v.  Emerson,  99  Mass.  154;  Jack" 

664.  i n an  v.  Nelson.  1  i;    Mass.  800;    1?   X. 

■  Wilburn  v.   Wilburn    et    al.,   83  East.    Rep.    529;     Conn.     Mutual    v. 

Ind.  5.");  Crockett  v.  Crockett.  2  Phil-  Baldwin,  15  R.  I.  100:  Seyton  v.  Sat- 

Lips,  553;    AJlen  v.  Hoyt,  5  Met.  824;  terthwaite,    34   L.   R.    Ch.  D.    nil; 

see §§  185,  204,  210.  Grand  Lo.l^e  v.  Sater,    it  Mo.  App. 

3Felix  v.  Grand    Lodge,  A.  O.  U.  445;   contra,  Young    Men's  Associa- 

W.  81  Kan.  81;  Wilburn  v.  Wilburn,  tion  v.  Pollard,  3  Oh.  Cir.  Ct,   Repts. 

83  Ind.  55:  Hamilton  v.   Pitcher,  5:5  577. 
Mo.  334;  Cragin  v.  <  ragin,  (id  Me.  517; 


400  BENEFICIARIES    IN   MUTUAL    BENEFIT    INSURANCE. 

equally."  J  In  Hallan  v.  Gardner's  Adm'r,2  the  superior  court 
held  that,  when  the  charter  of  a  society  appoints  the  widow 
and  children  of  the  member  as  his  beneficiaries,  but  does  not 
specify  in  what  proportions  they  shall  take  the  fund  under  a 
certificate  issued  by  it,  they  take  equally.  But  the  court  of 
appeals  of  Kentucky  held  otherwise  in  a  case  involving  this 
point.  Thus,  the  charter  of  a  society  provides  that  "  the  fund 
created  for  the  benefit  of  the  widow  and  children  of  a 
deceased  member  shall  be  paid  to  them,"  but  does  not  declare 
in  what  proportion  each  shall  take.  In  McLin  v.  Calvert,3  it 
was  held  that  the  statutory  rule  as  to  distribution  of  the  sur- 
plus of  personalty  of  an  intestate's  estate  should  obtain  in  the 
distribution  of  a  benefit  fund  derived  from  this  society.  The 
court  said  :  "  It  is  most  natural  and  reasonable,  as  well  as  just, 
that  when  the  policy  and  charter  fail  to  make  a  complete  pro- 
vision for  the  distribution  of  the  fund,  the  courts  should  adopt 
the  statutory  rule  for  the  distribution  of  the  surplus  personalty 
of  estates,  and  divide  it  as  they  would  do  if  the  money  was 
the  proceeds  of  a  note  or  bond  held  by  the  decedent.  *  * 
This  seems  to  us  to  be  not  only  just,  but  what  a  large  part,  if 
not  all,  of  those  who  insure  for  the  benefit  of  their  families, 
would  understand  to  be  the  effect  of  the  contract  made  with 
the  insurance  company;  and  in  laying  down  this  rule,  we 
entertain  little  doubt  that  we  are  doing  just  what  the  insured 
would  have  directed  to  be  done  if  the  question  had  been  pro- 
pounded to  him."  4  Where  a  member  has  made  the  children 
of  his  brothers  and  sisters  the  beneficiaries  of  his  certificate, 
they  will  take  per  capita  and  not  per  stirpes.6  .Where  the 
fund  is  directed  to  be  divided  equally  between  the  member's 
wife  and  children,  the  wife  does  not  take  one-half,  and  the 
children  the  other,  but  she  takes  the  same  share  in  the  fund 
as  each  of  the  children,  and  no  more." 

1  Felix  v.  Grand  Lodge,  A.  O.  U.  B  Malone  v.  Majors,  27  Tenn.  (8 
W.  31  Kan.  81;  1  Pac.  Rep.  281;   see   Hump.)  577. 

§§  185,  186.  6In  re  Mary  E.  Morgan  et  al.,  3 

2  5  Ky.  Law  Rep  857.  Demarest  (N.  Y.)  61;  Lord  v.  Moore, 

3  78  Ky.  472;  Kelley  v.  Ball  (Ky.),  20  Conn.  122;  Myres  v.  Myres,  23 
19  S.  W.  Rep.  581.  How.    Pr.  410;   Bunner  v.  Storm,  1 

4  See  Continental  Life  v.  Palmer,  Sand.  Ch.  35;  Collins  v.  Hoxie,  9  Paige 
42  Conn.  60;  see  also  Young  Men's  81;  Lee  v.  Lee,  39  Barb.  172;  Murphy 
Mutual  v.  Pollard,  3  Ohio  Circuit  577.  v.  Harvey,  4  Edw.  131. 


BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE.  401 

§  210.  In  what  proportion  heirs  take  the  fund. — When 
gifts  by  will  to  heirs-at-law  are  made  to  them  simpliciter,  the 
persons  to  take,  and  the  proportion  which  they  shall  take, 
must  be  determined  by  the  statute  of  descent  and  distribution. 
The  will  in  such  a  case  not  only  designates  who  are  to  take, 
but  also  the  quantum  of  the  estate  taken.1  For  the  purpose  of 
ascertaining  the  persons  who  are  the  beneficiaries  under  a 
designation  of  "my  heirs,"  it  is  necessary  to  consult  the  stat- 
utes of  the  state  which  cast  the  descent  of  the  property  of  an 
intestate.  But  from  this  it  does  not  follow  that  the  statute 
determines  the  proportion  of  the  fund  which  each  heir  shall 
take.  When  a  member  has  made  his  certificate  payable  to  his 
heirs,  they  do  not  take  the  fund  by  descent,  but  by  contract. 
The  statutes  of  descent  and  distribution  cease  to  be  of  use, 
therefore,  at  the  very  moment  when  the  heirs-at-law  of  the 
intestate  have  been  found  according  to  their  provisions.  Thev 
point  out  the  persons  whom  the  contract  declares  shall  be  the 
beneficiaries,  but  they  do  not  determine  the  rights  of  such 
persons  under  the  contract.2  The  rights  of  the  benefi- 
ciaries in  a  certificate  taken  out  by  a  member  are  such 
as  the  contract  confers,  and  are  not  rights  arising  by  opera- 
tion of  statutory  rules.  The  contract,  and  not  the  statute, 
fixes  their  rights,  and  they  have  such  rights  onlv  as  the 
contract  of  insurance  vests  in  them.  We  are,  therefore, 
to  look  to  the  terms  of  the  agreement,  and  not  to  the  pro- 
visions of  the  statute,  to  ascertain  the  rights  of  the  parties.3 

Where  a  member  of  a  society  makes  his  certificate  payable 
to  his  legal  heirs,  and  dies,  leaving  a  widow  and  children,  the 
widow,  where  she  is  the  heir  of  her  husband  and  entitled  to 
a  larger  part  of  his  estate  than  any  one  of  his  children,  is  not 
the  superior,  or  the  inferior  of  her  joint  beneficiaries,  but  their 
equal'.  This  is  in  harmony  with  the  general  principle  that 
when  a  benefit  is  granted  to  several,  and  their  respective  pro- 
portions are  not  specified,  the  beneficiaries  take  equally.'' 

1  Rawson  v.  Rawson,  52  111.  62;  Young  Men's  Association  v.  Pollard, 
Richards  v.  Miller,  62  111.  417;  Bas-   3  Oh.  Circuit  Ct.  Repte.  r>77. 

kin's  Appeal,  3  Pa.  St.  304.  *  Wilhurn    v.    Wilbum  et    al.,   83 

2  See  §  209.  Ind.  55;  Crocket  v.  Crocket,  2  Phillips 
8Silvers  v.   Association,  94  Mich.  558;  Allen  v.  Hoyt,  5 Met.  834;  Cragin 

39;   53  N.  W.  Rep.  985;    Wilhurn  v.    v.  Cragin,  66  Me.  517;   Jackman  v. 
Wilburn  et  al.,  83  Ind.  55;  contra,   Nelson,  147  Mass.  300. 
26 


402  BENEFICIARIES    IN    MUTUAL    BENEFIT    INSURANCE. 

In  Gosling  v.  Caldwell,1  the  contrary  doctrine  was  held  to 
be  the  law.  A  member  of  a  society  died  leaving  a  widow, 
three  children  and  two  grandchildren,  the  children  of  a  son 
who  died  before  him.  His  certificate  was  payable  to  his  legal 
heirs.  The  court  held  that  the  widow,  the  three  children 
and  the  two  grandchildren  were  entitled  to  the  fund,  and  that 
"  the  chancellor's  decree,  giving  one-fifth  of  the  fund  to  the 
grandchildren,  must  be  affirmed."  Nothing  further  is  said  in 
the  opinion  as  to  the  quantum  which  each  beneficiary  shall 
take  under  such  a  designation,  than  the  language  above 
quoted.2 

In  another  case,  the  syllabus  prepared  by  the  court  states  that 
where  the  heirs  of  a  member  are  made  beneficiaries  the  money 
is  payable  in  the  proportions  indicated  by  the  statutes  of  dis- 
tribution of  the  surplus  personal  property  of  his  estate,  but  no 
question  as  to  the  proportion  which  each  of  the  heirs  should 
take,  was  raised,  by  anything  shown  in  the  opinion.3 

1 69  Tenn.  (1  Lea)  454.  estate  of  the   insured,  to  his  legal 

2  A  statute  of  Tennessee  provides  representatives,  or  to  himself,  is  not 
that  where  a  husband  takes  out  a  stated  in  the  opinion,  but  the  case 
policy  of  insurance  on  his  life,  it  seems  to  have  been  decided  without 
shall  on  his  death  accrue  to  the  ben-  reference  to  this  statute,  both  upon 
efit  of  his  widow  and  heirs,  to  be  this  point  and  the  further  point 
divided  between  them  according  to  that  those  who  take  the  personalty  of 
the  law  of  distribution,  free  from  the  an  intestate,  and  not  those  who  in- 
claims  of  creditors.  Whether  that  herit  his  realty,  are  the  beneficiaries 
statute  has  any  application  to  this  under  a  designation  of  his  "legal 
case,  where  the  policy  is  payable  to  heirs,"  in  a  certificate  of  insurance, 
the  "legal  heirs  "of  the  insured  or  3  Leavitt  v.  Dunn  (N.  J.  Err.  & 
whether  it  is  applicable  only  to  cases  App.),  2S  Atl.  Eep.  590. 
where  the  policy  is  payable  to    the 


CHAPTER  XIV. 

CHANGE   OF  BENEFICIARY. 

§  211.     Rights  of  beneficiary  in  ordinary  contract  of  insurance. 
212,  213.     Beneficiary  has    no    vested   rights    in    contract  of  mutual 
benefit  insurance. 

214.  Where  no  manner  of  changing  beneficiaries  lias  been  agreed  upon. 

215.  Provisions  of  the  charter   concerning  changes  of  beneficiaries. 

216.  A  change  may  not  be  made  when  the  charter  forbids  it. 

217.  Where  terms  of  by-laws  or  certificate  prohibit  a  change. 

218.  219.     When    mode  of  changing  is  prescribed,  it  must  be  substan- 

tially followed. 

220.  Authorities  holding  prescribed  modes  of  changing  beneficiaries 

to  be  mandatory  and  exclusive. 

221.  Authorities  holding  such  provisions  to  be  directory  merely. 

222.  Change  of  beneficiary ;  general  observations. 

223.  When  the  change  is  perfected. 

§  211.  Vested  rights  of  the  beneficiary  in  an  ordinary 
policy  of  insurance. — There  is  an  irreconcilable  conflict  of 
the  authorities  upon  the  question  of  the  rights  and  interest  of 
the  designated  beneficiary  in  an  ordinary  policy  of  life  insur- 
ance, and  as  to  the  extent  to  which  the  insured  may  control 
or  change  the  ultimate  destination  of  the  proceeds  of  such  a 
contract.  The  weight  of  authority  is  in  favor  of  the  doctrine 
that  an  ordinary  life  insurance  policy  is  not  the  property  of 
the  assured,  in  any  sense,  but  that  such  a  contract,  when  once 
executed,  vests  in  the  beneficiary  an  absolute  and  indefeasible 
title  to,  and  the  whole  beneficial  interest  in  the  policy  and  the 
money  to  become  due  under  it.  If  a  person  insures  his  life 
for  the  benefit  of  another  who  is  named  as  the  beneficiary  in 
the  contract  of  insurance,  the  title  of  the  beneficiary  to 
the  proceeds  which  may  accrue  from  it  is  vested  immediately 
upon  the  issuing  of  the  policy,  and  there  is  no  power  in  the 
person  procuring  the  insurance  to  defeat  that  title  by  .assign- 
ing or  surrendering  it.  Although  there  is  no  obligation  upon 
him,  in  the  absence  of  a  covenant  to  that  effect,  to  continue  to 

(403) 


CHANGE    OF    BENEFICIARY. 

premiums  on   such  a  policy,  yet  if  he  does  so,  the  benefit 

all  accrue  to  the  beneficiary.     He  brings  the   contract  into 

existence,  but  it  is  held  to  be  a  contract  between  the  company 

on  the  one  part  and  his  beneficiary  on  the  other,  to  which  he 

is,  in  some  respects,  a  stranger.1 

"Where  the  facts  in  the  particular  case  constitute  a  valid 
executed  gift  of  the  policy,  the  title  is  vested  in  the  bene- 
ficiary as  irrevocably  as  the  title  to  any  other  personal  property 
would  have  been  under  the  same  circumstances.  When  the 
policy  has  been  delivered  to  the  beneficiary,  or  to  some  one 
for  him,12  when  payment  of  some  of  the  premiums  has  been 
made  by  the  beneficiary,3  or  when  the  beneficiary  has  taken 
out  the  insurance  in  the  first  instance  for  his  own  benefit,  it  is 
just  and  reasonable  to  hold  that  his  rights  are  vested,  indefeas- 
ible and  irrevocable.  But  in  some  cases  the  broad  doctrine  is 
laid  clown  that  the  rights  of  the  beneficiary  are  indefeasible, 
even  though  the  person  whose  life  is  insured  pays  the  premium 
and  keeps  possession  of  the  policy.4  In  many  courts,  how- 
ever, this  doctrine  has  found  no  favor,  and  decisions  holding 
that  the  beneficiary  has  only  an  inchoate  interest  in  the  pol- 
icy, and  that  the  ultimate  enjoyment  of  its  proceeds  is  depend- 
ent on  the  will  and  acts  of  the  person  procuring  the  insurance 
on  his  own  life,  are  sustained  by  forcible  arguments.* 

1  2  Phillips  Ins.  p.  626,  at  sections  111.  573;  44  Am.  Repts.  94;  10  111.  App. 
2058,  2059,  2060;  Bliss  on  Life  Insur-  484;  N.  A.  L.  Ins.  Co.  v.  Wilson,  111 
ance,  at  section  318;  Chapin  v.  Fel-  Mass.  542;  Weston  v.  Richardson,  47 
lows,  36  Conn.  132;  Lemon  v.  Ins.  L.  T.  R.  (N.  S.)  514;  Com.  Mutual  v. 
Co.,  38  Conn.  294,  Rawls  v.  Ins.  Co.,  Baldwin,  15  R.  I.  106;  Pace  v.  Pace, 
27  N.  Y.  282;  Stillwell  v.  Ins.  Co.,  72  19  Fla.  438. 

N.  Y.   385-391;   Washington  Life  v.       2 Lemon  v.  Ins  Co.,  supra;  Criten- 
Haney,  10  Kan.  525;  Pence  v.  Make-  den  v.  Ins.  Co.,  supra. 
peace,  65  Ind.  345;  Wilburn  v.  Wil-       3Pilcher  v.  Ins.  Co.,  supra. 
burn,  83  Ind.  55;  Hutson  v.    Merri-       4Ricker  v.    Ins.  Co.,  supra;  Wes- 
field,  51  Ind.  24;   Ricker  v.  Ins.  Co.,  ton  v.  Richardson,  supra;  Glanz  v. 
27  Minn.  195;  6  N.  W.  Rep.  771;  38  Gloeckler,  supra;  Stilwell  v.  Ins.  Co. , 
Am.  Repts.    289;  Allis    v.  Ware,   28  supra;  Fowler  v.  Butterly,  78  N.  Y. 
Minn.  166;  9    N.   W.  Rep.  666;  Pil-  68;  Weisert  v.  Muehl,    81  Ky.    336; 
cher  v.    Ins.  Co.,  33  La.  Ann.  332;  National  Ins.  Co.  v.  Haley,    78  Me. 
Crittenden  v.  Ins.   Co.,  41  Mich.  442;  268;  Putnam  v.  Ins.  Co!,  42  La.  Ann. 
Brockhaus  v.  Kemna,  7  Fed.    Rep.   739;  7  So.  Rep.  602;  Garner  v.  Ins. 
609;  Valley  Mutual  v.  Burke,  12  Ins.    Co.,  110  N.  Y.  266;  Central  Bank  v. 
L.  J.  337;  7  Vir.  L.  J.  173;  Wilmaser  Hume,  128  U.  S.  195. 
v.  Ins.    Co.,  66  Iowa  417;  23  N,  W.       5 Charter  Oak  v.  Brant,  47  Mo.  419; 
Rep.    903;  Glanz    v.    Gloeckler,  104  Ganib  v.  Ins.  Co.,  50  Mo.  44;  Clark 


CHANGE    OF    BENEFICIARY. 


405 


§  212.  The  beneficiary  has  no  vested  rights  in  a  contract 
of  mutual  benefit  insurance.— So  far  as  outward  appearances 
may  indicate,  there  is  little  difference  between  an  ordinary 
policy  of  life  insurance  and  a  contract  of  mutual  benefit  insur- 
ance. But  it  has  been  held  Avith  substantial  unanimity,  when- 
ever the  question  has  arisen,  that,  in  mutual  benefit  societies, 
the  contract  of  insurance  is  between  the  society  and  the  mem- 
ber, that  the  beneficiary  acquires  no  vested  right  in  the  benefit 
fund  which  is  to  accrue  upon  the  death  of  the  member,  until 
the  death  takes  place,  and  that,  during  his  life,  therefore,  the 
member  may  change  his  beneficiary  without  other  limitations 
or  restrictions  than  such  as  are  imposed  by  the  organic  law, 
the  articles  of  incorporation,  the  by-laws,  or  the  certificates  of 
the  society.  An  analytical  statement  of  the  grounds  upon 
which  this  rule  rests  seems  never  to  have  been  made,  and  it  is 


v.  Durand,  12  "Wis.  248:  Kerman  v. 
Howard,  23  Wis.  108;  Foster  v.  Gile, 
50  Wis.  603;  Landrum  v.  Knowles, 
22  N.  J.  Eq.  594;  Bickerton  v. 
Jaques,  28  Hun  119;  12  Abb.  New 
( !ases,  25;  Union  Mutual  v.  Stevens,  19 
Fed.  Rep.  671;  In  Garner  v.  Gerrna- 
nia  Life  Ins.  Company,  13  Daly  255, 
17  Abb.  New  Cases  7,  32  Albany  Law 
Journal  91,  the  common  pleas  court 
of  New  York  says:  "  There  may  be 
many  reasons  why  the  right  to  trans- 
fer such  an  insurance  from  one  bene- 
ficiary to  another,  even  in  the  case  of 
children,  should  exist.  In  the  course 
of  years  this  pecuniary  condition 
may  be  materially  improved  by  mar- 
riage, success  in  business  or  other 
causes,  so  that  it  may  he  more  desir- 
able and  just  that  others  who  have 
claims  upon  the  insurer  and  who  are 
in  greater  need  should  have  the  bene- 
fit of  the  sum  secured  by  the  insur- 
ance instead  of  those  for  whom 
it  was  originally  intended.  When, 
therefore,  the  insurer  keeps  the  pol- 
icy entirely  in  his  own  |x>ssession,  he 
alone  paying  the  premiums,  he  should 
with  the  consent  of  the  insurance 
Company  have  the  same  right  to  re- 
voke, alter  or  change  it  that  he  would 


have  in  respect  to  a  will;  for,  like  the 
provisions  in  a  will,  it  is  a  gift  that  is 
to  take  effect  upon  his  death.  He  may 
of  course  put  an  end  to  it  by  ceasing 
to  pay  the  annual  premium:  but  there 
is  no  reason  why  his  right  should  be 
limited  to  this,  and  that  where  for 
reasons  satisfactory  to  him,  he  desires 
to  transfer  the  benefit  to  another,  he 
should  have  to  lose  all  the  premiums 
he  may  have  paid  over  a  long  course 
of  years,  and  be  compelled  to  pay  for 
a  new  policy  the  increased  premium 
consequent  upon  his  increase  of 
years." 

A  careful  analysis  of  all  the  cases 
cited  in  the  notes  to  the  above  section 
will  show  that  much  of  the  apparent 
conflict  of  authority  arises  more  from 
the  different  facts  in  each  case  than 
from  any  essential  difference  in  prin- 
ciple. In  some  of  the  cases  it  is  held 
that  the  particular  circumstances 
clearly  show  the  creation  of  an  irre- 
vocable trust  in  favor  of  the  benefi- 
ciaries, hut  in  others  the  rule  is 
broadly  laid  down,  irrespective  of 
particular  facts,  that  the  whole  bene- 
ficial interest  vests  in  the  beneficiary 
at  the  moment  the  policy  is  issued. 


406  CHANGE    OF   BENEFICIARY. 

somewhat  difficult  to  see  why  the  insured  should  have  any 
greater  power  to  change  his  beneficiary  under  one  system  of 
insurance  than  under  the  other.  It  has  been  suggested  that 
in  the  nature  of  a  mutual  benefit  society  there  may  be  an  in- 
herent power  to  change  the  beneficiary.  By  this  it  is  probably 
meant  that  the  plan  of  insurance  and  object  of  such  a  society 
may  require  that  the  power  to  change  his  beneficiary  from 
time  to  time  shall  be  reserved  to  each  member.  It  is  the  the- 
ory of  this  plan  that  it  is  "  the  poor  man's  insurance," — that, 
while  the  benefit  fund  which  the  society  will  pay  is  compara- 
tively small,  it  is  given  for  what  it  costs,— that  there  are  no 
profits  and  no  unnecessary  expenses, — that  the  benefit  fund 
shall  be  paid  to  the  family,  dependents  or  other  beneficiaries 
of  the  member  in  such  manner  and  to  such  extent  as  he  may 
desire  it  to  be  paid,  not  only  Avhen  he  takes  out  the  certificate 
but  at  any  time  afterward  when  changes  shall  have  taken 
place  in  his  family,  in  his  condition,  or  in  his  relations  in  life; 
and  it  is  designed  that  changes  in  the  designation  of  those 
whom  he  shall  desire  to  be  the  objects  of  his  provision,'  may 
be  made  by  the  act  of  the  member  at  any  time,  without  other 
expense  or  formality  than  such  as  may  be  prescribed  by  the 
contract  of  insurance. 

It  can  not  properly  be  said,  however,  that  the  power  to 
change  the  beneficiary  is  inherent  in  such  a  society  or  that  it 
is  absolutely  necessary  for  the  carrying  on  of  mutual  benefit 
insurance.  The  law  providing  for  the  incorporation  of  such 
societies  may  prohibit  a  change  in  the  beneficiary  first  agreed 
upon  and  designated,1  or  the  articles  of  incorporation,  by-laws, 
or  certificate  of  membership  may  prohibit  such  a  change.  In 
both  systems  of  insurance  the  rights  and  liabilities  of  the 
parties  are  fixed  by  the  contract,  and  as  a  change  of  the  bene- 
ficiary may  be  prohibited  in  contracts  of  mutual  benefit  insur- 
ance, so  a  power  of  disposition,  or  of  appointment  of  a  new 
beneficiary,  may  be  reserved  by  the  insured  in  an  ordinary 
contract  of  life  insurance.8     In  the  contracts  of  mutual  benefit 

'See§§  136,  172,  173;  Presbyterian       2Greeno  v.  Greeno,   23  Hun  482; 

Fund  v."  Allen,    106  Ind.  595;    7  N.  Hutchings  v.   Miner,   46  N.  Y.  456; 

East.    Rep.  317;    Kentucky  Ins.  Co.  Hopkins  v.  Hopkins,  92  Ky.  324;  17 

v.  Miller,  13  Bush  489;  Van  Bibber  v.  S.  W.  Rep.  864. 
Van  Bibber,  82  Ky.  347. 


CHANGE   OF    BENEFICIARY.  407 

insurance  which  were  first  brought  to  the  attention  of  the 
courts  the  power  to  change  the  beneficiary  was  expressly  given 
to  the  member,  and,  as  the  insured  was  a  member  of  the 
societ}?"  issuing  the  contract,  paid  the  consideration  for  it,  and 
had  by  its  terms  dominion  over  it,  it  was  but  natural  to  hold 
that  the  contract  was  between  the  society  on  the  one  part  and 
the  member  on  the  other.  The  prevalent  dissatisfaction  with 
the  rule  of  ordinary  life  insurance,  which  vests  in  the  bene- 
ficiary the  interest  in  the  proceeds  of  the  contract,  and  the 
manifest  hardship  and  injustice  which  this  rule  gives  rise  to 
in  many  cases,  made  the  courts  eager  to  construe  the  contract 
of  mutual  benefit  insurance  in  this  way;  and  it  may  now  be 
laid  down  as  the  well  settled  doctrine  of  the  law  that,  where 
the  contract  of  mutual  benefit  insurance  does  not  take  away 
the  power  to  change  the  beneficiary,  the  member  has  that 
right,  and  all  that  a  beneficiary  has  during  the  lifetime  of  the 
member,  owing  to  this  right  of  revocation  and  change,  is  a 
mere  expectancy,  dependent  upon  the  will  and  act  of  th< 
insured.1     This  expectancy  is  not  property.2 

§  213.  While  policies  of  life  insurance  in  ordinar}^  compa- 
nies are  construed  to  be  contracts  between  the  company  and 
the  beneficiary,  certificates  of  membership  and  policies  of  in- 
surance in  mutual  benefit  societies  are  held  to  be  contracts 

1  This  subject  is  discussed  with  Union  Mutual  v.  Montgomery,  70 
much  force  in  Conyne  v.  Jones,  51  Mich.  587;  38  N.  W.  Rep.  588;  Catho- 
111.  App.  18;  Masonic  Mutual  v.  Burk-  lie  Association  v.  Priest,  46  Mich. 
hart,  110  Ind.  189;  10  N.  East.  Rep.  429;  9  N.  W.  Rep.  481;  Maryland 
79;  Splawn  v.  Chew,  60  Texas  532;  Society  v.  Clendenin,  44  Md.  429:  22 
Aid  Society  v.  Lewis,  9  Mo.  App.  Am.  Rep.  52;  Sabin  v.  Grand  Lodge, 
412;  Ballou  v.  Gile,  50- Wis.  614;  7  134  N.  Y.  423;  31  N.  East.  Rep.  L087; 
N.  W.  Rep.  561;  Dietrich  v.  Madison  8  N.  Y.  Supp.  185;  Schmidt  v.  Asso- 
Relief,  45  Wis.  84;  Richmond  v.  ciation,  82  Iowa  304;  47  N.  W.  Rep. 
Johnson,  28  Minn.  447;  10  N.  W.  1032;  Masonic  Association  v.  Bunch, 
Rep.     596;    Eastman    v.     Provident    109  Mo.  560;  19  S.  W.  Rep.   25;   Ben- 

Mutual,  20  Cent.  L.  J.  866;  Gentry  v.    ton  v.  Brotherh 1.  146  11).  570. 

Supreme  Lodge,  20  Cent.  L.  J.  393;  2 Masonic  Mutual  v.  Burkhart,  m- 
83  Fed.  Rep.  718;  Presbyterian  Fimd  pro;  Durian  v.  Verein,  7  Daly  168; 
v.  Allen,  106  Ind.  583;  7  N.  East.  Tennessee  Lodge  v.  Ladd,  5  Lea  716; 
Rep.  317:  Hellenberg  v.  Independent  Swift  v.  Association.  96  111.  309; 
Order,  94  N.  Y.  580;  Duvall  v.  Good-  Knights  v.  Watson.  64  X.  II.  517;  15 
son,  79  Ky.  224;  Johnson  v.  Van  Atl.  Rep.  125;  6  N.  Eng.  Rep.  888; 
Epps,  110  111.  551-558:  Lamont  v.  Brown  v.  Grand  Lodge,  80  Iowa  287; 
Grand    Lodge,    31     Fed.    Rep.    177;    45  N.  W.  Rep.  884. 


4:08  CHANGE    OF    BENEFICIARY. 

between  the  society  and  the  member  whose  life  is  insured.  In 
Masonic  Mutual  Benefit  Society  v.  Burkhart,1  the  court  said  : 
"The  right  to  change  the  contract  by  mutual  agreement  of 
the  parties  is  not  derived  from  the  charter  and  by-laws,  but 
may  be  either  directly  or  impliedly  limited  thereby.  Unless 
the  power  to  change  is  thus  limited,  the  beneficiary  named 
in  a  certificate  of  membership  has  no  vested  interest  in  the 
fund  prior  to  the  death  of  the  member."  Referring  to  the  act 
of  March  2,  1877,  Rev.  St.  Ind.  1881,  Sec.  3820,  the  court,  in 
this  case  said :  "  That  act  declares  that  certificates  of  member- 
ship in  charitable  associations  shall  be  regarded  as  contracts 
between  the  members  and  the  association.  Such  certificates 
were  contracts  between  the  members  and  society  before, 
precisely  as  they  were  after,  the  act.  The  statute  was  merely 
declaratory  of  what  the  law  was  in  that  respect  from  the  be- 
ginning. Prior  to  the  statute  it  was  competent,  however,  for 
a  charitable  association,  in  its  constitution  and  by-laws,  to 
limit  or  prohibit  the  right  to  make  changes  in  the  names  of 
beneficiaries  after  they  had  once  been  designated  as  such. 
Since  the  statute  went  into  effect  and  became  incorporated 
into  the  constitutions  of  such  societies,  no  limitation  or  re- 
striction repugnant  to  its  terms  can  be  imposed  upon  the  so- 
ciety and  its  members  by  any  regulation  of  the  association." 
In  Holland,  Guardian,  v.  Taylor  et  al.,3  it  is  said :  "  If  then, 
the  Royal  Arcanum  were  to  be  treated  as  an  ordinary  life  in- 
surance company,  and  the  certificate  as  an  ordinary  life  policy, 
it  would  be  clear  that  *  the  assured  had  no  authority,  by  will 
or  otherwise,  to  change  the  beneficiary,  or  to,  in  any  way,  affect 
her  rights  without  her  consent.  For  many,  and  indeed,  for 
most  purposes,  mutual  benefit  associations  are  insurance  com- 
panies, and  the  certificates  issued  by  them  are  policies  of  life 
insurance,  governed  by  the  rules  of  law  applicable  to  such 
policies.  There  are,  however,  some  essential  differences 
usually  existing  between  the  contracts  evidenced  by  such  cer- 
tificates and  the  ordinary  contract  of  life  insurance.  The 
most  usual  difference  is  the  power  on  the  part  of  the  assured 
in  mutual  benefit  associations  to  change  the  beneficiary.  But, 
as  in  either  case,  the  rights  of  the  beneficiary  are  dependent 

1 110  Ind.  189;  10  N.  East.  Rep.  79;       2  111  Ind.  121;  12  N.  East.  Rep.  116; 
11  N.  East.  Rep.  449.  9  West.  Rep.  60G. 


CHANGE    OF    BENEFICIAKY.  409 

upon  and  fi^ed  by  the  contract  between  the  assured  and  the 
company  or  association,  there  seems  to  be  no  reason  why  the 
assured  should  have  any  greater  power  to  change  the  benefi- 
ciary in  one  case  than  in  the  other,  except  as  that  power  may 
be  inherent  in  the  nature  of  the  association,  or  is  reserved  to 
him  by  the  constitution,  or  by  the  by-laws  of  the  association,  or 
by  the  terms  of  the  certificate."  In  The  Presbyterian  Mutual 
v.  Allen,1  it  is  said :  "  The  weight  of  authority  *  *  is 
in  favor  of  the  general  doctrine  that  beneficiaries  may  be 
changed  in  cases  where  policies,  like  the  one  before  us,  are 
issued  by  such  associations  as  the  present,  and  that,  in  this 
respect,  such  policies  are  not  governed  by  the  general  rule, 
which  governs  ordinary  insurance  contract." a 

A  member  of  a  mutual  benefit  society  who  has  designated  a 
person  to  receive  the  benefit  to  accrue  upon  his  decease,  may 
afterward  designate  another  person.  The  one  first  designated 
can  not  claim  as  under  a  contract.3  In  societies  where  the  cer- 
tificates are  not  contracts  with  the  beneficiaries,  the  laws,  rules 
and  regulations  in  regard  to  beneficiaries  may  be  changed 
during  the  continuance  of  the  certificates,  so  as  to  limit  and 
abridge  their  interests;  and  such  limitations  are  not  subject  to 
objection  as  impairing  vested  rights,  or  the  obligation  of  con- 
tracts.4 Where  the  constitution  of  a  mutual  benefit  society 
provides  that  its  by-laws  may  be  amended  at  any  time,  a  bene- 
ficiary in  a  certificate  of  membership,  having  no  vested  rights 
in  such  certificate  and  not  being  a  party  to  the  contract,  can 
not  complain  that  a  by-law  in  existence  at  the  time  the  certifi- 
cate was  issued,  providing  that  the  member  may  surrender  the 

1 10fi  Ind.  593.  in  it.    It  is  also  held  in  this  case,  that 

;In  Block  et  al.  v.  Valley  Mutual  a  member  of  such  a  society  has  no 

Insurance  Company.  52  Ark.  201.  12  right  to  change  his  beneficiary— no 

8.  W.  Rep.  477.  it  is  held  that,  in  the  power  of   appointment  or  aubstitu- 

absonce  of  a  statute  making  a  dis-  tion — unless  it  is  reserved  in  the  oer- 

tinction  between  a  mutual  insurance  tificate.    by-laws   or   charter,    of  the 

company  and  a  mutual  benefit  soci-  society.     See  also  Johnson  v.    Hall, 

ety,  the  rights  of  a  beneficiary  must  55  Ark.  210;  17  S.  W.  Rep.  B74. 
be  ascertained  by  the  terms  of    the       3Deady  v.  Association,   49  N.   Y. 

contract  of   insurance.  re^ar<i]ess  of  Super.  Ct.  246. 

thecharacter  of  the  society:  and  that,        4Durian  v.  Central  Verein,   7  Daly 

where  a  contract  of  mutual  benefit  168;  Southern   Association    v.   Lau- 

insurance  does  not  otherwise  provide,  denbach,  5  N.  Y.  Sup.  p.  901. 
the  beneficiary  has  a  vested  interest 


410  CHANGE    OF    BENEFICIARY-. 

certificate  and  receive  a  new  one,  with  the  consent  of  the 
beneficiary,  was  amended,  so  as  to  omit  the  consent  of  the 
beneficianr;  nor  can  the  beneficiary  recover  on  the  original 
certificate  after  it  has  been  surrendered  and  a  new  one  issued.1 
A  certificate  stated  that  it  was  a  contract  with  the  member 
alone,  and  not  with  the  beneficiary,  and  that,  during  his'mem- 
bership,  he  might  substitute  another-  beneficiary  by  complying 
with  the  laws  of  the  order  on  that  subject.  The  member  sur- 
rendered this  certificate,  and  took  out  a  new  one,  payable  to 
other  beneficiaries.  The  by-laws  of  the  society,  when  the  first 
certificate  issued,  provided  for  a  change  upon  a  surrender  of 
the  certificate,  "  with  the  consent  of  the  beneficiary  indorsed 
thereon; "  but,  before  the  second  issued,  the  by-laws  were 
amended  by  omitting  the  provision  requiring  such  consent.  It 
was  claimed  that,  as  the  by-law  existing  when  the  certificate 
issued  prohibited  any  change  without  the  consent  of  the  bene- 
ficiary, she  took  an  interest  in  the  certificate  like  an  interest 
in  an  ordinary  life  policy,  which  could  only  be  extinguished 
with  her  consent.  The  court  said  :  "  The  contract  was  solely 
between  her  husband  and  the  society.  It  reserved  the  right 
to  change  the  beneficiary,  if  done  in  accordance  with  the  by- 
laws of  the  order.  The  certificate  bore  notice  of  this  upon  its 
face.  There  was  no  agreement  by  the  society,  nor  any  prom- 
ise by  the  husband,  that  the  laws  should  not  be  altered.  In 
the  nature  of  things  they  were  liable  to  be  altered.  *  *  The 
laws  of  the  order  referred  to  therein  evidently  mean  the  laws 
existing  when  the  change  is  made;  not  those  existing  when 
the  original  certificate  issued." 2  Where  a  provision  of  the 
charter  or  a  by-law  of  the  society  constitutes  part  of  the  con- 
tract of  insurance,  its  alteration  without  the  consent  of  the 
member  insured  does  not  affect  his  contract.9 

§  214:.  When  no  manner  or  mode  of  changing  the  des- 
ignation of  the  beneficiary  has  been  agreed  upon  in  the 

1  Byrne  v.  Casey,  70  Texas  247;  8  supra;  Supreme  Council  v.  Franke, 
S.  W.  Rep.  38;  Supreme  Council  v.  137  111.  118;  27  N.  East.  Rep.  86;  see 
Morrison,  16  R.  1.  468;  17  Atl.  Rep.    §§  136.  137. 

57;  Supreme  Council  v.  Franke,  137  3 Morrison  v.  Odd  Fellows,  etc.,  59 

111.  118;  27  N.  East.  Rep.  86;  Isgrigg  Wis.   162;  Gundlach  v.  Association, 

v.  Schooley,  125  Ind.  94;  25  N.  East.  49  How.    Pr.    190;  Hysir.ger  v.    Su- 

Rep.  151;  Catholic  Knights  v.  Kuhn,  preme  Lodge,  42  Mo.  App.  627;  see 

91  Tenn.  214;  18  S.  W.  Rep.  385.  §§  136,  137. 

2  Supreme    Council    v.    Morrison, 


CHANGE    OF    BENEFICIARY.  411 

contract. — During  his  lifetime  the  member  may  change  the 
designation  of  his  beneficiary,  or  exercise  the  power  of  ap- 
pointment of  a  new  beneficiary,  without  other  limitations  or 
restrictions  than  such  as  are  imposed  by  the  organic  law,  the 
charter,  the  by-laws,  or  the  certificate.1  Where,  therefore,  no 
provision  is  made  in  the  contract  of  insurance  for  changing 
the  designation  of  the  beneficiary,  the  change  may  be  effected 
in  any  manner  which  may  be  agreed  upon  by  the  member  and 
the  society.  It  is  not  necessary,  however,  in  such  a  case  that 
the  society  shall  be  consulted.  It  has  the  right  to  provide 
reasonable  rules  and  regulations  on  the  subject,  but  if  it  does 
not  do  so,  the  member  may  make  such  a  change  as  he  desires,  in 
any  manner  he  may  choose  to  adopt,  provided  he  does  not,  in 
other  respects,  violate  the  contract  of  insurance,  or  the  law  of 
the  land.  Where  a  certificate  was  made  payable  to  the  mem- 
ber himself,  and  no  provision  was  made  in  the  contract  for 
changing  the  beneficiary,  an  indorsement  on  the  certificate, 
showing  that  he  desired  the  benefit  fund  when  collected  to  be 
distributed  among  certain  beneficiaries^  was  held  to  be  a  suffi- 
cient change  in  the  direction  for  payment  of  the  fund.2  Where 
no  mode  of  changing  the  beneficiary  is  specified  in  the  con- 
tract, though  the  practice  is  to  require  a  surrender  of  the  old 
certificate,  and  to  issue  a  new  one  payable  to  the  new  benefici- 
ary, a  paper  signed  by  the  member,  expressing  his  surrender 
of  the  certificate,  directing  payment  to  new  beneficiaries,  and 
mailed  to  the  officers  of  the  association  just  before  his  death, 
is  a  valid  change  of  beneficiary,  and  will  protect  the  associa- 
tion in  making  payment  accordingly.1 

If  there  is  no  provision  of  the  charter,  by-laws,  or  certificate 
of  membership,  governing  the  manner  and  mode  in  which 
such  change  shall  be  made,  a  designation  of  a  new  beneficiary 
may  be  made  by  the  last  will  and  testament  of  the  member. 
When  a  power  is  reserved, and  no  mode  of  executing  it  is  pro- 
vided, it  may  be  executed  by  will.4     When  no  such  provision 

'See  §§166,  173,  212.  262;   Masonic  Association  v.  Bunch, 

2  Masonic  Mutual  v.  Burkhart,  110  109  Mo.  560;  19  S.  W.  Rep.  25. 

Ind.  1*9;  10  X.  East.   Rep.  79;  11  N.  BHirschl  v.  Clink.  81  fowa  ~>00;   47 

East.  Rep.  44;  St.  Clair  Co.  Ben.  Soc.  N.  W.  Rep.  78;  see  Nally  v.  Nally,  74 

v.  Eietsam.97  111.474:  Milm-r  v.  Bow-  C;i.  669;  see  §  228. 

man.  119  Intl.  448;  21  N.  East  Rep.  *See  ?'  288  el  aeq.;  Kaiser  v.  Kai- 

1094;  see  Eppinger  v.  Russell,  20  Fla.  ser,    13   Daly  622;    24  N.  Y.  Weekly 


412  CHANGE    OF    BENEFICIARY. 

is  made,  any  mode  of  making  the  change  or  any  form  of 
words  which  may  be  selected  to  effect  it,  will  be  sufficient,  if 
the  intention  of  the  member  is  clearly  made  known  or  set 
forth.  Where  a  contract  of  insurance  provides  that  the  mem- 
ber may  change  his  beneficiary  at  pleasure,  but  does  not 
specify  how  such  change  shall  be  made,  it  merely  expresses  in 
direct  language  the  construction  which  the  courts  would  give 
to  it  unless  restrictions  were  placed  upon  the  right,  and  the 
member  has  control  and  dominion  over  the  certificate,  subject 
only  to  the  provisions  of  the  charter,  concerning  the  classes 
who  may  become  beneficiaries,  and  to  the  law  of  the  land. 
He  may,  therefore,  designate  a  new  beneficiary  by  assignment 
of  his  certificate; '  and  such  an  assignment  may  be  made  by 
delivery  without  writing,  if  it  sufficiently  appears  that  the 
intention  of  the  member  by  the  delivery  was  to  make  the 
assignee  his  new  beneficiary.2  The  charter,  by-laws,  or  certif- 
icates of  membership  usually  provide,  in  a  definite  manner, 
how  the  changes  of  beneficiaries  shall  be  made,  but  there  is 
no  presumption  that  the  right  of  the  member  to  make  such 
changes  has  in  any  wise  been  abridged.  When,  therefore,  a 
change  of  beneficiaries  is  shown  to  have  been  made  by  the 
member,  it  will  be  presumed,  in  the  absence  of  evidence  to  the 
contrary,  that  no  manner  or  mode  of  making  a  change  is 
specified  in  the  contract,  and  that  the  change  was  properly 
made.  The  burden  is  on  the  first  beneficiary  to  show  that 
the  new  designation  is  invalid.3  On  the  other  hand,  there  is 
no  presumption  that  the  member  has  exercised  his  right  to 
change  the  beneficiary  or  appoint  a  new  one,  and  the  person 
named  in  the  contract  need  not  allege  or  prove  that  no  other 
direction  as  to  the  payment  of  the  fund  had  been  made  by 
him.4 

Dig.  410;  Supreme  Council  v.  Priest,  3  Hicks  v.  Perry,  140  Mass.  580;  5 
46  Mich.  429;  Hannigan  v.  Ingraham,  N.  East.  Rep.  634;  Presbyterian,  etc., 
8  N.  Y.  Supp.  232.  Fund  v.    Allen,    106  Ind.  593;  7  N. 

1  Schmidt  v.  Association,  82  Iowa  East.  Rep.  317;  Masonic  Mutual  v. 
304;  47  N.  W.  Rep.  1032;  Martin  v.  Burkhart,  110  Ind.  189;  10  N.  East. 
Stubbings,  126  111.  387;  18  N.  East.  Rep.  79;  11  N.  East.  Rep.  449;  7 
Rep.   657;    Milner  v.    Bowman,   119   West.  Rep.  527. 

Ind.  448;  21  N.  East.  Rep.  1094;  4  Laudenschlager  v.  Association,  SO 
§  165.  Minn.  131. 

"  a Marcus  v.  Ins.  Co.,  68  N.  Y.  625; 
Brown  v.  Mansur,  64  N.  H.  39;  5  Atl. 
Rep.  768;  see  §  167. 


CHANGE    OF    BENEFICIARY.  413 

§  215.     Provisions  of  the  charter  concerning  changes  of 

beneficiaries. — Where  the  charter  of  a  society  specifies  the 
manner  and  mode  of  designating  or  changing  the  beneficiary, 
and  the  extent  to  which  such  changes  may  be  made,  these  pro- 
visions must  be  strictly  complied  with,  on  the  familiar  ground 
that  a  corporation  is  the  creature  of  its  charter,  and  it  is  not 
within  the  power  of  the  corporation  or  its  members,  or  both, 
to  waive  a  strict  compliance  with  all  such  provisions.1 

Where  its  charter  sets  forth  one  condition  on  which  a  mem- 
ber may  change  the  beneficiary  of  his  insurance,  the  society 
may  not,  by  the  provisions  of  its  by-laws  or  certificates,  add 
other  conditions  to  be  performed  before  the  right  may  be  exer- 
cised. A  charter  gave  the  member  a  right,  with  the  consent  of 
the  society,  to  make  a  change  in  his  beneficiary.  The  by-laws 
provided  that  any  member  desiring  to  change  his  beneficiary 
should  execute  a  certificate  before  a  notary  public  or  other  proper 
officer,  stating  his  name  in  full,  number  of  his  certificate,  name 
and  place  of  residence  of  the  beneficiary  whom  he  desired  to  sub- 
stitute, name  or  names  of  those  whom  he  desired  to  supersede, 
etc.  A  member  executed  a  certificate  which  complied  with 
all  the  specified  requirements  of  the  by-laws,  except  that  it  did 
not  give  the  names  of  the  beneficiaries  to  be  superseded.  It 
was  claimed  that  this  defect  rendered  the  attempted  change  of 
no  effect,  but  the  court  held  that  the  material  question  was 
whether  a  change  of  beneficiaries  had  been  made  by  the  mem- 
ber with  the  consent  of  the  society,  and  if  it  had,  it  was  imma- 
terial whether  or  not  the  requirements  of  the  by-laws  had 
been  complied  with.8 

A  by-law  of  an  incorporated  society,  prescribing  how  the 
members  shall  direct  the  payment  of  the  benefit  fund,  is  not 
inconsistent  with  a  provision  of  the  charter  that  such  fund 
shall  be  paid  "as  the  member  may  direct."  provided  the  rule 
prescribed  by  the  society  is  reasonable  for  that  purpose.3 

§  216.  A  change  of  beneficiaries  may  not  be  made  when 
the  charter  forbids  it. — It  is  a  well  established  principle  that 

1  Head  v.  Ins.  Co.,   2  Cranch  127:  49  Hun  336;    17  N.  Y.  Stat.'  Reporter, 

1  Phillips'  Insurance,  pg.  3;  Leonard  525;  2  X.  Y.  Supp.  7'.». 

v.  Ins.  Co.,  97  Lad.   299;  Bayse  v.  'Coleman  v.  Enights  of  Honor,  18 

Adams,  81  Ky.  368;  see  §  158.  Mo.  Apr.,  189;  see  §  165. 

•  Mayer  v.    Equitable  Association, 


414  CHANGE    OF    BENEFICIARY. 

the  provisions  of  its  charter  govern  both  the  society  and  the 
member,  and  where  its  organic  law,  or  its  charter  founded 
upon  that  law,  prohibits  a  change  in  the  beneficiary  first 
agreed  upon  and  designated,  the  member  can  not  effect  such 
a  change.  This  prohibition  is  as  effective  when  it  is  implied 
from  the  terms  of  the  charter,  as  when  it  is  contained  in  its 
express  language.  Thus,  the  charter  of  a  society  provides : 
"  Upon  the  decease  of  any  member  of  this  association,  the  fund 
to  which  his  family  is  entitled  shall  be  paid  as  may  be  desig- 
nated in  the  application  for  membership;  this  being  changed 
by  death,  or  otherwise  impossible,  it  shall  go :  1st.  To  the 
widow  and  infant  children.  2d.  To  his  mother  and  sister," 
etc.  A  member  in  his  application  directed  that  the  fund 
should  be  paid  to  his  two  sons,  and  subsequently,  with  the 
consent  of  the  society,  but  without  the  consent  of  the  original 
beneficiaries,  he  designated  his  wife  as  the  beneficiary.  The 
court  upon  these  facts  said :  "  We  can  see  no  way  to  avoid 
the  conclusion  that  this  charter  provision  requires  the  benefit 
to  be  paid  to  the  person  named  in  the  application,  or  to  those 
specified,  in  case  of  the  death  of  those  persons  or  of  some  oc- 
currence making  it  impossible  to  pay  to  them.  Not  only  does 
the  charter  in  direct  terms  declare  that  the  benefit  shall  be 
paid  to  the  persons  thus  named,  but  it  also  declares  that  if  it 
becomes  impossible  to  pay  it  to  them,  it  shall  go  in  the  man- 
ner specified  in  the  charter.  The  effect  of  these  provisions  is 
that  the  beneficiaries  named  must  receive  the  money  due  on 
the  policy,  or  it  must  be  disposed  of  as  provided  by  the  charter 
creating  the  association.  The  provision  respecting  the  mode 
of  disposing  of  the  benefit,  deprives  the  insured  and  the  insurer 
of  any  right  to  change  the  contract,  as  it  leaves  only  two  pos- 
sible classes  of  beneficiaries,  those  named  in  the  application 
and  those  specified  in  the  charter,  as  entitled  to  take,  in  case 
the  designation  in  the  application  is  '  changed  by  death  '  or 
becomes  '  otherwise  impossible.'  "  1  Where  the  charter  of  a 
mutual  benefit  society  provides  that  the  fund  due  upon  the 
death  of  a  member  shall  be  paid  to  his  widow  and  children, 
and  only  gives  the  member  the  power  to  direct  by  will  in  what 
proportion  it  shall  be  divided  between  them,  there  can  be  no 

1  Presbyterian  Fund  v.  Allen,  106  Ind.  593;  7  N.  E.  Rep.  317. 


CHANGE    OF    BENEFICIARY.  415 

assignment  of  a  certificate  or  change  in  the  beneficiary,  which 
will  divest  the  widow  and  children  of  their  rights.1 

§  217.  Where  the  provisions  of  the  by-laws  or  certificate 
prohibit  the  change. — The  member  assents  to  the  terms  of 
insurance  as  set  forth  in  the  by-laws  and  in  the  certificate 
issued  to  him.  "Where,  by  such  terms,  the  beneficiaries  who 
shall  take  the  fund,  and  the  order  in  which  they  shall  take  it, 
are  specified,  the  member  has  no  power  of  direction.  In  Mc- 
Clure  v.  Johnson,''  the  benefit  fund  was,  by  the  provisions  of 
a  by-law  of  the  society,  made  payable  to  the  "  wife,  husband, 
children,  mother,  sister,  father  or  brother  of  such  deceased 
member,  and  in  the  order  above  named,"  and  there  was  no 
provision  of  the  contract  of  insurance,  authorizing  any  other 
disposition  of  the  fund.  A  member  left  a  will  by  which  he 
directed  that  the  fund  should  be  paid  to  a  creditor,  but  the 
court  held  that  he  had  no  right  to  change  the  beneficiary,  and 
that,  under  this  by-law,  his  widow  was  entitled  to  it. 

§  218.  When  the  mode  of  changing  the  beneficiary  is 
specified  in  the  contract,  it  must  be  substantially  followed. 
— When  a  mutual  benefit  society  has,  under  the  powers  and 
within  the  limits  of  its  charter,  provided  in  its  by-laws  a  par- 
ticular method  of  changing  a  beneficiary,  or  has  set  forth  in 
its  certificate  a  way  by  which  the  change  may  be  made,  no 
change  of  beneficiary  may  be  made  in  any  other  mode  or 
manner.  The  reason  for  this  rule  is  not  difficult  to  discover. 
It  is  based  upon  the  familiar  maxim  that  the  expression  of 
one  thing  excludes  other  and  different  things.  When  a  so- 
ciety frames  a  set  of  rules  providing  for  the  distribution  of  a 
fund,  and  for  the  rights  of  beneficiaries  and  members,  it 
must  be  assumed  that  it  excludes .  every  other  mode  and 
manner.  Any  other  conclusion  would  lead  to  the  most 
interminable  confusion  in  the  law  applicable  to  the  dis- 
tribution of  the  insurance  money,  and  fritter  away,  in  the 
expenses  of  uncertain  litigation,  funds  created  for  the  ben- 
efit of  widows,  orphans  and  heirs.  But  there  is  still  another 
reason.  It  can  not  be  said  that  a  beneficiary  named  in  a  cert  i  (i- 
cate  has  no  rights  therein  because  he  has  no  vested  rights. 
The  beneficiary  has  a  right  to  the  proceeds  of  the  certificate 

'Ky.  Grangers'   Mut.  Ben.  Soc.  v.        s56  Iowa  620. 
Howe.  9   Ky.  Law   Rep.   (Supr.    Ct.) 
198;  see  SS  158,  165. 


416  CHANGE    OF    BENEFICIARY. 

of  insurance,  subject  to  the  right  of  the  member  to  change  the 
beneficiary  according  to  the  terms  of  the  by-laws  and  regula- 
tions of  the  societ}7,  which  are  a  part  of  the  contract  of  insur- 
ance ;  and  the  right  of  the  beneficiary  to  have  this  contract 
carried  out  in  the  manner  provided  for  is  as  binding  upon  the 
member  as  his  right  to  change  the  beneficiary  is  binding  upon 
the  beneficiary  and  the  society.1  The  power  reserved  to  the 
member  to  change  the  beneficiary  qualifies  the  right  of  the 
beneficiary  in  the  contract.  It  makes  the  interest  of  the  bene- 
ficiary a  mere  expectancy  while  the  power  to  revoke  the  ap- 
pointment continues;  but  this  expectancy  becomes  an  absolute 
right  upon  the  death  of  the  member,  unless  he  has  in  the  man- 
ner prescribed  defeated  it  by  the  affirmative  act  "of  changing 
the  beneficiary. 

It  can  not  truly  be  said  that  the  interests  of  a  beneficiary 
may  be  brought  to  an  end  at  any  time  at  the  will  of  a  member. 
It  requires  more  than  the  will  and  the  intention  of  the  mem- 
ber to  accomplish  the  change  as  may  be  seen  in  the  following 
case  :  A  contract  of  insurance  required  that  any  member 
desiring  to  make  a  direction  as  to  payment  of  the  benefit 
fund,  different  from  that  stated  in  the  certificate,  might  do  so 
in  a  prescribed  form,  to  be  attested  by  the  recorder  of  the 
lodge,  and  reported  to  the  grand  lodge,  upon  the  surrender  of 
the  old  certilicate.  A  member,  believing  himself  to  be  dying, 
and  desiring  to  change  the  designation  from  his  sister  to  his 
wife,  told  a  friend  that  he  wished  this  change  to  be  made,  and 
asked  him  to  have  the  forms  gone  through  with.  Before  any- 
thing was  actually  done  he  died,  and  the  benefit  fund  was 
declared  to  be  the  property  of  his  sister.2  It  requires  some 
affirmative  act  on  the  part  of  the  member  to  change  the  desig- 
nation; his  will  and  intention  will  not  work  the  change.  All 
tendency  to  confusion  and  uncertainty  is  avoided  by  requiring 
this  change  to  be  made  in  conformity  with  the  terms  of  the 
contract. 

'Mellows  v.  Mellows,  61  N.  H.  137;  Men's  Mutual  v.  Brown,  33  Fed.  Rep. 

Coleman  v.  Supreme  Lodge,  18  Mo.  11;  Supreme    Council   v.   Smith,  45 

App.  189;  Holland,  Guardian,  v.Tay-  N.  J.  Eq.  466. 

lor,    111   Ind.   121;   12  N.  East.  Rep.  2  Ireland    v.    Ireland,    25    N.    Y. 

116;  Wendt  v.  Iowa  Legion,  72  Iowa  Weekly  Dig.  335;    42  Hun  212;    see 

682:    34  N.  W.  Rep.  470;   Stephenson  Mellows  v.   Mellows,  supra;   Hall  v. 

v.  Stephenson,    64   Iowa  5U4;   Hotel  Merrill,  47  Minn.  260. 


CHANGE    OF    BENEFICIARY.  -1]  7 

As  has  been  said,  the  power  to  appoint  new  beneficiaries  is 
reserved  to  the  member  of  a  mutual  benefit  society,  unless  it  is 
taken  away  by  the  express  provision  of  the  contract  of  insur- 
ance.1 Where  no  mode  of  executing  this  power  is  provided,  it 
may  be  executed  in  any  manner  which  the  member  may  choose 
to  adopt.2  But  where  the  mode  of  executing  the  power  is  set 
forth  in  the  contract,  it  is  made  a  matter  of  substance,  and, 
by  every  analogy  to  the  law  of  general  or  special  powers,  it 
should  be  complied  with.  The  authorities  on  this  point  are 
conflicting,  but  this  seems  to  be  the  better  rule.3 

This  rule  should  not  be  applied  with  too  much  particularity 
and  exactness  in  matters  of  detail  but  should  be  substantially 
followed.  Thus,  by  the  terms  of  a  contract,  the  fund  was  pay- 
able to  certain  persons  in  the  order  named,  "  unless  otherwise 
ordered  in  writing  by  the  deceased  member,  such  order  to  be 
signed  by  two  witnesses."  By  his  will  the  member  gave  to 
his  mother  certain  property,  "  including  whatsoever  sum  may 
be  due  me  or  my  executor  from  the  Odd  Fellows'  Mutual' 
Relief  Association  of  the  county  of  Strafford,  as  a  member 
thereof."  It  was  claimed  bv  his  mother  that  the  will,  though 
inoperative  as  a  bequest  of  a  fund  which  was  not  the  property 
of  the  testator,  was  an  order  for  the  payment  of  the  fund  to 
her,  within  the  meaning  of  the  contract.  As  it  was  signed  by 
two  witnesses,  referred  to  the  fund  as  the  subject-matter  of  his 
power  of  appointment,  though  by  an  erroneous  description. 
and  declared  that  his  mother  should  be  the  payee  of  a  fund,  of 
which  the  society  was  the  proper  payor,  it  was  held  by  the 
court  that  it  was  a  sufficient  order,  though  not  addressed 
formally  to  the  society,  and  that  the  fund  was  payable  to  the 
mother.* 

1  §  212.  1,  91  X.  Y.  583;  Olmstead  v.  Masonic 

-'14.  Mutual.  37  Kan.  93:  1  1  Pac.  Rep.  449; 

Holland  v.  Taylor.  Ill   Ind.  121;  Maryland    Mutual  v.  Clendenin,   44 

12  K  East  Rep.  116;  Wendtv.  Grand  Md.   433;  Arthur  v.    Association.   29 

Lodge,  72  Iowa  682;  84  N.  W.  Rep.  Oh.  St.  557;  Sanger  v.  Rothschild,  123 

470:  Supreme  Council  v.  Smith.  45N.  N.  Y.  577;  28  N.  East  Rep.  8;  .Jinks  v. 

J.  Eq.  466;  17  Atl.  Rep.  770;  Renk  v.  Banner  Lodge.  139  Pa.  St.  414;  21  Atl. 

Herman  Lodge,  2  Demarest  (X.  Y.)  Rep.  4;  Hall  v.  Association, 47  Minn. 

409;    Supreme    Lodge    v.  Nairn,    60  85;  49  N.  W.  Rep.  524;    Hotel    Mens 

Mich.44;  26N.  W.  Rep.  826;  Stephen-  Mutual  v.  Brown,  88  Fed.   Rep.  11; 

son  v.   Stephenson,  64  Iowa  584;  21  Rollins  v.  McHatton,  16  Colo.  203. 

N.  W.  Rep.  19;  Volman's   Appeal,  92       4Dennett  v.  Kirk,  59  N.  II.  10;  but 

Pa.  St.  50;  Hellenberg  v.  District  No,  see  Mellows  v.  Mellows,  61  N.  II.  187. 

27 


418  CHANGE    OF    BENEFICIARY. 

§  219.  It  seems  clear,  however,  that  this  rule  should  be 
held  to  apply  only  to  those  cases  in  which  the  original  con- 
tract is  in  existence,  and  Avhere  an  attempt  was  made  by  the 
member  to  change  the  beneficiary  of  that  contract.  Where 
the  original  contract  has  been  surrendered  by  the  member  and 
abandoned  by  both  parties  to  it,  the  member  and  the  society, 
it  is  difficult  to  see  what  rights  remain  to  the  beneficiary  un- 
der it.  The  member  and  the  society  have  a  right  to  change 
the  terms  of  the  contract  by  passing  new  by-laws,  or  otherwise, 
without  the  consent  of  the  beneficiary,1  and  it  is  certainly  com- 
petent for  them  to  agree  to  abandon  the  contract  and  substi- 
tute a  new  one  on  substantially  the  same  terms.  They  are  the 
contracting  parties,  and  the  beneficiary  has  no  vested  interest 
until  the  moment  of  the  death  of  the  member  during  the  con- 
tinuance of  the  contract.  Where  the  contract  in  which  he  had 
an  expectant  interest  has  been  abandoned,  and  a  new  one  has 
been  taken  out  in  its  stead,  payable  to  another,  he  has  no  legal 
ground  of  complaint.  There  is  no  longer  a  contract  in  which 
he  is  even  contingently  interested.  In  most  of  the  cases 
where  the  original  certificate  had  been  surrendered,  and  a  new 
one  issued,  payable  to  another  person,  the  court  considered  the 
question  raised  by  the  first  beneficiary,  whether  the  change  of 
beneficiaries  had  been  made  substantially  according  to  the 
terms  provided  in  the  original  contract.  It  would  seem,  how- 
ever, that  the  first  beneficiary,  having  had  no  vested  interest 
in  the  original  contract,  had  no  legal  right  to  urge  that  ques. 
tion,  and  it  would  also  seem  in  those  cases  that  the  real  ques- 
tion for  the  court  to  decide  was  whether  there  had  been  an 
abandonment  of  the  original  contract,  and  not  whether  there 
had  been  an  abandonment  of  one  contract  and  the  substitu- 
tion of  another  in  the  manner  provided  in  the  contract  for  the 
change  of  beneficiaries.  The  member  and  the  society  are  the 
parties  to  a  contract  of  mutual  benefit  insurance,  and  they 
may  during  the  life    of  the   member   agree  upon  a  change  of 

If  the  contract  had  merely  said,  considered  a  valid  order,  but  the  will 
"unless  otherwise  ordered  in  writ-  was  undoubtedly  an  order  "  in  writ- 
ing by  the  member,"  there  might  ing  by  the  deceased  member,"  for  it 
have  been  some  question  as  to  took  effect  immediately  upon  his 
whether  a  will,  taking  effect  only  at  decease, 
the  death  of  the  member,  could  be  '  See  §  136. 


CHANGE    OF    BENEFICIARY.  419 

beneficiaries  in  any  manner  which,  is  satisfactory  to  both  par- 
ties. When  they  have  agreed  upon  a  new  beneficiary,  a  new 
contract  is  in  force  and,  to  the  extent  of  the  modification 
made,  the  old  contract  is  abandoned  and  superseded.' 

When  a  society  has  accepted  the  surrender  of  a  certificate 
from  the  member  and  issued  a  new  one  payable  to  a  new  bene- 
ficiary, or  when  a  society  has  actually  changed  the  beneficiary 
at  the  request  of  the  member,  all  questions  as  to  whether  the 
manner  and  mode  of  changing  beneficiaries  provided  in  the 
contract  have  been  followed  are  concluded  and  absolutely  dis- 
posed of.2  But  where  the  society  and  the  member  did  not, 
during  the  life  of  the  member,  agree  upon  a  change  of  bene- 
ficiaries, where  the  original  contract  is  in  existence,  and  a  right 
under  it  has  accrued  to  some  one,  the  original  beneficiary  will 
be  heard  to  insist  that  he  is  entitled  to  the  proceeds  of  it  because 
the  power  of  appointment  of  another  person  in  his  stead  was 
not  made  by  the  member,  one  of  the  parties  to  it,  according  to 
its  provisions.  To  this  extent  and  no  further  does  the  rule  ap- 
ply that  when  the  mode  of  changing  the  beneficiary  is  specified 
in  the  contract,  it  must  be  substantially  followed.3 

1  See  §§  222a,  223.  But  this  decision  is  against  the  fun- 

4  Titsworth  v.   Titsworth,  40  Kan.  damental  principle  of  mutual  ben.  lit 

571;  20Pac.  Rep.  213;  Barton  v.  As-  insurance,   that  the   contract  is  be- 

sociation,  63  N.  H.  535;  Gladding  v.  tween  the  member  and  the  society, 

Gladding,  3  N.  Y.  Supp.  880;  Lamont  and  that  the  beneficiary  has  no  vested 

v.  Association,  30  Fed.  Rep.  817;  Sim-  interest  in  the  contract  during  the 

coke  v.  Grand  Lodge,  84  Iowa  383;  life  of  the  member.  This  case,  though 

51  N.  W.  Rep.  8;  Bowman  v.  Moore,87  an  early  one,  hasneverbeeii  followed. 

Cal.  306;  25  Pac.  Rep.  409.    In  most  sIn  Supreme  Conclave  v.  Capella, 

of  these  cases  it  was  held  that  there  41   Fed.  Rep.  1,  where  it  was  held 

had   been   a  substantial  compliance  that  the  original  beneficiary  may  not 

with  the  terms  of  the  contract  rela-  avail  himself  of  his  own  misconduct 

tive  to  changing  beneficiaries,   but  to  allege  that    the  insured   did   hot 

the  logic  of  Ifrecasessustainsthedoc-  comply  with  the  requirements  of  the 

trine  as  laid  down  in  the  text.     In  contract,  the  court  treated  at  some 

Coleman  v.  Supreme  Lodge.  18  Mo.  length  the  subject  of  changing  the 

App.  189,  it  was  held  that  the  bene-  beneficiary.    It  was  there  said  that 

ficiary  named  in  the  old   certificate  the  general  rule  that  the  member  is 

was  not  deprived  of  her  rights,   and  bound  to  make   such   change   in  the 

that  the  society  was  not  made  liable  manner  pointed  oul  in  the  contract, 

by  the  issue  of  a  new  certificate  in  is  subject  to  three  exceptions:    First, 

place  of  the  old    n  \  when  the  change  If  the  society  has  waived  a  strict 

of  beneficiaries   had   not    been    made  compliance  with  its  own  rules,  and. 

according  to  the  prescribed  manner,  in  pursuance  of  a  request  of  the  mem- 


420 


CHANGE    OF    BENEFICIARY. 


§  220.  Authorities  holding  provisions  of  the  contract, 
directing  the  mode  of  changing  beneficiaries,  to  he  manda- 
tory and  exclusive.' — If  the  contract  of  a  society  points  out 
the  mode  in  which  a  change  in  the  designation  of  the  bene- 
ficiary  is  to  be  made,  and  that  mode  is  not  followed,  an  at- 


ber  to  have  a  change  made,  has 
issued  a  new  certificate,  the  original 
beneficiary  will  not  be  heard  to  com- 
plain that  the  course  prescribed  by 
the  contract  was  not  pursued:  citing 
Martin  v.  Stubbings,  126  111.  387:  18  N. 
East.  Rep.  657;  Splawn  v.  Chew,  60 
Texas  532;  Manning  v.  A.  O.  U.  W., 
86  Ky.  136;  5  S.  W.  Rep.  385;  Na- 
tional Mutual  v.  Lupoid,  101  Pa.  St. 
Ill;  Brown  v.  Mansur,  64  N.  H.  39; 
5  Atl.  Rep.  768;  Knights  of  Honor  v. 
Watson,  64  N.  H.  517;  15  Atl.  Rep. 
125;  Byrne  v.  Casey,  70  Tex.  247:  8 
S.  W.  Rep.  38;  Titsworth  v  Tits- 
worth,  40  Kan.  571;  20  Pac.  Rep.  213. 
Second.  If  it  be  beyond  the  power  of 
the  member  to  comply  literally  with 
the  contract,  a  court  of  equity  will 
treat  the  change  as  having  been 
legally  made;  citing  Grand  Lodge  v. 
Child,  70  Mich.  163;  38  N.  W.  Rep.  1. 
Third.  If  the  insured  has  pursued 
the  course  pointed  out  by  the  con- 
tract, and  has  done  all  in  his  power 
to  make  the  change,  but  before  the 
new  certificate  is  actually  issued,  he 
dies,  a  court  of  equity  will  treat  such 
certificate  as  having  been  issued,  cit- 
ing National  Association  v.  Kirgin, 
28  Mo.  App.  80;  Mayer  v.  Association, 
2  N.  Y.  Supp.  79;  Supreme  Lodge 
v.  Nairn,  60  Mich.  44;  26  N.  W.  Rep. 
826;  Kepler  v.  Supreme  Lodge,  45 
Hun  274.  Of  the  authorities  cited 
to  sustain  the  first  exception,  Martin 
v.  Stubbings,  National  Mutual  v. 
Lupoid  and  Brown  v.  Mansur,  relate 
to  the  assignment  of  certificates, 
which  is  entirely  different  from 
appointing  a  new  beneficiary;  see 
g§  166,  167,  169,  173,    and   they  are 


treated  of  in  their  proper  place.  In 
Byrne  v.  Casey  the  right  to  make  the 
change,  not  the  manner  in  which  it 
was  made,  was  in  question.  In 
Knights  of  Honor  v.  Watson,  the  con- 
troversy was  as  to  whether  the  new 
beneficiary  was  a  proper  one  under 
the  charter.  Titsworth  v.  Titsworth 
sustains  the  exception.  With  respect 
to  the  other  exceptions,  it  may  be 
said,  with  all  due  deference  to  the 
learned  judge  who  wrote  the  opinion, 
that  the  second  is  too  broadly  stated, 
and  that  they  are  not,  properly  speak- 
ing, exceptions  to  the  general  rule 
laid  down,  but  are  rather  classes  of 
cases  in  which,  upon  a  proper  show- 
ing, a  court  of  equity  will  afford 
relief  against  the  performance  of  im- 
possibilities, when  the  party  seeking 
relief  has  done  all  that  he  can  do  in 
carrying  out  of  the  contract,  or  will 
consider  that  done  which  ought  to 
have  been  done  and  which  the  mov- 
ing party  tried  in  eveiy  way  required 
of  him  to  cause  to  be  done.  No  relief 
could  be  afforded  in  a  common  law 
action  in  either  of  the  cases,  and 
hence,  they  are  rather  matters  of 
equity  jurisdiction  than  exceptions 
to  the  rule;  see  §  223. 

1  In  the  following  cases  the  oi'iginal 
certificate  was  outstanding  at  the 
date  of  the  death  of  the  member  and 
was  not  modified  by  the  consent  of 
the  society,  and  the  question  was 
whether  the  change  of  beneficiaries 
was  made  by  the  member  in  such  a 
way  as  to  cut  off  the  rights  of  the 
beneficiary  named  in  the  original 
contract. 


CHANGE    OF   BENEFICIARY.  421 

tempt  by  a  member  to  make  such  a  change,  and  to  dispose  of 
the  benefit  fund  by  his  last  will  is  wholly  ineffectual.1 

An  association  organized  under  the  laws  of  Kansas  for  the 
purpose  of  giving  aid  to  the  widows,  orphans  and  dependents 
of  deceased  members  issued  a  certificate  of  membership  pay- 
able to  the  member's  wife,  or  her  legal  representatives.  The 
wife  died  in  the  lifetime  of  the  member.  In  the  by-laws  and 
certificate  of  membership  no  provision  was  made  for  a  change 
of  beneficiary,  but  section  76,  chapter  93,  Laws  of  V  \nsas,  1871, 
provides  that  "in  case  any  life  insurance  company  organized 
under  the  laws  of  this  state  shall  have  issued,  or  may  hereafter 
issue,  any  policy  of  insurance  upon  the  life  of  any  person  or 
persons  for  another's  benefit,  and  such  beneficiary  dies  during 
the  lifetime  of  the  person  or  persons  whose  life  or  lives  are 
assured  by  said  insurance  policy  or  policies,  then  it  shall  be 
lawful  for  such  company  to  receive  from  the  person  or  persons 
whose  lives  are  assured  an  affidavit  setting  forth  the  facts  in 
the  case;  and  if  it  shall  appear, from  such  affidavit  that  the 
affiants  have  theretofore  paid  the  annual  premium  on  such 
policy  or  policies,  and  intended  thereby  to  insure  for  the  bene- 
fit of  the  person  or  persons  named  in  such  policy  or  policies 
as  beneficiary,  that  such  person  or  persons  are  dead,  and  that 
said  policy  or  policies  have  not  been  assigned  or  transferred  to 
any  person  or  persons,  and  nominating  or  appointing  some 
other  person  or  persons  as  beneficiary  in  place  of  the  said  de- 
ceased in  said  policy  or  policies  named,  it  shall  then  be  the 
duty  of  said  insurance  company  to  take  up  and  cancel  said 
policies  at  the  request  of  said  assured,  and  issue  in  like  terms 
another  policy  or  policies  upon  the  life  or  lives  of  said  insured 
for  the  benefit  of  the  beneficiary  in  said  affidavit  nominated." 
The  member  after  the  death  of  his  wife  made  no  affidavit  as 
prescribed  in  said  section,  nor  did  he  take  any  steps  to  appoint 
any  person  as  beneficiary  in  place  of  his  deceased  wife,  except 
that  he  undertook  to  dispose  of  the  benefit  arising  from  his 
membership  by  will.     The  supreme  court  of  Kansas  held  that 

1  Renk  v.  Herman  Lodge,  2  Dema-  "Tollman's    Appeal,    02    Pa.    St.  50; 

rest  (N.  Y.)  409;  Hellenberg  v.  I.  O.  B.  Stephenson  v.  Stephenson,  &l  Iowa, 

]•...!)!   X.   V.  r.stc  McCarthy   v.    Su-  534;  21N.  W.    Hep-   l&i    Mellows   v. 

pivme  Lodge,   153  Mass.    314;  26  N.  Mellows,  01    N.  H.  137;  Olmstead  v. 

Kast.    Rep.  86G;  Holland    v.    Taylor,  Society,  37   Kan.  93;  contra,  Splawn 

111   In.l.   121;  12  N.  East.    Rep.  116;  v.  Chew,  60  Texas  532;  see  g  220. 


422  CHANGE    OF    BENEFICIARY. 

the  will  was  ineffectual  to  dispose  of  the  money  payable  on 
account  of  his  death,  or  to  divert  the  same  from  the  legal  rep- 
resentatives of  his  deceased  wife,  and,  in  deciding  the  question, 
said  :  "  This  statute  applies  to  the  defendant  society.  It  was 
enacted  prior  to  the  making  of  the  contract  in  question,  and 
the  parties  must  be  held  to  have  contracted  with  reference  to 
it.  It  prescribes  the  manner  by  which  the  member  may  desig- 
nate a  beneficiary  where  the  one  first  appointed  has  deceased; 
and  it  appears  to  be  the  only  mode  prescribed.  We  think  the 
maxim,  expressib  uniits  est  exclusio  alferius,  applies;  and,  as  the 
prescribed  mode  has  not  been  followed,  no  change  was  actualty 
made,  and  therefore  the  benefit  must  be  paid  according  to  the 
terms  of  the  contract.  The  assured  has  no  interest  in  the 
benefit  resulting  from  his  membership.  In  no  event  was  it 
payable  to  him,  nor  could  it  become  a  part  of  his  estate;  and, 
having  no  interest  in  the  fund,  what  was  there  for  him  to  be- 
queath ? " l 

The  by-laws  of  a  society  provided  that  a  member  who  de- 
sired to  change  the  beneficiary  named  by  him  might  surrender 
his  certificate  duly  indorsed,  and  procure  a  new  certificate  to 
be  issued,  payable  to  the  new  beneficiary.  A  member  just 
before  his  death  gave  the  following  direction  :  "  To  Herman 
Lodge,  etc.,  officers  and  members :  Please  take  notice  that  I 
do  hereby  revoke  the  direction  given  in  my  benefit  certificate 
in  reference,  as  to  whom  the  money  should  after  my  death  be 
paid,  and  I  do  hereby  order  and  direct  that  the  money  be  di- 
vided as  directed  by  me  in  my  last  will  and  testament,  exe- 
cuted by  me,  on  the  17th  of  October,  1882."  This  direction 
was  signed  by  the  member.  The  court  held  that  it  and  his 
last  will  were  inoperative  and  ineffectual,  that  the  change 
could  only  be  made  by  a  compliance  with  the  terms  of  the 
by-laws."  A  contract  provided  that  the  fund  should  goto  cer- 
tain persons  in  the  order  named,  "  unless  otherwise  ordered  in 
writing  by  the  deceased  member,  such  order  to  be  signed  by 
two  witnesses  and  acknowledged  before  a  justice  of  the  peace." 
The  member  left  a  will  by  which  he  attempted  to  dispose  of 

1  Olmstead  v.  Society,  37  Kan.  93;       2  Renk  v.  Herman  Lodge,  2  Dem- 
ref erred  to  and   commented  on   in    arest  (N.  Y.)  409. 
Titsworth  v.  Titsworth,  40  Kan.  571; 
20  Pac.  Rep.  213. 


CHANGE   OF    BKNEFICIAKY.  423 

the  fund.  It  was  signed  by  two  witnesses,  but  was  not  ac- 
knowledged before  a  justice  of  the  peace,  and  it  was  held  to 
be  inoperative.1 

A  certificate  was  payable  to  the  wife,  or  to  the  children  of 
the  member,  or  if  he  left  neither  wife  nor  children,  to  such 
person  "  as  he  may  have  formally  designated  to  his  said  lodge 
prior  to  his  decease."  He  left  neither  wife  nor  children.  By 
his  last  will  he  designated  his  brother  as  the  beneficiary  of  the 
insurance,  but  the  court  held  that  this  was  not  such  a  designa- 
tion as  was  contemplated  by  the  contract  and  that  the  fund 
lapsed  to  the  society.2 

§  220a.  A  member  held  a  certificate  payable  to  his  daugh- 
ter. After  his  second  marriage  he  inserted  immediately 
after  her  name  the  words  "  and  my  wife."  The  by-laws  of 
the  society  provided  :  "A  member  in  good  standing  may 
at  any  time,  surrender  his  relief-fund  certificate,  and  a  new 
certificate  shall  thereafter  be  issued,  payable  to  such  per- 
son or  persons  as  the  member  may  direct."  The  beneficiary 
could  only  be  changed  by  surrendering  the  certificate  to  the 
society  as  provided  in  its  by-laws,  and  his  widow  on  his  death 

1  Mellows  v.  Mellows.  61  N.  H.  131,  tract,  as  mere  matter  of  form,  the 
In  this  case  it  was  said  :  "  The  con-  law  would  not  treat  as  matter  of  sub- 
tract does  not  expressly  allow  the  stance.  But  an  acknowledgment  of 
power  of  appointment  to  be  exercised  a  substitutional  orderbefore  a  jusl  Lee 
by  an  order  executed  in  a  manner  of  the  peace,  might  in  fact  be  a  ma- 
deemed  by  a  court  or  jury,  equiva-  terial  safeguard  for  the  member 
lent  in  utility  to  the  prescribed  form,  making  it,  and  for  the  beneficiaries 
The  object  of  the  association  is  the  named  in  the  rules  and  displaced  by 
payment  of  a  certain  amount  of  life  the  order;  and  the  contract  does  not 
insurance,  after  the  death  of  each  authorize  any  tribunal  to  dispense 
member;  and  it  may  reasonably  be  with  any  proceeding  exacted  by  the 
inferred  that,  for  a  substitutional  ap-  contract,  asa  substantial  security  of 
pointment,  a  written  and  acknowl-  the  rights  of  tbose  parties.  If  ac- 
edged  order  signed  by  two  witnesses  knowledgment  could  be  omitted  as  a 
is  required,  not  merely  as  evidence  useless  form,  there  is  no  ground  of 
satisfactory  to  the  payer,  but  as  such  law  on  which  two  witnesses,  or  a 
a  protection  of  each  member  and  the  signed  writing,  could  be  required, 
payees  named  in  the  contract,  as  the  The  will  is  not  such  an  order  as  the 
law  provides  for  an  owner  of  property  contract  demands."  See  Planter's 
and  for  his  heirs,  in  the  execution  of  Ins.  Co.  v.  Hank.  63  Ala.  585;  Dane 
a  will  or  codicil.  It  might  be  claimed  v.  Young,  61  Me.  l»>a. 
thai  anything  shown  by  competent  "Hellenberg  v.  I.  O.  O.  B.,  94  N.  Y. 
evidence  to  have  been  regarded  by  588;  see  §  287. 
the  parties,  when  they  made  the  con- 


424:  CHANGE    OF    BENEFICIARY. 

acquired  no  title  to  any  part  of  the  benefit  fund  on  account  of 
his  alteration  of  the  certificate.1  Where  a  certificate  provides 
that  upon  the  death  of  the  assured  the  sum  mentioned  will  be 
paid  to  assured's  wife  as  directed  by  the  application,  or  to  such 
person  "  as  he  may  subsequently  direct  by  change  of  benefici- 
ary entered  upon  the  record  of  the  supreme  secretary,"  a  mere 
delivery  of  the  certificate  by  the  assured,  after  the  death  of 
the  wife,  to  a  third  person  for  the  benefit  of  his  son,  is  not  a 
change  of-  beneficiaries.2 

The  by-laws  of  a  society  provided  that  a  member  might 
change  his  beneficiary  by  surrendering  his  certificate,  and  re- 
ceiving a  new  one  payable  according  to  his  directions,  "  said 
surrender  and  directions  to  be  made  on  the  back  of  the  benefit 
certificate  surrendered,  signed  by  the  member  and  attested  by 
the  reporter  under  seal  of  the  lodge."  The  printed  form  on 
the  back  of  a  member's  certificate  was  filled  up  and  signed  by 
him,  making  it  payable  to  another  person  than  the  one  named 
in  the  certificate,  but  it  was  not  attested  by  the  reporter. 
After  the  death  of  the  member,  the  certificate  was  found  thus 
indorsed  among  his  papers  together  with  a  letter  as  follows  : 
"  Port  Huron,  March  25,  18S4.  Keporterof  Integrity  Lodge, 
Knights  of  Honor,  Sir: — I  desire  to  have  the  beneficiary  in 
my  certificate  of  membership  changed  from  Mrs.  F.  F.  Rich- 
ardson to  George  K.  Nairn,  in  trust;  and  in  the  event  of  my 
death,  two  thousand  dollars  to  be  paid  to  him.  Harry  Traver." 
Upon  these  facts,  the  supreme  court  of  Michigan  said  :  "  In 
our  opinion,  Traver  never  surrendered  this  certificate,  and 
never  attempted  to  surrender  it,  within  either  the  letter  or  the 
spirit  of  its  conditions,  and  the  right  of  Mrs.  Richardson  re- 
mains as  originally  provided  for.  *  *  We  dispose  of  the 
case  purely  on  legal  grounds  which  leave  us,  in  our  opinion, 
no  choice  in  the  matter.  The  contract  is  one  which  the  par- 
ties made  on  their  own  conditions,  and  every  one  is  bound  by 
them."  3  A  certificate  of  membership  stipulated  that  the  su- 
preme lodge  would  pay  a  certain  sum  of  money  to  such  person 
or  persons  as  the  member  might  by  will  or  entry  on  the  rec- 

1  Thomas  v.  Thomas,  15  N.  Y.  Supp.  3 Supreme  Lodge  v.  Nairn,  60  Mich. 
15;  131  N.  Y.  205.  44;  26  N.  W.  Rep.  826. 

2  Rollins  v.  McHatton,  16  Colo.  203; 
27  Pac.  Rep.  254. 


CHANGE    OF    BENEFICIARY.  425 

ord  of  the  lodge,  or  on  the  face  of  the  certificate  direct  the 
same  to  be  paid,  etc.  On  the  face  of  the  certificate  the  mem- 
ber directed  that  the  fund  be  paid  to  his  sister.  There  was 
found  in  his  pocket  the  day  before  his  death,  the  following 
writing  signed  by  him:  "To  my  dear  wife:  I  want  you  to 
have  all  my  effects,  everything.  I  give  everything  to  my 
wife."  The  supreme  court  of  Illinois  held  that,  as  the  mem- 
ber had  by  previous  indorsement  disposed  of  the  benefit  fund 
by  directing  to  whom  it  should  be  paid,  in  the  precise  mode 
in  which  the  rules  of  the  lodge  required  the  direction  to  be  made, 
this  writing  addressed  to  the  wife  did  not  operate  to  dispose 
of  the  benefit.1 

By  section  7  of  article  2  of  the  constitution  of  a  society,  it 
is  provided  that  any  member  wishing  to  change  his  beneficiary 
must  procure  a  blank  form  from  the  secretary,  which,  being 
filled  out  and  properly  attested,  shall  be  returned  to  the  secre- 
tary, when  the  necessary  changes  will  be  made  on  its  books. 
A  member  named  his  wife  as  his  beneficiary  in  his  application 
for  membership,  and  her  name  was  so  entered  in  the  books  of 
the  society.  Subsequently  he  executed  a  paper  assigning  his 
certificate  to  one  of  his  creditors  as  collateral  security  for  his 
debt,  but  the  assignment  was  not  made  upon  the  prescribed 
blank,  and  the  societ3r  had  no  notice  of  it  until  after  the  death 
of  the  member,  when  both  the  widow  and  the  assignee  claimed 
the  benefit  fund.  The  court  held  that  the  widow  was  entitled 
to  it,  and  in  its  opinion  said:  "In  the  case  of  Lamont  v. 
Association,2  the  assured  had  during  his  lifetime  changed  his 
beneficiary,  and  the  change  had  been  accepted  by  the  company 
and  entered  on  its  hook's,  and  it  was  held  that  this  transfer 
was  operative,  and  divested  the  rights  of  the  beneficiary 
named  in  tin-  application;  hut  in  that  ease  the  provisions  of 
section  7, article  ■_'.  had  been  substantially  complied  with.  Here 
there  has  been  do  attempt  to  effectuate  a  change  of  beneficiary 
bv  a  compliance  with  the  terms  of  this  section  7.  It  will  he 
noted  that  the  constitutional  provision  for  ;i  change  of  bene- 
ficiary says  it  must  he  done  on  a  prescribed  form  of  blank, 
which  is  given  in  the  by-laws,  which  also  require  the  signature 

•Highland  v.    Highland,    too    111.       8  30  Fed.  Rep.  817. 
300:  see   Elsey  v.   <>.M    Fellows,   142 
Mass.  -2-24:  7  X.  East.  Rep.  Ml. 


42 O  CHANGE    OF    BENEFICIARY. 

to  be  attested  by  an  acknowledgment  before  a  notary  public 
or  justice  of  the  peace;  and  the  application  for  membership 
signed  by  the  assured  in  this  case  stipulates  that  the  receipt  of 
the  parties  to  whom  he  designates  his  death  loss  to  be  paid 
shall  be  a  full  satisfaction  of  all  claims  that  any  of  his  heirs  or 
assigns  may  have  upon  the  association.  Here  is  a  very  cogent 
reason  why,  if  the  beneficiary  is  changed,  it  shall  be  done 
according  to  the  forms  prescribed.  This  mode  of  transferring 
the  fund  or  changing  the  beneficiary  was  undoubtedly  adopted 
in  order  to  secure  certainty  as  to  who  was  entitled  to  the  pay- 
ment of  the  death  loss,  that  the  association  might  know  on  the 
death  of  a  member  whom  they  could  safely  deal  with.  There 
can  be  no  doubt,  I  think,  but  that  a  voluntary  association  of 
this  kind  can  prescribe  the  manner  in  which  its  benefits  may 
be  assigned  or  transferred  and  that  these  regulations  become  a 
part  of  the  contract.  *  *  A  transfer,  to  be  valid,  must  con- 
form to  the  mode  in  which  the  constitution  and  by-laws  of  the 
company  say  it  may  be  changed.  Any  attempt  to  make  such 
a  transfer  should  be  strictly  construed.  The  application  for 
membership  designated  the  wife  of  the  assured  as  his  bene- 
ficiary, and  she  was  so  designated  on  the  books  of  the  associa- 
tion. This  made  a  contract  in  her  favor  on  which  a  suit  could 
have  been  maintained  for  this  death  loss.  The  constitution 
and  by-laws  of  the  association  provided  a  mode  by  which  her 
right  to  this  benefit  fund  could  be  divested;  but,  in  order  to 
so  divest  it,  that  mode  must  be  strictly  followed.  It  was  not 
so  followed,  and  hence  I  am  of  opinion  that  what  was 
done  in  that  direction  was  not  operative  to  divest  her  of  her 
right." ' 

j<  221.  Authorities  holding  such  provisions  of  the  by- 
laws or  certificate  to  be  directory  merely. — As  has  been  said, 
the  authorities  are  not  by  any  means  unanimous  on  this  point, 
and  those  holding  that  such  prescribed  methods  are  directory 
merely  are  here  given.  A  by-law  of  a  society  provided : 
*'  Members  may  at  any  time,  when  in  good  standing,  surrender 
their  certificate,  and  have  a  new  one  issued,  payable  to  such 
beneficiary  or  beneficiaries  dependent  upon  them  as  they 
may  direct,  upon  payment  of  a  certificate  fee  of  fifty  cents." 
A  member  took  out  a  policy  payable  to  his  father  and  mother. 

'Hotel  Men's  Mutual  v.  Brown,  33  Fed.  Rep.  11. 


CHANGE    OF    BENEFICIARY.  427 

Without  attempting  to  make  any  change  of  beneficiaries  as 
provided  in  this  by-law,  he  made  a  will  bequeathing  the  pro- 
ceeds of  his  certificate  to  his  wife  and  children,  and  soon  after- 
ward died.  The  benefit  fund  was  by  agreement  of  parties 
placed  in  bank  by  the  association,  subject  to  the  judgment  of 
the  court  in  the  suit  between  the  father  and  mother,  on  the 
one  hand,  and  the  executors  of  the  will  and  guardians  of  the 
children,  on  the  other  hand.  In  discussing  the  above  by-law 
and  its  effect  on  the  change  of  beneficiaries,  the  court  said  : 
"  A  method  by  which  he  may  accomplish  the  change  to  the 
satisfaction  of  the  order  is  pointed  out  in  the  section  last 
recited,  but  we. do  not  consider  this  as  exclusive  of  all  other 
ways  of  affecting  the  same  object.  The  design  of  this  section 
is  to  protect  the  interests  of  the  corporation.  The  company 
are  entitled  to  know  who  are  the  parties  entitled  to  the  benefit 
money,  and  this  is  an  effectual  and  certain  means  of  giving 
that  information.  But,  like  all  such  provisions  in  the  by-laws 
of  private  corporations,  it  may  be  waived  at  the  option  of  the 
corporation,  being  for  its  benefit  alone.  *  *  As  a  by-law 
of  the  order,  this  provision  entered  into  the  understanding 
between  the  company  and  the  member  effecting  the  insurance, 
and  the  rights  of  interested  parties  are  not  strengthened  by 
the  fact  that  the  same  provision  is  found  in  the  certificate.  It 
is  still  a  condition  for  the  benefit  of  the  company,  to  be 
insisted  upon  or  waived  according  to  their  election.  The  pro- 
vision in  the  by-laws  of  the  Legion  of  Honor  as  to  changing 
the  beneficiaries  of  a  benefit  certificate  is  not  peremptory,  but 
merely  points  out  a  method  which  shall  satisfy  the  company 
as  to  the  parties  entitled  to  receive  the  benefit  money.  The 
suit  is  not  between  the  elaimanl  of  this  money  and  thecorpo- 
ration  by  whom  it  is  to  be  paid,  and  the  latter  does  not  object 
to  the  manner  in  which  the  change  of  beneficiaries  was  made. 
The  exact  case  before  us  seems  to  be  one  of  first  impression; 
we  have  been  furnished  with  no  authorities  precisely  in  point 
by  the  able  and  distinguished  counsel  who  have  represented 
the  respective  parties  to  the  cause,  although  their  briefs  show 
great  research  for  that  purpose,  nor  have  we  been  able  to  find 
any  bearing  upon  the  question.  *  *  We  think  that  as 
between  the  parties  to  this  suit  the  change  of  beneficiaries  was 
fully  effected  by  the  will."1. 

1  Splavra  v.  Chew,  60  Texas,  532. 


428  CHANGE    OF    BENEFICIARY. 

A  member  of  a  society  had  a  certificate  issued,  payable  to 
his  brother,  and  left  it  in  charge  of  the  subordinate  lodge  to 
which  he  belonged.  He  afterward  married,  and  wrote  to  the 
proper  officer :  "  Please  find  inclosed  my  dues  of  lodge  Xo.  2, 
A„  0.  U.  W.,  three  dollars;  and  in  return  please  send  my  policy 
made  out  to  Mrs.  Josie  A.  Manning."  By  a  law  of  the  order 
it  was  provided:  "  Any  member  holding  a  beneficiary  certificate 
desiring  at  any  time  to  make  a  new  direction  as  to  its  pay- 
ment, may  do  so  by  authorizing  such  change  in  writing  on  the 
back  of  his  certificate  in  the  form  prescribed,  attested  by  the 
recorder,  with  the  seal  of  the  lodge  attached,  and  by  the  pay- 
ment to  the  supreme  or  grand  lodge  of  the  sum  of  fifty  cents; 
but  no  change  of  direction  shall  be  valid  or  have  any  binding 
force  or  effect,  until  said  change  shall  have  been  reported  to 
the  supreme  or  grand  recorder,  the  old  certificate,  if  practicable, 
filed  with  him,  and  a  new  beneficiary  certificate  issued  there- 
on." The  member  neglected  to  forward  the  requisite  fee  of 
fifty  cents  for  making  the  change,  and  the  proper  officer  of  the 
lodge  wrote  to  him,  requesting  him  to  furnish  it.  He  died 
without  having  done  so,  and  nothing  was  done  in  the  matter 
prior  to  the  member's  death.  Afterward  the  society  issued  to 
Josie  A.  Manning  a  certificate,  and  paid  her  the  fund  provided 
for.  The  court  said :  "  The  intention  of  the  assured  was  to 
change  the  benefit.  He  so  directed  in  writing,  and  now,  be- 
cause he  did  not  do  so  in  the  formal  manner  prescribed  by  the 
law  for  the  benefit  of  the  order,  it  is  asked  by  a  third  party 
whose  interest  in  the  insurance  was  liable  to  end  at  any  time 
at  the  will  of  the  assured,  that  his  intention  shall  be  defeated, 
although  the  party  for  whose  benefit  the  form  was  prescribed 
has  seen  proper  to  waive  it.  Such  a  rule  would  sacrifice  sub- 
stantial justice  to  mere  form;  it  would  tend  to  defeat  the  benev- 
olent aim  and  purpose  of  the  organization,  and  the  desire  and 
intention  of  the  assured.  Members  of  the  order  may  be  remote 
from  their  lodge;  they  may  not  have  their  certificates  with 
them,  and,  therefore,  be  unable  to  make  the  indorsement  thereon 
as  directed,  or  to  have  it  attested  by  the  recorder  of  their 
lodge,  or  its  seal  attached  thereto.  If  appellee  chooses  to 
waive  these  formalities,  it  does  not  lie  in  the  mouth  of  a  third 
party  to  complain."  l 

'Manning  v.  A.  O.  IT.  W.,  86  Ky.       This  case  in  effect  declares  that 
136;  5  S.  W.  Rep.  385.  the  society  may,  after  the  death  of  a 


CHANGE    OF    BENEFICIARY.  420 

§  222.    Change  of  beneficiary— General   observations. — 

The  society  lias  a  right  to  provide  in  its  contracts  a  certain 
and  uniform  method  of  transacting  its  business,  and,  to 
require  its  members  to  change  their  beneficiaries  in  the  pre- 
scribed manner.  As  we  have  seen1  the  member  and  the  so- 
ciety may  dining  the  life  of  the  member  waive  these  require- 
ments, and  may  agree  upon  a  new  beneficiary  of  the  contract 
in  any  manner  satisfactory  to  both  parties.  It  does  not  fol- 
low, however,  that  after  the  death  of  a  member,  the  society 
may  waive  these  requirements  and  recognize  as  valid  an  at- 
tempted change  of  beneficiaries  made  by  the  member  in  a 
manner  different  from  that  set  forth  in  the  contract.  The 
rights  of  the  parties  are  controlled  by  the  contract  as  it  Avas 
at  the  date  of  the  death  of  the  member,  and,  after  these 
lights  have  attached  by  the  death  of  the  member,  no  con- 
sent, or  act  of  the  society  can  defeat  or  even  affect  them. 
The  beneficiary  of  a  contract  of  insurance,  who  is  affected  by 
an  attempted  change  of  beneficiaries,  may  avail  himself  of  the 
failure  of  the  insured  to  comply  with  the  terms  of  the  con- 
tract  specifying  the  manner  in  which  it  may  be  made,  as  well 
as  the  society  which  issued  the  contract.2  The  payment  of 
the  fund  into  court  for  the  benefit  of  the  person  who  may  be 
declared  to  be  entitled  to  it,  in  no  way  improves  or  prejudices 
the  legal  position  of  either  the  original  or  the  substituted 
beneficiary.  On  the  contrary,  the  party  who  would  succeed 
as  against  the  other  must  make  a  case  which  would  entitle 
him  to  succeed  against  the  society  in  a  suit  on  the  contract.' 

member,  waive  a  want  of  compliance  'Wendt  v.  Iowa  Legion,  72  Iowa 
on  his  part  with  the  terms  of  the  con-  682:  34  N.  W.  Rep.  1T(>:  National 
tract,  even  though  il  refused  to  do  so  Mutual  v.  Lupoid,  101  Pa.  St.  Ill; 
in  his  lifetime,  and  that  by  such  contra,  Splawu  v.  Chew,  60  Texas 
waives  and  the  issue  of  a  newcertifi-  532;  Manning  v,  A.  O.  U.  W.,86  Ky. 
cate  after  his  death,  the  original  186;  S.  W.  Rep.  885;  see  §  221, 
beneficiary  is  deprived  of  his  rights,  3See  £  354;  Wendtv.  Iowa  Legion, 
in  spite  of  the  fact  thai  the  contract  supra;  Mellows  v.  Mellows,  61  N.  H. 
expressly  provides  that  no  direction  137;  Holland  v.  Taylor.  Ill  Iml.  121; 
for  a  change  shall  be  valid  until  a  12  N.  East.  Rep.  118;  Hotel  Men- 
new  benefit  certificate  shall  have  Mutualv. Brown, 38 Fed. Rep.  11:  Ire- 
been  issued.  This  certainly  can  not  land  v.  Ireland.  42  Hun  212:  Supreme 
be  the  law.  See  §  222:  see  §  227,  Lodge  v.  Nairn,  60  Mich.  44;  Stephen- 
note;  see  Hall  v.  Association,  47  son  v.  Stephenson,  64  Iowa,  584;  Noll- 
Minn.  85.  man's  Appeal,  92  Pa.  St.  50;  Ballou 
1  §  219.  v.  Gile,  50   Wis.    610.     In  Titsworth 


430  CHANGE    OF    BENEFICIARY. 

§  222a.  In  some  cases  the  attempted  change  of  the  bene- 
ficiary was  not  called  to  the  notice  of  the  society  until  after 
the  death  of  the  member,  so  that  the  consent  of  the  society  to 
the  change  was  not  an  element  in  the  questions  before  the 
court; '  and,  with  one  exception,2  such  cases  hold  that  the 
change,  to  be  effectual,  must  be  made  in  compliance  with  the 
terms  of  the  certificate,  or  the  by-laws  of  the  society;  that  the 
right  to  object  to  the  method  and  validity  of  the  attempted 
change  is  not  limited  to  the  society,  but  that  the  beneficiary 
named  in  the  certificate  will  be  heard  to  show  that  his  expect- 
ancy was  not  cut  off  by  the  deceased  member  in  the  manner 
prescribed  in  the  contract.  In  one  case  the  attempted  change 
was  called  to  the  notice  of  some  of  the  officers  of  the  society 
and  witnessed  by  them,  but  it  was  held  to  be  ineffectual  for 
want  of  compliance  with  the  express  terms  of  the  contract,  no 
new  agreement  between  the  member  and  the  society  being 
shown.3  In  Hotel  Men's  Mutual  Benefit  Association  v.  Brown, 
supra,  stress  is  laid  on  the  fact  that  the  terms  of  the  con- 
tract provide  that  the  change  must  be  made  in  a  certain  man- 
ner; 4  and  in  Splawn  v.  Chew,  supra,  attention  is  called  to  the 
fact  that  the  provision  of  the  contract  is  that  a  member  may 
change  his  beneficiary  in  the  manner  prescribed.  In  the  latter 
case  it  is  held  that  such  a  provision  is  merely  permissive.5 
In  other  cases8  the  contracts   stipulate  that   "any   member 

v.  Titsworth,  40  Kan.  571,    20  Pac.  District  No.  1,  94  N.  Y.  580;  Splawn 

Rep.  213,  where  a  new  certificate  had  v.   Chew,   60    Texas    532;    Supreme 

been  issued  in  place  of  the  original,  Council  v.  Smith,  45  N.  J.  Eq.  466;  17 

it  was  said  in  the  course  of  the  opin-  Atl.  Rep.  770;  Wendt  v.  Iowa  Legion, 

ion:     "  The     society    has    paid    the  supra;  Mellows  v.  Mellows,  61  N.  H. 

money  into  court,  and  has  been  re-  137;  see  §  219. 

leased  from  all  obligations  respect-  s  Splawn  v.  Chew,  supra. 

ing  it.     This  payment,    however,  is  3  Renk  v.  Herrman  Lodge,  2  Dema- 

an   admission   on   its   part   that  the  rest  409. 

benefit  certificate  was  rightfully  is-  4  See    also     Supreme    Council    v. 

sued,  and  hence  all  contention  as  to  Smith,  supra. 

whether  its  rules  and  regulations  re-  6  See  Titsworth    v.    Titsworth,   40 

specting  these  matters  had  been  com-  Kan.  571;  20  Pac.  Rep.  213,  where 

plied  with  is  out  of  the  case  and  en-  the    reasoning    and    conclusion    of 

tirely  disposed   of."     See  Splawn  v.  Splawn  v.  Chew,  supra,  is  adopted. 

Chew,  60  Texas,  532.  s  Vollman's  Appeal,  92  Pa.  St.  50; 

1  Holland    v.    Taylor,    supra;    Su-  Stephenson  v.  Stephenson,  64  Iowa 

preme  Lodge  v.  Nairn,  supra;  Hotel  534;  Holland  v.  Taylor,  111  Ind.  121; 

Men's  Mutual  v.  Brown,  supra:  Voll.  12  N.    East.   Rep.  116;  Highland   v. 

man's  Appeal,  supra;  Hellenberg  v.  Highland,  109  111.  366. 


CHANGE    OF   BENEFICIARY.  401 

may  change  "  his  beneficiary  in  the  mode  prescribed,  and  while 
the  particular  language  is  not  commented  upon,  it  is  held  that 
the  change  can  not  be  effected  by  any  other  method.  The 
case  of  Coleman  v.  Supreme  Lodge,  supra,  holds  that  the  pro- 
vision that  "a  member  may  change  his  beneficiary"  in  a  pre- 
scribed manner,  is  exclusive  of  all  other  ways,  on  the  familiar 
ground  that  the  expression  of  one  thing  is  necessarily  the  ex- 
clusion of  another  and  a  different  thing. 

§  223.  When  the  change  of  beneficiaries  is  perfected. — 
When  a  member  has  done  all  that  he  is  required  to  do  under 
the  contract  to  effect  a  change  of  beneficiaries,  the  change  will 
be  deemed  complete,  even  though  some  ministerial  acts  of  the 
officers  of  the  society  are  still  to  be  performed.  A  by-law  of 
a  society  provided  that  a  "  member  in  good  standing  may  sur- 
render his  benefit  certificate  and  have  a  new  one  issued  by 
paying  a  fee  of  fifty  cents."  A  member,  having  met  with  a 
serious  accident,  sent  a  friend  to  a  meeting  of  his  lodge  to  have 
a  change  made  in  the  designation  of  the  beneficiary.  This 
friend  attended  the  meeting  of  the  lodge,  surrendered  the  cer- 
tificate to  the  secretaiy  of  the  lodge,  requested  him  to  issue  a 
new  certificate  payable  to  the  member's  wife,  and  paid  the  fee 
of  fifty  cents.  A  mfnute  of  the  transaction  was  made  in  the 
record  of  the  proceedings  of  the  lodge  for  that  evening.  On 
the  following  day  the  member  died.  On  the  day  following  his 
death,  the  secretary  of  the  lodge  surrendered  his  certificate  to 
the  secretary  of  the  supreme  lodge,  which  alone  could  issue 
benefit  certificates,  requested  a  new  certificate  to  be  issued. 
naming  the  member's  wife  as  the  new  beneficiary,  and  paid  the 
fee  of  fifty  cents  therefor.  This  was  done,  and  on  the  same 
day  the  secretary  of  the  lodge  delivered  the  new  certificate  to 
the  new  beneficiary.  When  the  new  certificate  was  issued 
neither  secretary  knew  that  the  member  had  died  on  the  pre- 
ceding day.  In  commenting  upon  these  facts  the  court  said  : 
"  Although  the  laws  of  the  organization  do  not  prescribe  the 
precise  manner  in  which  a  member  of  a  subordinate  association 
shall  proceed  in  order  to  surrender  a  certificate  and  have  a  new 
one  issued  changing  the  beneficiary,  yet  it  sufficiently  appears 
that  a  member  of  the  order,  who  is  a  member  of  a  subordinate 
association,  receives  his  certificate,  settles  his  <\\Wi>  and  surren- 
ders his  certificate  through  his  subordinate  association.     In  fact 


432  CHANGE    OF    BENEFICIARY. 

there  is  nothing  in  the  constitution  and  laws  of  this  organiza- 
tion, which  indicates  that  it  differs  at  all  in  this  respect  from 
numerous  other  organizations  of  this  kind,  with  which  the 
courts  have  to  deal  judicially,  which  is  composed  of  a  supreme 
governing  body,  and  subordinate  associations  or  lodges.  It  is 
not  necessary  to  set  out  the  provisions  of  its  constitution  and 
statutes  in  detail ;  it  is  sufficient  to  say  that  it  is  a  reasonable 
conclusion  from  their  provisions  that  (the  member)  could  only 
surrender  his  benefit  certificate  for  the  purpose  of  having  anew 
one  issued,  changing  his  beneficiary,  through  his  subordinate 
association,  and  that  he  could  not  have  done  it  by  dealing  di- 
rectly with  the  (supreme  lodge).  *  *  He  made  such  a  sur 
render  to  his  association,  paid  the  required  fee,  and  the  associ- 
ation made  a  record  of  it  while  he  was  yet  alive.  In  doing  this 
he  did  all  that  the  laws  of  the  order  required  to  be  done  on  his 
part  in  order  to  have  a  new  certificate,  changing  the  benefi- 
ciary. His  right  to  make  the  change  was  absolute.  There  is 
nothing  in  the  constitution  and  laws  of  the  order  which  indi- 
cates that,  he  being  a  member  in  good  standing,  and  the  per- 
son whom  he  desired  to  be  named  as  beneficiary  in  the  new 
certificate  being  a  person  having  an  insurable  interest  in  his 
life,  either  his  subordinate  association  or*  the  national  associa- 
tion had  any  negative  upon  his  choice,  or  any  right  to  refuse 
his  request.  What  followed  was  therefore  merely  ministerial, 
and  was  not  affected  by  his  death.  His  power  to  make  a 
change  in  the  disposition  of  the  fund  being  absolute,  when  he 
exercised  this  power  as  fully  as  he  could  exercise  it  under 
the  laws  of  the  organization,  the  contingent  right  of  his  wife 
to  the  fund  in  the  event  of  his  death  attached,  and  the  fact  that 
the  certificate  was  issued  after  his  death  is  immaterial,  since 
the  certificate  is  not  the  right  itself,  but  merely  the  evidence 
of  the  right.  It  is  argued  that  the  (subordinate  lodge)  was 
merely  an  agent  of  (the  member)  to  transact  this  business  for 
him  with  the  national  association.  Why  should  we  so  hold  ( 
It  was  not  an  agency  selected  by  him,  nor  had  he  any  choice 
in  the  selection  of  the  agent.  It  is  as  much  in  conformity 
with  legal  analogy  to  say  that  the  (subordinate  lodge)  was  the 
agent  of  the  national  association  as  that  it  was  the  agent  of 
(the  member).  Why  should  we  resort  to  refinements  of  this 
kind  for  the  purpose  of  defeating  a  disposition  of  a  fund,  made 


CHANGE    OF    BENEFICIARY.  433 

in  the  very  article  of  death,  by  the  person  who  alone  had  the 
right  todispose  of  it,  which  disposition,  though  not  a  will,  was 
testamentary  in  its  nature  ?  "  ' 

In  Knights  of  Honor  v.  Nairn.*  it  is  said  :  The  form  of  sur- 
render printed  on  the  back  (of  the  certificate)  conforms  pre- 
cisely to  the  clause  also  inserted  in  the  constitution,  requiring 
every  surrender  and  new  direction  to  be  signed  by  the  member, 
and  attested  by  the  renorter  under  the  lodge  seal,  he  being 
the  officer  into  whose  hands  it  must  be  placed  for  transmission 
to  the  home  office  for  reissue.  Under  this  arrangement,  the 
purpose  is  evident  that  the  corporation  shall  always  be  in 
written  contract  relations  with  a  member  who  is  alive  and  in 
good  standing,  which  will  show  them  the  identity  of  the  bene- 
ficiary to  whom  they  are  liable.  It  is  possible,  and  we  need 
not  consider  under  what  circumstances,  that  when  a  member 
has  executed  and  delivered  to  the  reporter  his  attested  sur- 
render, in  favor  of  a  competent  beneficiary,  his  death  before  a 
new  certificate  is  rendered,  may  leave  his  power  of  designation 
so  far  executed  as  to  enable  a  court  of  equity  to  relieve  against 
the  accident.  But  in  the  present  case  the  facts  show  conclu- 
sively that  (the  member)  did  not  mean  to  have  any  surrender 
made  until  after  his  death." 

An  unmarried  man  took  out  a  policy  of  insurance  on  his 
life,  one  of  the  conditions  of  which  was:  k'  This  policy  is 
issued  and  accepted  upon  the  express  condition  that  the  assured 
may.  with  the  consent  of  the  company,  at  any  time,  assign  it, 
or  before  assignment,  change  the  beneficiaries  therein,  or  make 
any  other  change.'1  He  named  his  sister  as  his  beneficiary, 
and  delivered  the  policy  to  her.  Subsequently  tie  married,  and, 
as  an  inducement  thereto,  he  agreed  that  if  the  woman  would 
marry  him,  she  should  be  made  the  beneficiary  of  the  policy. 
After  the  marriage,  and  when  the  next  semi-annual  premium 
fell  due,  the  assured  paid  it,  on  condition  thai  the  beneficiary 
should  be  changed  from  his  sister  to  his  wife.  The  sister 
had  the  policy,  and  would  not  give  it  up.8  The  agent  was 
uncertain  whether  the  change  could  be  made  without  the  pol- 

1  National  American  Association  v.  78;  Schmidt  v.  Association,  82  Iowa 

Kirgin,28  Mo.  App.  BO;  Fisk  v.  Equi-  804. 

table  Aid  Union.  116  Pa.  St.  (not  re-  '  60  Mich.  44. 

ported):  11  Atl.    Rep  84;  Eirach]  v.  *  See  §226. 
Clark,  si    [owa   200:  47   N.    W.  Rep. 
28 


434  CHANGE    OF    BENEFICIARY. 

icy,  but  promised  to  notify  the  company  and  have  the  change 
made  if  possible.  The  officers  agreed  to  attend  to  the  matter, 
but  overlooked  it.  After  the  death  of  the  assured,  the  com- 
pany filed  a  bill  to  require  the  wife  and  sister  to  interplead,  and 
have  the  question  determined,  as  to  who  was  entitled  to  the 
money.  It  was  decided,  upon  these  facts,  that  whether  such 
change  was  to  be  effected  by  parol  or  in  writing  was  a  matter 
entirely  between  the  assured  and  the  company;  and  if  the 
latter  chose  to  dispense  with  any  of  the  modes  of  effecting  this 
purpose,  this  concerned  no  third  party,  nor  could  the  company 
capriciously  refuse  the  change.  The  marriage  having  been 
consummated  on  the  inducement  of  the  promised  change  oft 
the  beneficiary  under  the  policy,  equity  considers  that  done 
which  ought  to  be  done,  and  will  give  relief  accordingly.1 

A  member  procured  a  certificate  of  insurance,  making  his 
betrothed  his  beneficiary.  He  retained  the  certificate  in  his 
possession,  but  afterward  lost  it.  She  married  another  man, 
and,  within  two  years  thereafter,  he  made  a  statement  in 
writing  of  the  loss  of  the  certificate,  and  applied  to  the  society 
for  a  reissue  of  the  certificate,  making  his  son  the  beneficiary. 
The  society  denied  the  application,  on  the  ground '  that  the 
certificate  was  not  surrendered,  although  lost,  and  that  the 
rules  of  the  society  required  the  change  to  be  indorsed  on  the 
original  certificate,  to  be  attested  by  the  recorder  of  the  sub- 
ordinate lodge,  with  the  seal  of  the  lodge  affixed.  By  the  ad- 
vice of  the  officers  of  the  subordinate  lodge  through  whom  he 
made  the  application,  he  attempted  to  make  the  change  of 
beneficiary  by  giving  a  power  of  attorney  to  another  to  collect 
the  amount  which  should  accrue  under  the  certificate.  After 
his  death,  the  society  conceded  its  liability  upon  the  certificate, 
and  the  court  was  asked,  in  equity  and  good  conscience,  to 
determine  whether  the  original  beneficiary  or  the  son  of  the 
deceased  was  entitled  to  the  fund.  Upon  these  facts  the  court 
said:  "He  *  did  all  that  he  could,  and  all  that  he  was  re- 
quired in  equity  to  do,  to  change  the  donee  in  the  certificate 
named  to  that  of  his  son.  The  rules  of  the  order  allowed  him 
to  do  this,  and  it  was  not  in  the  discretion  of  the  order  to  pre- 
vent it.  It  was  a  right,  under  the  rules  of  the  order,  of  which 
he  could  not  be  deprived  upon  his  complying  with  the  condi- 

1  Nally  v.  Nally,  74  Ga.  669;  see  §  214. 


CHANGE    OF    BENEFICIARY.  435 

tions  prescribed  for  such  action,  and  which  he  performed  so 
far  as  it  was  in  his  power  to  perform,  and  for  these  reasons, 
it  would  be  most  unjust  and  inequitable  for  a  court  to  dis- 
regard such  action,  and  such  intention  of  the  deceased,  before 
he  died.  *  *  All  contracts  are  presumably  made  in  view 
of  the  law  governing  their  construction,  and  the  rules  of  evi- 
dence applicable  when  the  contract  is  sought  to  be  established 
and  applied.  The  law  never  requires  impossibilities,  and  the 
rules  of  the  order  which  require  the  certificate  to  be  sur- 
rendered when  a  change  of  the  beneficiary  was  made  that  it 
might  be  indorsed  upon  the  certificate,  could  only  be  con- 
strued as  requiring  that  to  be  done  when  the  certificate  was 
in  existence.  The  existence  of  the  right  to  share  in  the  bene- 
fits of  the  order,  and  to  direct  who  should  receive  the  fund  in 
case  of  the  death  of  the  member,  was  a  right  vested  in  the 
member  as  soon  as  he  became  entitled  thereto,  and  the  certifi- 
cate was  only  evidence  of  the  existence  of  that  right,  and 
where  that  evidence  was  lost  the  right  remained,  and  its  ex- 
istence could  be  established  by  any  other  competent  evidence, 
and  the  same  is  true  of  the  existence  of  the  change  directed 
by  the  member  of  the  beneficiary.  (The  member)  did  all  he 
could  in  making  the  change,  and  it  should  have  been  allowed 
and  done  by  the  order." ' 

The  only  mode  for  changing  the  beneficiary  of  the  contract 
of  insurance  was  by  directing  such  change  in  writing  on  the 
back  of  the  certificate,  in  a  prescribed  form  attested  by  an 
officer  of  the  society.  A  member,  immediately  before  his  dea  th, 
desiring  to  change  the  beneficiary  of  his  certificate  which 
had  been  lost  or  mislaid  with  out  his  fault,  after  una  vailing  search 

1  Grand  Lodge  v.  Child,  70  Mich,  tor's  right  attaches  when  the  surren- 
163;  38  N.  W.  Rep.  1;  14  West.  Rep.  der  of  the  old  one  is  accepted,  and 
454:  see  Supreme  Conclave  v.  Cap-  the  new  one  is  made  out,  and  no  de- 
pella,  41  Fed.  Rep.  1:  Marsh  v.  Su-  livery  is  necessary  to  enable  it  to  be 
preme  Council,  149  Mass.  512;  21  N.  enforced  against  the  company. 
Bast.  Rep.  1070;  Isgrigg  v.  Schooley,  Bliss  on  Life  Insurance,  202,  206, 
125  Ind.  94;  25  N.  East  Rep.  151;  214,  496,  497,  512.  574;  May  on  In- 
Grand  Lodge  v.  Noll,  90  Mich.  37;  Burance,  61;  Fried  v.  Ins.  Co.,  50  N. 
51  N.  W.  Rep.  268;  Rollins  v.  Mc-  Y.  343;  Cooper  v.  Ins.  Co.,  7  Nev.  116; 
Hatton,  16  Colo.  203.  Kentucky  Mutual  v.  Jinks.  5  Lid.  96; 

When  a  policy  is  given  up  to  have  Crittenden  v.  Ins.  Co.,  41  Mich.  1 1  J: 

another  substituted    to    run  in   the  Schmidt  v.  Association,  82  Iowa  304; 

name  of   a  new  beneficiary,  the  lat-  47  N.  W.  Rep.  1032. 


436  CHANGE    OF    BENEFICIARY. 

for  it,  executed  a  will  whereby  he  bequeathed  the  fund  to  the 
person  whom  he  intended  to  substitute.  On  a  bill  of  inter- 
pleader by  the  society  it  was  held  that  a  court  of  equity  should 
recognize  the  disposition  by  will  as  a  valid  designation  of 
a  new  beneficiary.1  The  decision  was  placed  on  the  ground 
that  as  the  certificate  had  been  lost  or  mislaid  without  the 
fault  of  the  member,  it  was  impossible  for  him  to  name  a  new 
beneficiary  in  the  prescribed  manner,  but  that  a  court  of  equity 
could  and  should  recognize  the  disposition  by  will. 

A  member  held  a  certificate  payable  to  his  widow.  The 
by-laws  of  the  society  provided  that  a  member  desiring  to 
change  his  beneficiary  might  surrender  his  certificate  to  his 
lodge  to  be  forwarded  under  its  seal  to  the  supreme  reporter, 
who  should  cancel  the  old  certificate  and  issue  a  new  one  to 
such  member,  payable  as  directed  by  him;  and  they  further 
required  that  the  member  should  place  his  signature  upon  the 
new  certificate,  accepting  it  upon  the  conditions  named 
therein.  On  March  8,  1887,  the  member  signed  on  the  back 
of  his  original  certificate  a  surrender  thereof,  directed  that  a 
new  one  be  issued,  payable  to  his  sister,  and  sent  it  to  the  re- 
porter of  his  lodge,  who  placed  the  seal  of  the  lodge  upon  it 
and  mailed  it  to  the  supreme  reporter  on  March  10.  A  new 
certificate  was  issued  to  the  sister  on  March  12.  The  member 
had  died  on  March  10.  It  was  held  that  the  substitution  of 
the  sister  had  practically  been  completed  before  the  death  of 
the  member,  and  that,  as  a  member  might  accept  a  new  cer- 
tificate without  formally  writing  his  name  upon  it,  as  required 
by  the  by-laws,  the  issuing  and  acceptance  of  the  new  certifi- 
cate would  relate  back  to  the  time  of  the  surrendering  of  the 
old  one.2 

In  a  letter  to  the  society  a  member  inclosed  his  certificate 
and  requested  that  a  certain  substitution  of  beneficiaries  be 
made,  but  the  society  returned  the  certificate  to  him  with  di- 
rections to  sign  a  formal  revosation  and  appointment  of  bcne- 

1  Grand  Lodge  v.  Noll,  90  Mich.  37;  N.  East.  Eep.  388;  reversing  6  N.  Y. 

51   N.   W.   Rep.    268;    citing  Grand  Supp.  51;  see  Schmidt  v.  Association. 

Lodge  v.  Child,  70  Mich.  163;  38  N.  supra;    Hirschl  v.    Clark,  81   Iowa 

W.  Eep.  1.  200;  47  N.  Y.  Rep.  78. 

2Luhrsv.  Luhrs,  123  N.  Y.  367;  25 


CHANGE    OF    BENEFICIARY.  437 

ficiaries  indorsed  on  it.     He  retained  it  without  further  action, 
and  it  was  held  that  he  had  not  changed  his  beneficiary.1 

The  holder  of  a  certificate  applied  for  a  change  of  his  ben- 
eficiary, surrendered  the  certificate  and  a  new  one  was  issued 
to  him  payable  to  such  persons  as  he  might  name  in  his  will. 
No  new  beneficiaries  were  designated  by  his  will,  and  it  was 
held  that  the  old  contract  was  still  in  force,  the  change  not 
having  been  perfected.2 

'Hallv.  Association,  47  Minn.  85;  -  Grace  v.  N.  W.  Association  (Wis.), 
49  N.  W.  Rep.  524.  58  N.  W.  Rep.  1041. 


CHAPTER  XV. 

CHANGE  OF  BENEFICIARY. 

§  224.     Consent  of  society  to  the  change. 

225.  When  society  is  estopped  to  question  the  change. 

226.  A  beneficiary  may  be  estopped  to  assert  that  a  change  was  not 

properly  made. 

227.  Delivery  or  gift  of  certificate  to  the  beneficiary;  effect  on  the 

right  to  change  beneficiaries. 

228.  Effect  of  an  agreement  between  two  members  that  each  shall  pro- 

cure a  certificate  for  the  benefit  of  the  survivor. 

229.  A  delivery  of  the  certificate  to  the  beneficiary  is  not  necessaiy. 

230.  Who  may  be  designated  as  a  new  beneficiary. 

231.  Does  an  inoperative  change  of  beneficiaries  revoke  the  original 

designation  ? 

232.  Incomplete  designation;  failure  to  exercise  the  power  of  appoint- 

ment. 

233.  Change  of  beneficiary  by  suspended  member  in  application  for 

reinstatement. 

234.  Right  of  a  member  to  change  his  beneficiary  when  the  certificate 

is  payable  to  his  legal  representatives. 
234a.  Fraudulent  change  of  beneficiary. 

§  224.  Consent  of  the  society  to  the  change.— The  rules 
governing  the  consent  of  the  society  to  the  change  of  a  bene- 
ficiary are  the  same  as  those  governing  its  consent  to  an  as- 
signment of  the  contract  of  insurance,  and  thev  need  not  be 
discussed  here  in  detail.1  Where  the  by-laws  of  a  society 
provide  that  no  act  of  the  member,  done  for  the  purpose  of 
changing  his  beneficiary,  shall  entitle  the  beneficiary  to  any 
benefit,  until  such  act  has  been  ratified  and  approved  by  the 
society,  the  refusal  of  the  society,  based  upon  reasonable 
grounds,  to  approve  a  change,  will  bar  a  recovery  by  the  new 
beneficiary."     The   charter  of  a  society  gave   a  member  the 

1  See  §  169.  Hotel  Men  v.  Brown,  33  Fed.  Rep.  1 1 : 

2  Supreme  Council  v.  Smith,  45  N.  Daniels  v.  Pratt,  143  Mass.  216:  Hel- 
J.  Eq.466;  17  Atl.  Rep.  770;  National  lenberg  v.  I.  O.  O.  B.,  94  N.  Y.  583; 
Mutual  v.  Lupoid,  101  Pa.  St.  Ill;  Jinks  v.  Banner  Lodge,  139  Pa.  St. 
Marcus  v.  Ins.  Co.,  68  N.  Y.   625;    414;  21  Atl.  Rep.  4. 

(438) 


CHAXGE    OF    BENEFICIARY.  439 

right,  with  its  consent,  to  make  a  change  in  his  beneficiary, 
A  by-law  provided:  "  No  change  of  beneficiary  shall  be  effect- 
ual unless  the  certificate  thereof  shall  have  been  filed,  ex- 
amined and  found  correct,  and  the  necessary  change  made  in 
the  record  of  the  association  before  the  receipt  of  notice  of 
the  death  of  such  member."  In  certain  litigation  upon  a  cer- 
tificate of  membership  issued  by  it,  the  question  was  as  to 
whether  the  consent  of  the  society  had  been  given  to  a  change 
of  beneficiaries.  It  was  held  that  a  declaration  of  the  secre- 
tary that  "  the  association  has  to  inform  you  that  it  duly  re- 
ceived a  certificate  made  by  C —  S — ,  substituting  your  name 
as  the  beneficiary  of  his  certificate  of  membership  in  this  asso- 
ciation, said  certificate  is  numbered  244,"  was  evidence  against 
the  society  sufficient  to  support  a  finding  that  the  certificate 
of  substitution  had  been  duly  filed,  examined,  found  correct, 
and  the  necessary  change  made  in  the  records,  there  being  no 
evidence  that  these  things  were  not  done  by  the  society.1 

§  225.  When  the  society  is  estopped  to  insist  upon  a 
defector  irregularity  in  a  designation,  disposition  or  sub- 
stitution.— The  question  as  to  the  validity  of  a  change  made 
in  the  designation  of  a  beneficiary  has  been  discussed  with 
reference  to  the  rights  of  the  person  first  designated. 
Another  state  of  facts  may  arise,  and  the  conflict  of  interest 
may  be  between  the  person  in  whose  favor  the  designation 
was  changed,  and  the  society  itself.  Where  the  benefit  fund 
will  lapse  to  the  society  on  failure  of  the  member  to  desig- 
nate a  beneficiary  to  receive  it,  the  officers  of  the  society,  by 
recognizing  and  acquiescing  in  a  change  of  the  beneficiary 
which  is  not  in  conformity  with  the  rules  and  provisions  of 
the  contract,  may  estop  it  from  claiming  the  benefit  fund  on 
account  of  the  invalidity  of  the  change.  A  member  of  a 
mutual  benefit  society  received  a  certificate  payable  to  his  wife, 
whom  he  had  married  many  years  before.  At  the  time  of  the 
marriage  she  had  a  daughter  who  afterward  lived  with  them, 
but  they  had  no  children.  After  the  death  of  the  wife,  which 
occurred  a  few  months  after  the  issuing  of  the  certificate,  the 
member  made  a  will,  by  which  he  left  to  his  step-daughter  all 
his  property.  His  property  consisted  of  his  clothes,  a  little 
furniture  and  the  insurance  in  question.  After  the  will  was 
drawn  he  caused  a  friend  to  write  a  letter  on  the  back  of  it  to 

1  Mayer  v.  Equitable  Association,  17  N.  Y.  St.  Rep.  525;  49  Hun  336. 


44:0  CHANGE    OF   BENEFICIAEY. 

one  of  the  principal  officers  of  the  lodge,  and  delivered  the  will 
to  this  officer.  He  also  told  the  reporter  of  the  lodge  of  the 
contents  of  the  will,  and  of  his  understanding  that  it  con- 
veyed his  insurance  to  his  step-daughter.  After  the  death  of 
the  memher,  the  society  refused  to  pay  the  step-daughter,  who 
had  proved  the  will,  upon  the  ground  that  the  member  had 
not  complied  with  the  requirements  of  an  article  of  its  con- 
stitution providing  that,  "  in  the  event  of  the  death  of  all  the 
beneficiaries  designated  by  the  member,  before  the  decease  of 
such  member,  if  he  shall  make  no  other  disposition  thereof, 
the  benefit  shall  be  paid  to  the  heirs  of  the  deceased  member, 
and  if  no  person  shall  be  entitled  to  receive  such  benefit  by 
the  laws  of  the  order,  it  shall  revert  to  the  widow  and  orphan 
benefit  fund."  So  far  as  appeared  the  member  had  no  rela- 
tions, and  the  society  claimed  that  the  death  benefit  lapsed  to 
the  "  widow  and  orphan  benefit  fund."  Upon  these  facts  the 
court  said  :  "  The  delivery  of  the  will  to  Osborn,  the  proper 
officer  of  the  lodge,  and  the  contemporaneous  statements  made 
by  the  assured  to  Boyer,  the  reporter  of  the  lodge,  and  the  re- 
tention of  the  will  by  said  lodge  without  any  objection  to  the 
form  or  manner  of  designation,  constitute  a  waiver  of  any  de- 
fect or  irregularity  in  such  designation  or  disposition.  If  the 
paper  was  regarded  as  imperfect,  it  was  the  duty  of  the  officers 
of  the  lodge  to  return  it  to  the  assured  with  notice  of  the  de- 
fect." ' 

§  220.  A  beneficiary  may  be  estopped  to  assert  that  the 
change  was  not  perfected  or  properly  made. — No  maxim  of 
the  law  is  better  established  or  founded  upon  more  substantial 
justice  than  that  which  declares  that  no  one  shall  take  advan- 
tage of  his  own  wrong,  and  where  a  member  has  not  been 
able,  through  the  misconduct  of  the  original  beneficiary,  to 
perform  all  the  requirements  of  the  contract,  but  has  done  all 
that  he  could  do  to  designate  another  person  to  take  the  fund, 
the  original  beneficiary  will  not  be  heard  to  insist  that  the 
change  was  not  perfected  or  properly  made.2  Where  a  bene- 
ficiary obtained  possession  of  a  certificate  under  the  agree- 
ment that  she  would  send  it  to  the  society  to  have  it  made 
payable  to  her  and  another,  and  afterward  refused  to  sur- 

1  Kepler  v.  Supreme  Lodge,  K.  of       2  §  223. 
H.,  45  Hun  (N.  Y.)  274. 


CHANGE    OF    BENEFICIARY.  441 

render  it,  it  was  held  that  she  could  not  be  heard  to  insist  that 
a  change  subsequently  made  according  to  the  agreement  was 
invalid  because  the  certificate  had  not  been  surrendered  for 
cancellation  according  to  the  terms  of  the  contract.1  Where 
a  member  makes  a  change  of  beneficiaries  by  will,  and  that 
method  is  not  a  compliance  with  the  contract,  but  the  original 
beneficiary  induces  the  member  to  rely  upon  her  consent  to 
and  acquiescence  in  its  provisions,  and  accepts  benefits  under 
it  after  his  death,  she  is  estopped  to  assert  that  the  change  is 
ineffectual.2  By  the  laws  of  the  corporation,  a  petition  for 
substitution  was  required  to  have  the  seal  of  the  member's 
subordinate  council,  and  to  be  attested  by  the  subordinate 
secretary.  A  member  delivered  his  certificate  and  a  petition 
for  substitution  to  the  subordinate  secretary,  who,  acting  in 
collusion  with  the  original  beneficiary,  the  member's  wife, 
delivered  the  certificate  to  her,  and  forwarded  the  petition 
without  sealing  or  attesting  it.  The  corporation  notwith- 
standing these  omissions,  recognized  the  petition  as  valid,  and 
stood  ready  to  make  the  substitution  if  it  had  received  the 
certificate.  It  was  held  that  the  wife  would  not  be  heard  to 
object  that  there  was  no  valid  substitution.3 

§  227.  Delivery  or  gift  of  the  certificate  to  the  beneficiary; 
effect  on  the  right  to  change  beneficiaries. — The  delivery  of 
the  certificate  to  the  beneficiary  named  therein  has  no  effect 
whatever  upon  the  right  of  the  member  to  change  the  desig- 
nation, as  provided  in  the  contract  of  insurance.4  The  benefit 
certificate  issued  by  a  society  to  a  member,  was  made  payable 
in  the  event  of  her  death,  to  her  husband,  subject  to  change  at 
her  pleasure,  on  presentation  of  the  certificate  together  with 
a  new  application  to  the  supreme  secretary.  Notwithstanding 
the  tact  that  the  certificate  was  delivered  to  the  husband,  and 
the  assessments  thereon  were  paid   by  him,  his  wife  had  the 

1  Supreme  Cone-lave  v.  Cappella,  41  Mo.  560:  10  S.  W.  Rep.  25;   Brown  v. 

Fed.  Rep.  l:  fegriggv.  Schooley,  125  Grand  Lodge,  80  fowa  287;  45N.W. 

Ind.  94;  25  N.  East.  Rep.  151.  Rep.  ss-4:  Byrne  v.  Casey,  70  Texas 

'Hainer  v.    Legion  of  Honor,  78  247;  8S.  W.  Rep.  38;  Splawn v. Chew, 

Iowa  •-H5;  43  N.  W.   Rep.  185;    see  tin  Texas,  534;  Manning  v.  Ancient 

j:  •,>:;;.  Order,  86   Ky.  136;  5  8.  W.  Rep.  385; 

3 Marsh  v.    Supreme  Council,  140  Society    \.    McYay.    92    Pa.   St.    510; 

Mass.  512;  21  N.  East.  Rep.  1070.  see  Nally  v.  Nally,  74  (la.  669. 

4  Masonic  Association  v.  Bunch,  109 


442  CHANGE    OF    BENEFICIAKY. 

right  on  presenting  it  to  the  supreme  secretary  to  apply  for 
and  effect  a  change  in  the  designation  of  the  beneficiary  named 
therein.  When  the  husband  accepted  the  certificate  and  paid 
the  assessments  thereon,  he  knew,  or  ought  to  have  known, 
that  he  held  it  subject  to  the  right  of  his  wife  to  change  the 
beneficiary  to  whom  the  insurance  money  should  be  paid  upon 
her  death.1  A  certificate  upon  the  life  of  a  son  was  made  pay- 
able to  his  mother,  and  delivered  to  her.  His  father  paid  the 
assessments.  Soon  afterward  he  married,  obtained  possession 
of  the  certificate,  and,  without  his  mother's  knowledge  or  con- 
sent, surrendered  it,  and  took  out  another  payable  to  his  wife, 
and  delivered  it  to  her.  In  a  few  months  and  just  before  his 
death  he  surrendered  the  second  certificate,  procured  a  new 
one,  payable  as  the  original  had  been,  to  his  mother,  and  de- 
livered it  into  her  possession.  This  was  done  without  the 
knowledge  or  consent  of  his  wife.  The  certificate  and  by-laws 
of  the  society  gave  the  member  the  right  to  surrender  this  cer- 
tificate and  procure  a  new  one  at  pleasure.  It  was  held  that, 
though  the  certificate  was  delivered  as  a  gift  to  the  wife,  it 
was  subject  to  the  condition  attached  to  the  gift,  that  the  as- 
sured might  at  any  time  surrender  it,  and  name  another  bene- 
ficiary, and  that  the  wife  had  no  right  to  the  fund  upon  her 
husband's  death.2 

A  certificate  was  made  payable  to  the  wife  of  the  member. 
On  a  division  of  property  between  the  two  when  they  were 
divorced  it  was  given  to  her  as  her  own  property,  and  for  two 
years  or  more  she  paid  all  dues  and  assessments  thereon  from 
her  own  earnings.  The  constitution  of  the  society  provided 
that  a  member  might  at  any  time  while  in  good  standing  sur- 
render his  certificate  and  take  a  new  one  payable  as  he  might 
direct,  and  that  the  beneficiary  might  be  changed,  as  the  mem- 
ber might  thereafter  direct,  and  that  such  change  should  be 
entered  in  the  benefit  certificate.  He  filed  with  the  society  an 
affidavit  that  his  divorced  wife  refused  to  surrender  the  certifi- 
cate and  procured  a  new  one  payable  to  his  adult  children  by 
a  former  wife.  It  appeared  that  the  divorced  wife  had  three 
small  children  by  him  who  were  dependent  on  her  for  support. 

1  Fisk  v.  Equitable  Aid  Union  (Pa.  Grand  Lodge,  8  N.  Y.  Supp.  185;  6 
St.),  11  Atl.  Rep.  84.  N.  Y.  St.  Rep.  151;  Sabin  v.  Phinney, 

2  Appeal  of  Beatty,  122  Pa.  St.  428;  134  N.  Y.  422;  31  N.  E.  Rep.  1087;  see 
15  Atl.  Rep.  861;  see  also  Sabin   v.  §  228. 


CHANGE    OF    BENEFICIARY.  4:43 

The  court  held  that  the  divorced  wife  was  entitled,  as  against 
the  adult  children,  to  the  fund,  and  placed  its  decision  on  the 
sole  ground,  that  the  object  of  the  society  was  to  raise  a 
widows'  and  orphans'  fund  and  that  it  would  be  a  perversion 
of  the  fund  to  appropriate  it  to  adult  children,  excluding  the 
widow  and  infant  children.1  A  certificate  was  payable  to  the 
wife  of  a  member,  "  or  to  the  beneficiary  or  beneficiaries  that 
he  may  hereafter  have  a  certificate  made  in  favor  of,  on  sur- 
render of  this  certificate."  When  he  obtained  it  the  member 
handed  it  to  his  wife,  and,  during  the  next  three  or  four  years, 
frequently  remarked  that  he  had  given  her  the  insurance;  that 
he  wanted  to  keep  it  up  for  her  benefit,  and  that  he  thought 
it  was  all  he  would  leave  her.  It  was  kept  in  her  bureau 
drawer,  and  was  taken  by  the  member,  four  years  after  its  issue 
and  surrendered  to  the  society  for  a  new  one  payable  to  other 
beneficiaries.  After  his  death  it  was  contended  that  having 
given  and  delivered  the  certificate  to  his  wife,  he  could  not 
repossess  himself  of  it  without  her  consent.  The  court  said : 
"  Assuming  the  certificate  to  be  the  subject  of  a  valid  gift  from 
a  husband  to  his  wife,  which  we  need  not  decide,  the  question 
remains  whether  a  gift  was  in  fact  made.  Such  a  gift  should 
be  evidenced  by  convincing,  if  not  unmistakable  proof,  and  of 
this  we  are  not  satisfied.  The  remarks  of  the  husband  that  he 
had  given  the  insurance  to  his  wife  were  true  when  they  were 
made,  in  the  sense  that  she  was  then  the  designated  benefici- 
ary; and  they  do  not  necessarily  import  more  than  this. 
After  he  had  made  the  change  he  did  not  so  state.  *  * 
Neither  is  the  possession  of  the  certificate  conclusive.  Posses- 
sion by  the  wife  is  presumed  to  be  possession  by  the  husband 

'Leaf  v.  Leaf,  92  Ky.  166:  17  S.  time    change    the    beneficiary.      In 

W.  Rep.   354.     The   charter  of  the  placing  its  decision  on  the  objects  of 

society  provided  that  the  fund  should  the  society,  the  court  does  violence 

"be  paid  to  his  (the  member's)  family,  to  the   very   words  of  the  charter, 

or  as  he  may  direct."     In  the  state-  The  case  of  Manning  v.  Ancient  Or- 

ment  of  the  tacts  in  the  case  it  does  der,  86  Ky.   136:5  S.  W.   Rep.    :'.s.">. 

not  appear  who  paid  the  assessments  cited  by  the  court,  is  another  one  in 

after  the  new  certificate  was   issued,  winch  the  law  was  badly  strained  in 

The  court  in  the  opinion  lays  great  order  to  give  the  fund  to  the   person 

stress    upon   the  fact   that     the    di-  whom   the  court  thought  ought   to 

vorced    wife    paid     several    assess-  have  it,  no  matter  what  the  facts  and 

incuts,  hut  we  have  Been  that  she  was  the  contract  were, 
hound  to  know  that  he  might  at  any 


444  CHANGE    OF    BENEFICIARY. 

where  they  live  together,  unless  it  appears  to  be  a  possession  to 
the  exclusion  of  the  husband.  (The  husband)  had  access  to 
the  certificate,  and  took  it  without  asking,  thus  showing  by 
his  conduct  that  he,  at  least,  supposed  he  still  had  control  of 
it.     We  do  not  think  a  gift  is  proved."  1 

A  beneficiary  who  pays  the  assessments  on  a  certificate  vol- 
untarily and  gratuitously,  and  not  under  a  contract  with  the 
assured,  acquires  no  vested  interest  therein  as  against  a  per- 
son afterward  named  as  beneficiary  by  the  member.2  A 
member  may  change  this  beneficiary,  though  the  latter  has 
paid  the  assessments  and  has  possession  of  the  certificate.3 
But  it  has  been  held  that  where  a  person  became  a  member  of 
a  society  under  an  agreement  with  the  beneficiary  designated 
in  his  certificate  that  the  beneficiary  should  pay  all  assess- 
ments, and  he  paid  them  under  the  agreement,  the  beneficiary 
acquired  a  vested  interest  in  the  certificate,  and  the  member 
could  not  afterward  make  another  designation.4  A  provision 
of  the  charter  or  of  a  contract  of  the  society,  declaring  that  a 
member  shall  have  a  right  to  make  a  change  of  his  beneficiary 
without  the  consent  of  the  latter,  applies  when  the  original 
designation  is  in  the  nature  of  an  inchoate  or  an  unexecuted 
gift,  and  where  there  is  no  agreement  on  the  part  of  the  mem- 
ber, the  society  and  the  beneficiary  that  no  change  shall  be 
made.  It  does  not  prevent  an  express  contract  between  the 
member,  the  beneficiary  and  the  society  that  a  vested  right 
shall  pass  to  the  beneficiary.5 

§  228.  Effect  of  an  agreement  between  two  members  that 
each  shall  procure  a  certificate  for  the  benefit  of  the  sur- 
vivor.— When  the  contract  of  insurance  provides  that  a  mem- 
ber may  at  any  time  change  the  designation  of  his  beneficiary 
and  make  a  new  direction  for  the  payment  of  the  benefit  fund, 
a  mutual  agreement  between  two  members  that  each  shall  pro- 
cure a  benefit  certificate  for  the  benefit  of  the  survivor  in  case 
of  death,  does  not  take  away  from  either  member  the  power 
of  appointment  of  a  new  beneficiary.     Where   a  husband  and 

'Supreme  Council  v.  Morrison,  16  4Maynard  v.  Vanderwerker,  24  N. 

R.  I.  468;  17  Atl.  Eep.  57;  see  Will-  Y.  Supp.  932. 

iams'  Appeal,  106  Pa.  St.  116.  5  Smith  v.  National  Benefit  Society, 

*  Nix  v.  Donovan,  18  N.  Y.  Supp.435.  123  N.  Y.  85. 

3  Masonic    Association    v.   Bunch, 
109  Mo.  500. 


CHANGE    OF    BENEFICIARY.  445 

wife  become  members  of  a  society  and  agree  that  their  respect- 
ive certificates  shall  be  continued  operative  for  the  benefit  of 
the  survivor,  and  the  by-laws  of  the  society  provide  that  any 
member  holding  a  certificate,  desiring  at  any  time  to  make  a 
new  direction  as  to  its  payment,  may  do  so  in  a  certain  man- 
ner, the  power  of  appointment  of  a  new  beneficiary  still  re- 
sides in  each  member  by  virtue  of  the  contract  with  the  society. 
While  the  exercise  of  this  power  by  the  husband,  for  instance, 
is  in  violation  of  his  agreement  with  his  wife,  it  is  one  of  the 
elements  of  the  agreement  under  which  the  certificate  was  is- 
sued. The  contract  of  insurance  is  executory  on  the  part  of 
the  society  during  the  life  of  the  member,  and  its  liability  to 
pay  the  fund  after  his  death  is  upon  the  last  direction  as  to  its 
payment,  made  in  conformity  with  the  terms  of  the  contract.1 

§  229.  A  delivery  of  the  certificate  to  the  beneficiary  is 
not  necessary. — When  a  member  of  a  society  has  appointed 
a  beneficiary  in  any  of  the  modes  pointed  out  in  the  contract 
of  insurance,  it  is  not  necessar}^  that  the  certificate  of  member- 
ship should  be  delivered  to  the  beneficiary  so  named.  The 
claim  of  the  beneficiary  in  such  a  case  is  not  based  on  a  contract 
with  him,  but  upon  the  appointment  made  by  the  member,  or 
the  direction  given  by  him  for  the  payment  of  the  money. 
Where  the  benefit  certificate  of  a  member  was  made  payable 
at  his  death  to  such  person  as  he  should  direct  on  the  face  of 
the  certificate,  and  the  member  on  the  face  of  the  certificate 
directed  that  the  benefit  fund  should  be  paid  to  a  certain 
person,  and  retained  possession  of  the  certificate  until  his 
death,  it  was  held  that  the  beneficiary  so  designated  took  the 
fund  by  appointment,  and  that  no  delivery  <>l'  the  certificate  in 
the  lifetime  of  the  member  was  necessary." 

^  230.  Who  may  be  designated  as  a  new  beneficiary. — 
It  is  evident  that  where  the  classes  of  persons  who  may  be 
made  beneficiaries  are  limited  by  .the  charter  of  a  society,  no 
one  may  be  designated  as  a  new  beneficiary  who  might  not 
have  been  designated  originally.'*  Where  the  organic  law  of 
a  society,  the  statute  under  which  it  is  incorporated,  is  amended 

1  Sabin  v.  Grand  Lodge,  20  X.  Y.  300;  13  111.  A  pp.  510;  see  Scott  v. 
Weekly  Dig.  309;  6  X.  Y.  St.   Rept'r    Dickson,  108  Pa.  St.  6. 

151.  3g  15S. 

2  Highland   v.  Highland,    109    111. 


440  CHANGE    OF   BENEFICIARY. 

by  an  act  which  does  not  require  formal  adoption  by  existing 
societies,  and  the  powers  of  societies  are  thereby  enlarged  by 
adding  to  the  persons  who  may  become  beneficiaries,  a  mem- 
ber may  with  the  consent  of  the  society  make  a  new  designa- 
tion which  can  only  be  lawfully  made  by  virtue  of  the  later 
statute.  In  such  a  case  it  can  not  be  said  that  the  society  was 
exercising,  and  was  only  authorized  to  exercise,  the  more 
limited  powers  which  it  had  under  the  earlier  statute.1  When 
the  constitution  of  a  society,  which  originally  provided  that  a 
benefit  should  be  paid  only  to  the  widow  or  children  of  a 
deceased  member,  had  been  legally  amended  so  as  to  permit 
the  amount  to  be  paid  to  anyone  designated  by  the  member 
in  his  lifetime,  the  person  so  designated,  and  not  the  widow, 
was  held  to  be  entitled  to  the  fund.2  If  the  contract  does  not 
specify  those  who  may  be  made  the  object  of  a  member's 
bounty,  he  may  designate  any  person  as  his  beneficiary.3 

§  231.  Does  an  inoperative  change  of  the  beneficiary 
revoke  the  original  designation  'i — In  one  case  it  was  held 
that  where  a  member  has  in  conformity  with  the  law  of  the 
society  designated  the  person  to  whom  the  fund  shall  at  his 
death  be  paid,  this  original  designation  will  remain  in  force, 
unless  a  valid  and  legal  change  is  made  in  the  designation  of 
beneficiaries.  An  attempted  change  which  is  for  any  reason 
inoperative,  invalid  or  illegal,  does  not  operate  as  a  revocation 
of  the  original  designation.4  In  one  case  the  society  was  or- 
ganized to  assist  "the  widows,  orphans,  or  other  dependents  of 
deceased  members,"  and  in  certain  events  the  fund  was  paya- 
ble to  their  family  or  heirs.  The  language  of  the  court  was  as 
follows :  "  (The  member)  in  his  application  for  membership, 
designated  his  wife  as  the  person  to  whom  the  benefit  was  to 
be  paid  upon  his  death.  At  a  later  day  he  attempted  to  change 
the  designation  from  his  wife  to  his  mother.  It  is  agreed  that 
his  mother  was  not  living  with  him,  but  was  living  with  her 
husband  in  another  town  and  county.  It  is  not  suggested 
that  she  was  dependent  upon  him.     She  was  not  one  of  those 

'  Marsh  v.  Supreme   Council,    149  ■  Durian  v.  Verein,  7  Daly  168. 

Mass.    511;  21  N.    East.    Rep.    1070;  3  See  §§  159  et  seq. 

(  atholic  Order  of  Foresters  v.  Calla-  4  Elsey  v.  Odd  Fellows,  142  Mass. 

ban,  146  Mass.  393;  16  N.  East.  Rep.  224;  7  N.   East.    Rep.  844;    Grace  v. 

14;  see  §  162.  Association  (Wis.),  58  N.  W.  Rep.  1041 


CHANGE    OF    BEXEFICTAKV.  -±4:7 

who  would  be  his  heirs,  and  she  was  not  one  of  the  members 
of  the  decedent's  family  within  the  meaning  of  the  by-law. 
To  give  the  word  'family'  the  broad  construction  claimed  by 
the  respondent  would  make  the  by-law  overreach  the  scope  of 
the  statute,  and  violate  its  spirit  and  purpose.  It  follows  that 
the  attempted  designation  to  the  mother  of  the  deceased  mem- 
ber was  illegal  and  invalid,  and  we  need  not  discuss  the 
question  whether  it  was  sufficiently  assented  to  by  the  directors 
of  the  defendant  corporation.  As  the  assignment  to  the 
mother  was  invalid,  we  think  the  original  designation  to  the 
wife  remained  in  force.  We  can  see  no  reason  to  suppose  that 
the  later  assignment  was  intended  to  operate  as  a  revocation 
of  the  designation  to  the  wife,  unless  it  took  effect  as  a  desig- 
nation to  the  mother.  The  scheme  of  the  by-laws  is  that  the 
beneficiary  shall  be  designated  by  the  member  in  his  applica- 
tion for  membership,  and  the  benefit  shall  be  paid  to  such 
beneficiary,  unless  there  is  a  subsequent  legal  assignment. 
They  make  no  provision  for  revoking  a  designation  except  by 
a  legal  assignment  to  some  other  person,  assented  to  by  the 
directors.  We  can  not  presume  that  the  deceased  member  in- 
tended his  assignment  to  operate  as  a  revocation  of  the  previ- 
ous designation  in  the  event  of  its  invalidity  as  an  assignment 
to  his  mother,  and  there  is  no  assent  of  the  directors  to  any 
such  revocation." ' 

In  another  case  a  member  changed  the  beneficiaries  of  his 
certificate  and  made  two  hundred  and  fifty  dollars  of  it  pay- 
able to  a  Mrs.  Lamprey,  who  was  not  a  member  of  his  family 
nor  in  any  way  related  to  or  dependent  upon  him.  At  the 
time  this  change  was  made  the  constitution  of  the  society 
authorized  the  issuing  of  a  certificate  to  a  member  payable 
"to  some  member  or  members  of  his  family,  or  person  or  per- 
sons dependent  on  him,  as  he  may  direct  or  designate  by 
name."  The  society  did  not  know,  at  the  time  of  issuing 
the  new  certificate  according  to  the  direction  of  the  member, 
that  Mrs.  Lamprey  was  neither  a  member  of  his  family,  aor 
dependent  upon  him.  After  his  death  the  beneficiaries  of  the 
first  certificate  claimed  that  the  change  of  beneficiaries  was 
inoperative  as  to  the  two  hundred  and    fifty  dollars, made  pay- 

1  See  Hicks  v.  Perry,  140  Mass.  580;  5    Court,  46  N.  J.  Eq.  102;  18  Atl.  Rep. 
N.  East.  Rep.  634;  Brittou  v.  Supreme    675;  Park  v.  Welch,  33  111.  App.  188. 


4JrS  CHANGE    OF    BEXEFICIAKY. 

able  to  Mrs.  Lamprey,  and  they  sought  to  have  that  sum 
divided  among  them.  Upon  this  question  the  court  said : 
"  Whether  Mrs.  Lamprey  is  entitled  to  the  benefit  of  $250,  pay- 
able to  her  by  the  last  certificate,  is  a  question  in  which  the  other 
defendants  have  no  interest.  In  no  event  are  they  entitled 
to  it.  They  can  receive  no  more  than  the  sums  made  payable  to 
them  respectively.  If  the  direction  by  which  the  sum  of  $250 
was  made  pa}rable  to  Mrs.  Lamprey  was  invalid  because  she 
was  neither  a  member  of  F.  P.  Watson's  family  nor  dependent 
upon  him,  the  benefit  to  that  extent  lapses,  if  the  society  so 
elects,  for  want  of  a  valid  exercise  of  the  power  of  direction. 
But  the  question  whether  it  was  valid  can  be  raised  by  no  one 
but  the  society,  and  it  does  not  raise  it.1  By  paying  the 
money  into  court  it  has  expressed  its  willingness  to  have  paid 
it  to  Mrs.  Lamprey.  *  *  As  the  society  promised  to  pay 
her  that  sum,  and  does  not  object  to  paying  it,  and  no  other 
person  has  the  right  to  object,  nor  any  interest  in  the  money, 
she  is  entitled  to  a  decree  that  it  be  paid  to  her." 2  In  the  ab- 
sence of  a  valid  designation,  or  a  valid  change  of  beneficiaries, 
the  proceeds  of  the  contract  will  be  disposed  of  as  if  no  des- 
ignation or  change  had  been  made.3 

§  232.  Incomplete  designation;  failure  to  exercise  the 
power  of  appointment. — The  by-laws  of  a  society  provided 
that  the  members  might  designate  the  person  or  persons  to 
whom  payment  of  the  benefit  fund  should  be  made  after 
death,  but  made  no  prevision  as  to  the  manner  in  which  such 
designation  should  be  made.  On  the  back  of  its  certifi- 
cates,  however,  it  placed  a  blank  form  in  print,  with  the  places 

1  Citing  Brown  v.  Mansur,  64  N.  the  attempted  assignment  of  it  was 
H.  39;  5  Atl.  Rep.  768.  void,  it  still  stood  in  force.     But  in 

2  Knights  of  Honor  v.  Watson,  64  these  cases,  the  original  certificates 
N.  H.  517;  15  Atl.  Rep.  125;  6  N.  had  been  surrendered  and  canceled, 
Eng.  Rep.  888;  see  Luhrs  v.  Supreme  and  new  ones  had  been  issued  in  their 
Lodge,  7  N.  Y.  Supp.  487;  Burns  v.  stead.  The  fact  that  the  beneficiaries 
Grand  Lodge,  153  Mass.  173;  26  N.  under  the  new  contracts  were  not 
East.  Rep.  443.  It  will  be  observed  entitled  to  take  under  the  laws  of  the 
that  there  is  an  essential  difference  society,  did  not  revive  the  old  con- 
between  these  cases  and  Elsey  v.  Odd   tracts. 

Fellows,  etc.,    supra.     In  the  latter  3  Parke  v.  Welch,  33  111.  App.  188; 

case  the  original  certificate  payable  Burns  v.  Grand  Lodge,  153  Mass.  173; 

to  the  beneficiary  named  in   it  was  26  N.  East.  Rep.  443;  Arthars  v.  Baud, 

outstanding,  and  it  was  held  that  if  8  Pa.  Co.  Repts,  67. 


CIIANGE    OF   BENEFICIARY.  440 

designated  for  the  signature  of  the  member  holding  the  cer- 
tificate, and  for  the  name  of  a  witness.  The  court  held 
that  the  placing  of  this  printed  form  in  blank  upon  the 
back  of  the  certificate  pointed  out  the  manner  in  which  such 
designation  should  be  made,  and  that  where  the  member 
had  merely  filled  up  the  blank  in  the  form  for  designa- 
tion with  the  names  of  his  three  daughters,  and  had  not 
signed  such  designation,  nor  had  a  witness  sign  it,  the  desig- 
nation was  incomplete  and  invalid.1  An  association,  organ- 
ized for  "  furnishing  relief  and  assistance  by  means  of  mutual 
agreement  and  pa^mient  of  funds,"  and  "  to  secure  to  depend- 
ent and  loved  ones  assistance  and  relief  at  the  death  of 
a  member,"  issued  to  a  member  a  certificate  providing  "  that 
a  sum  not  exceeding  $2,000  will  be  paid  by  the  association  as 
a  benefit,  upon  due  notice  of  his  death  and  the  surrender  of 
this  certificate,  to  such  person  or  persons  as  he  may,  by  entry 
on  the  record  book  of  the  association,  or  on  the  face  of  this 
certificate,  direct  the  same  to  be  paid,  provided  he  is  in  good 
standing  when  he  dies."  The  member  died  in  good  standing 
without  designating  a  beneficiary  as  provided,  or  in  any  other 
manner.  Upon  these  facts,  the  court  held  that  the  fund  lapse*  1 
to  the  society,  and  said  :  "  The  defendant  promised  to  pay  the 
benefit  to  no  one  save  such  person  or  persons  as  (the  deceased 
member)  should  direct  by  entry  upon  the  certificate  or  record 
book  of  the  association.  By  the  contract  he  had  the  mere 
power  of  appointing  the  person  who  should  receive  the  bene- 
fit. He  was  bound  by  the  rules  of  the  association,  and  could  not 
change  the  beneficiary  in  a  way  not  in  conformity  with  them. 
*  *  He  had  no  personal  interest  in  his  membership,  and  his 
personal  representative,  as  such,  can  take  no  interest  in  it  after 
his  death."  *  A  certificate  of  membership  in  a  mutual  benefit 
society  may  be  reformed,  after  the  death  of  the  member,  by 
inserting  the  name  of  a  beneficiary,  when  it  appears  that  the 
secretary  of  the  association  and  the  assured  both  understood 
at  the  time  of  the  application,  that  the  proposed  name  should 
be  entered   upon   the   record   without   further   direction,  and 

1  Elliott  v.  Whedber,  '.»i  N.  C.  115;  *  Eastman  v.  Provident  Mutual  Re- 
see  Hannifin  v.  Ingraham,  8  N.  Y.  lief  Ass*n,  f..'  \.  II.  565;  80  C.  L. 
Supp.  282;  Bellenberg  v.  I.  O.  O.  B.,  Jour.  266;  see  Worley  v.  N.  \Y.  }];,- 
94  N.  Y.  588.  sonic  Aid,  10  Fed.  Rep.  227 

29 


450  CHANGE    OF    BENEFICIAKr. 

where  it  was  the  duty  of  the  secretary  to  enter  and  keep  a 
record  of  the  names  of  the  beneficiaries.1  And  a  certificate 
providing  for  the  payment  of  the  benefit  to  such  person  as  the 
member  "  may,  by  entry  on  the  record-book  of  the  associa- 
tion, or  on  the  face  of  this  certificate,  direct  the  same  to 
be  paid,"  will  be  reformed  in  equity,  to  conform  to  the  inten- 
tion of  the  parties  where  the  making  of  the  entry  is  omitted, 
owing  to  the  fact  that  both  parties  believed  it  would  be  payable 
to  the  member's  administrator  on  his  death,  although  this  is  a 
mistake  of  law  and  not  of  fact.3 

§  233.  Change  of  beneficiary  by  suspended  member  on 
application  for  reinstatement. — In  Davidson  v.  Supreme 
Lodge,3  it  was  held  that,  under  the  provisions  of  the  constitu- 
tion of  the  endowment  rank,  a  member  of  the  endowment 
rank  of  the  Knights  of  Pythias,  who  becomes  suspended  by 
reason  of  the  suspension  of  the  section  to  which  he  belongs, 
may  in  his  application  for  reinstatement  designate  a  new  ben- 
eficiary, and  the  lodge  in  re-admitting  him,  acquiesces  in  the 
change,  notwithstanding  he  receives  and  countersigns  a 
"clearance  card"  referring  to  him  as  the  holder  of  his  old  cer- 
tificate which,  by  its  terms,  had  become  null  and  void  by  rea- 
son of  the  suspension  of  his  section.  In  this  case  the  contract 
provided  that  any  member  desiring  to  change  his  bene- 
ficiary might  make  a  written  request  for  that  purpose  to 
his  section,  and  if  it  were  approved  it  should  be  certified 
by  the  section  to  the  supreme  master  of  the  exchequer,  who 
should  issue  a  new  certificate  in  accordance  with  it.  The  de- 
cision is  placed  upon  the  ground  that,  as  the  section  to 
which  the  member  had  belonged  was  not  in  existence  be- 
cause of  its  suspension,  the  provisions  for  making  the  change 
did  not  apply,  and,  as  the  member  was  for  the  same  reason 
out  of  the  order,  he  was  re-admitted  on  the  same  footing 
as  any  new  member,  and  had  the  right  to  name  a  new  ben- 
eficial in  his  application  for  membership. 

§  234.     Right   of  a  member  to    change  his  beneficiary 

1  Scott  v.  Provident  Mutual.  63  N.  v.  Courser,  64  N.  H.  506;  15  Atl.  Rep. 
H.  556;  4  Atl.  Rep.  792;  2  N.  Eng.  129;  Stedwell  v.  Anderson,  21  Conn. 
Rep.  286;  see  Globe  Ins.  Co.  v.  Boyle,  139;  Bank  v.  Ins.  Co.,  31  Conn.  517, 
21  Ohio  St.  119;  see  §  152.  529. 

2  Eastman  v.  Provident  Mutual,  62       322  Mo.  App.  263. 
N.  H.  555;  IS  Atl.  Rep.  745;  McCone 


CHANGE    OF    BENEFICIARY.  451 

when  the  certificate  is  payable  to  his  legal  representa- 
tives.— Where  a  certificate  of  membership  is  made  payable  to 
the  "  legal  representatives  "  of  the  member,  or  to  his  "  exec- 
utors and  administrators,"  as  may  be  done  under  the  char- 
ters of  some  societies,  he  may,  with  the  consent  of  the  society 
surrender  the  same  and  take  out  a  new  certificate  payable  to 
a  third  person.1 

§  234a.  Fraudulent  change  of  beneficiary. — One  who 
has  an  insurable  interest  in  the  life  of  the  member  has  a  right 
to  use  all  the  persuasive  arts  at  his  command  to  induce  the 
member  to  make  him  the  beneficiary  of  his  certificate.2  When 
the  beneficiary  has  no  vested  right  in  the  benefit  fund,  a 
change  of  beneficiary  works  no  fraud  upon  him  or  those 
claiming  through  or  under  him.  A  member  of  a  mutual 
benefit  society,  knowing  that  the  beneficiary  named  in  his  cer- 
tificate is  greatly  indebted,  may  in  accordance  with  the  laws 
and  regulations  of  the  society  change  the  beneficiary  entirely, 
or  make  the  fund  payable  to  a  person  in  trust  for  the  original 
beneficiary,  and  such  change  will  constitute  no  fraud  upon  the 
original  beneficiary  or  his  creditors.3  Where  the  member  has 
a  right  to  change  his  beneficiary,  the  original  beneficiary  will 
not  be  heard  to  assert  that  the  member  procured  the  certifi- 
cate from  him  by  fraud  and  then  designated  another  in  his 
place.  Having  no  vested  right  in  the  contract,  he  has  no  legal 
ground  of  complaint  for  such  a  fraud.4 

1  Johnson  v.  Van  Epps,  110  111.  551;  3  Sehillinger  v.  Boes,  85  Ky.  357;  3 

Petty  v.  AVilson,  4  L.  R.    Ch.    Ap-  S.  W.  Rep.  427. 

peals,  574;  Harding  v.  Littlehale,  150  4  Brown  v.  Grand  Lodge,  80  Iowa 

Mass.  KM).  287. 

I'mgree  v.  Jones,  80  111.  181. 


CHAPTER  XVI. 

DESIGNATION  AND  CHANGE  OF  BENEFICIARY. 

§  235.     Designation  by  last  will;  where  the  right  to  devise  the  fund  is 
conveyed  by  charter. 

236.  Designation  of  a  new  beneficiary  or  disposition  of  the  fund  by  last 

will. 

237.  "When  a  designation  or  disposition  by  will  is  invalid. 

238.  239.     When  a  disposition  by  will  is  invalid;  power  of  appointment 

reserved  to  the  member. 

240.  Where  the  designation  of  a  beneficiary  is  the  execution  of  a  power 

of  appointment,  it  must  be  made  according  to  the  laws  of  the 
society. 

241.  Designation  by  special  appointment. 

242.  A  designation  is  not  necessarily  revoked  by  the  subsequent  mar- 

riage of  the  member. 

243.  When  the  power  to  designate  or  change  the  beneficiary  is  ex- 

hausted. 

244.  Time  within  which  the  power  of  appointment  or  the  right  to  des- 

ignate a  new  beneficiary  may  be  exercised. 

§  235.  Designation  by  last  will;  where  the  right  to  de- 
vise the  fund  is  conferred  by  the  charter. — A  society  organ- 
ized under  an  act  providing  for  the  payment  of  benefits  to 
devisees  or  legatees  of  deceased  members,  can  not  by  provis- 
ions of  its  by-laws  or  certificates  of  membership,  restrict  or 
limit  the  right  of  a  member  to  devise  the  fund  or  to  appoint, 
designate  or  change  his  beneficiary  by  his  will.  A  by-law  or 
certificate  of  such  a  society,  prescribing  another  mode  of 
appointing,  designating  or  changing  a  beneficiary,  is  subject  to 
the  right  of  the  member  to  accomplish  this  object  by  his  last 
will  and  testament.  Thus  in  Kaub  v.  Association,'  an  associa- 
tion was  organized  under  an  act  of  congress,  and  a  section  of 
its  charter  provided  that  "  the  particular  business  and  objects 
of  such  society  or  corporation  shall  be  to  provide  and  main- 
tain a  fund  for  the  benefit  of  the  widow,  orphans,  heirs,  as- 
signees or  legatees  of  a  deceased  member,  immediately  upon 

!3Mackey  (D.  C.)  68. 

(452) 


DESIGNATION    AND    CHANGE    OF    BENEFICIARY.  453 

proof  of  such  death."  Another  section  of  the  charter  author- 
ized the  directors  to  make  by-laws,  "  not  contrary  to  this 
charter,  or  to  the  laws  of  the  United  States."  One  by-law  pro- 
vided :  "  No  change  of  beneficiary  can  be  made  or  recognized 
until  submitted  to  and  approved  by  the  board  of  directors." 
A  member  named  his  sister  as  his  beneficiary  with  the  con- 
sent and  approval  of  the  board  of  directors.  Afterward  he 
made  a  will  directing  the  fund  to  be  paid  at  his  death  to  his 
illegitimate  son.  The  board  of  directors  had  no  knowledge  of 
this  change,  and,  on  the  death  of  the  member,  the  sister 
claimed  the  fund.  The  supreme  court  of  the  District  of  Colum- 
bia said :  "  The  validity  of  this  new  designation  is  pre- 
sented as  a  question  for  the  determination  of  the  court.  *  * 
The  power  of  the  association  to  make  by-laws  was  limited  by 
the  charter  itself  to  such  by-laws  as  should  not  be  in  violation 
of  the  laws  and  constitution  of  the  United  States.  And  this 
would  have  been  the  case  even  had  it  not  been  provided  for  in 
the  charter.  Now,  one  of  the  laws  of  the  United  States  is  this 
very  charter,  the  second  section  of  which  provides  that  "  the 
particular  business  and  objects  of  such  society  or  corporation 
shall  be  to  provide  and  maintain  a  fund  for  the  benefit  of  the 
widow,  orphans,  heirs,  assignees  or  legatees  of  a  deceased  mem- 
ber, immediately  upon  proof  of  such  decease."  That  provis- 
ion recognizes  fully  and  completely  the  right  of  a  member  of 
the  association  to  designate  the  beneficiary  by  his  will,  and 
that  power  can  not  be  cut  off-  or  diminished  by  a  by-law.  So 
far,  then,  as  this  by-law  attempts  to  do  so,  it  is  itself  inopera- 
tive. *  *  We  must,  therefore,  give  effect  to  the  recogni- 
tion contained  in  that  statute  of  the  power  to  make  a  bequest, 
and  we  can  not  cut  it  down  by  any  construction  that  we  might 
give  to  this  by-law."  ' 

§  230.  Designation  of  a  new  beneficiary  or  disposition  of 
the  fund  by  last  will. — The  mode  of  designating  or  changing 
the  beneficiary  by  last  will  and  testament  has  given  rise  to 
much  controversy.  Where  the  benefit  fund  is  payable  at  the 
death  of  the  member  to  his  estate,  and  where  there  is  nothing 
in  the  act  under  which  a  corporation  is  organized,  or  in  the 
charter,  constitution,  by-laws,  or  certificate  of  membership, 
which  takes  away  from  him  the  right  and  power  to  dispose  of 

1  See  §  178. 


45i  DESIGNATION    AND    CHANGE    OF    BENEFICIARY. 

the  benefit  fund  by  last  will  and  testament  in  the  ordinary 
manner,  such  a  right  certainly  exists.  We  have  seen  in  the 
preceding  chapters  that  in  very  few  societies  is  the  estate  of 
the  member  a  proper  beneficiary,  and  that,  in  most  cases,  the 
member  has  no  propert}7^  in  the  benefit  fund.  When  he  has, 
however,  an  interest  in  the  fund,  which  may,  at  his  death,  be- 
come assets  of  his  estate,  he  may  dispose  of  the  fund  by  will 
precisely  as  he  may  bequeath  other  property,  unless  he  is  pro- 
hibited from  doing  so  by  the  contract  of  insurance.  The 
right  to  make  such  a  disposition  of  his  property  is  given  to  a 
member  by  the  laws  of  the  land,  and  where  it  is  claimed  that 
the  right  to  dispose  of  such  a  fund  has  been  abridged,  or  en- 
tirely taken  away  by  the  terms  of  the  contract  of  insurance, 
the  burden  of  proving  such  an  abridgment  or  abrogation  is 
upon  the  person  making  such  a  claim.  Yery  clear  and  bind- 
ing provisions  must  be  entered  into  by  contract  to  deprive  a 
member  of  such  a  right.1  If  the  member  has  such  an  interest 
in  the  fund,  and  there  is  no  provision  in  the  charter,  by-laws 
or  certificate  of  membership  abridging  or  abrogating,  either 
in  express  terms  or  by  necessary  implication,  his  right  to  dis- 
pose of  the  fund  by  will,  the  member  may  so  dispose  of  it, 
either  by  specific  or  general  devise;  and,  where  it  has  not  been 
specifically  bequeathed  in  the  will,  it  will  pass  under  a  gen- 
eral residuary  clause;  and  a  will  bequeathing  all  the  estate  of 
the  testator,  in  general  terms,  will  pass  the  fund.  A  benefit 
certificate  payable  to  the  member,  is  subject  to  bequest  by 
him.2 

A  member  had  issued  to  him  a  certificate  stating  that  he 

1  Catholic  Ben.  Association  v. Priest,  particular  mode  or  manner  of  desig- 
46  Mich.  429;  Stoelker  v.  Thornton,  nating  a  beneficiary  was  prescribed, 
88  Ala.  241;  6  So.  Rep.  680;  Hanni-  but  there  was  printed  on  the  cer- 
gan  v.  Ingraham,  8  N.  Y.  Supp.  232;  tificate  the  following  words:  "All 
Hamilton  v.  McQuillan,  82  Me.  204;  payments  or  benefits  that  may  accrue 
19  Atl.  Rep.  166;  Harding  v.  Little-  or  become  due  to  the  heirs  of  the 
hale,  150  Mass.  100.  person     insured,   by   virtue   of    this 

2  Catholic    Knights    v.    Kuhn,    91    policy,  will  be  payable  to ,  or 

Tenn.    214;    18  S.  W.  Rep.  385.     In  lawful  heirs."     These  words  were  not 

Hannigan  v.  Ingraham,  8  N.  Y.  Supp.  signed  by  the  member,  nor  was  the 

232,  the  by-laws  of  the  society  de-  blank  space  filled  out.     He  made  a 

clared  that  "  its  object  was  to  aid  and  will   designating    the    persons    who 

benefit    the     families,  of    deceased  should   receive    the    fund,   and    the 

members  of    the   brotherhood,  in  a  court  held  the  designation  valid, 
simple  and  substantial  manner."    No 


DESIGNATION    AND    CHANGE    OF   BENEFICIARY.  455 

was  "  entitled  to  participate  in  the  guarantee  fund,  to  the 
extent  of  $1  for  each  member  of  said  association  in  good  stand- 
ing at  his  death,"  not  to  exceed  $1,000;  "  said  sum  of  $1,000,  or 

less,  at  his  death,  to  be  paid  to ,\       ect  to  his  will." 

He  never  filled  the  blank  in  the  certificate^,  "..inserting  the 
name  of  a  beneficiary,  but  in  his  application  %  stated :  "I 
hereby  authorize  and  direct  that  the  amount  of  s  id  guarantee 
fund,  to  which  I  may  be  entitled  shall,  at  my  death,  be  paid 
subject  to  my  will."  He  died  leaving  a  last  will  whereby  he 
gave,  devised  and  bequeathed  to  his  mother,  after  payment  of 
all  his  debts  and  liabilities,  all  his  estate  and  effects.  The 
court  held  that,  under  the  facts  of  the  case  and  the  peculiar 
terms  of  the  contract,  the  fund  formed  a  part  of  the  assets  of 
the  estate  and  passed  to  his  mother  under  the  general  terms  of 
the  will.1  A  testator  gave  to  his  wife  "  any  money  which  he 
might  die  possessed  of,  or  which  might  be  due  and  owing  to 
him  at  the  time  of  his  decease."  Money  pa}rable  under  a  pol- 
icy of  insurance  on  his  life,  in  six  months  after  his  death,  to  his 
legal  representatives,  passed  under  this  beqrest.2  Where  a 
power  to  change  the  beneficiary  by  the  appointment  of  a  new 
one  is  reserved  to  the  member  in  the  contract  of  insurance,  and 
no  mode  of  executing  this  power  is  provided,  it  may  be  exe- 
cuted by  will.3  Where,  under  the  contract  of  insurance,  the 
member  may  change  his  beneficiary,  and  there  is  no  provision 

■Winterhalterv.  Workmen's  Associ-  ever  it  (might)  consist  or  wherever 
ation,  75Cal.  245;  17Pac.  Rep.  1.  It  situated,  to  be  hers  without  restraint 
is  to  be  noted" also  in  this  case  that  the  and  absolutely."  Upon  the  death  of 
society  admitted  its  liability  on  the  the  wife  the  insurance  money  became 
contract,  and  caused  the  mother  and  payable  to  his  executor  as  assets  of  his 
the  executor  to  interplead  to  deter-  estate.  The  testator's  interest  in  the 
mine  whether  the  fund  should  be  paid  policy  passed  to  the  wife  in  herlife- 
directly  to  the  mother  or  to  the  exec-  time  by  the  residuary  clause  of  the 
utbr  for  due  course  of  administration  will,  and  after  her  death  to  her  rep- 
ami  distribution.  resentatives.     Had  the  testator  died 

"Petty  v.Wilson,  4  L.  R.  Ch.  App.  intestate  the  policy  would  have  passed 
574.  A  testator  had  insured  the  life  to  the  administrator  as  assets:  and  as 
of  his  wife  for  his  own  benefit,  with  a  a  general  rule  whatever  would  thus 
provision  that  if  he  died  before  her  pass  may  be  devised.  Keller  V.  Gay- 
the  insurance  money  should  be  paid  lor,  40  Conn,  843;  3  Ins.  Law  Jour, 
to  their  children.    He  died  before  her,    303. 

leaving  no  children,  and  by  his  will  Mas.  mi,- Association  v.  Bunch,  109 

gave  her    "  all  the  residue  of  his   es-    Mo.  0(30. 
tate,  both  real  and  personal,  in  what- 


456  DESIGNATION    AND    CHANGE   OF   BENEFICIARY. 

of  the  charter,  by-laws  or  certificate  of  membership,  governing 
the  manner  and  mode  ir  which  such  change  shall  be  made,  a 
designation  of  a  new  1,eneficiary  may  be  made  by  his  last  will 
and  testament.1  A  rill  making  a  disposition  of  a  benefit  fund, 
the  disposition  p;^g  valid  in  other  respects,  is  in  no  wise 
affected  by  th'^+act  that  it  carries  out  the  result  attempted  to 
be  carried  out  s  before  its  execution  by  illegal  contracts  for  the 
sale  of  the  certificate.11 

§  237.  When  a  disposition  or  designation  by  will  is  in- 
valid.— "Where,  by  a  provision  of  the  charter,  the  fund  is  pay- 
able to  certain  classes  of  beneficiaries,  not  including  devisees, 
and  the  member  can  have  no  interest  in  the  benefit  resulting 
from  his  membership;  where  it  is  not  payable  to  him  in  any 
event,  and  can  not  become  a  part  of  his  estate,  there  is  no 
interest  or  right  of  property  in  the  contract  of  insurance, 
which  will  pass  by  his  will.3  When,  in  the  charter,  by-laws  or 
certificates  of  membership  other  ways  of  changing  beneficiaries 
are  named,  a.nd  no  provision  is  made  for  changing  them  by 
will,  the  latter  mode  will  be  ineffectual,  as  against  the  rights  of 
the  beneficiary  named  in  the  certificate.4  Where  the  contract 
provides  that  each  member  shall  designate  in  writing  some 
person  as  nominee  for  the  benefit  fund,  and  that,  upon  the 
death  of  a  member,  the  nominee  so  designated  by  him  shall 
receive  such  fund,  a  designation  of  the  beneficiary  during  the 
lifetime  of  the  member  is  contemplated,  and  may  not  be  made 
by  will.5  Where  the  contract  of  insurance  provides  that  the 
designation  of  the  beneficiary  shall  be  made  during  the  life- 
time of  the  member  and  be  approved  by  the  directors,  a 
designation  by  will  is  not  valid.  A  designation  which  may 
be  changed  by  a  member  at  pleasure  and  approved  or  dis- 
approved by  the  directors  after  his  death,  is  not  within  the 

1  Kaiser  v.  Kaiser,  24  N.  Y.  Weekly  N.  W.  Rep.  217;  Bown  v.  Catholic 
Dig.  410;  13 Daly,  522;  Supreme Coun-  Mutual,  etc.,  33  Hun  (N.  Y.)  263; 
cil  v.  Priest,  46  Mich.  429:  see  §  214.  Swift  v.  San  Francisco  Board,  67  Cal. 

2  Stoelker  v.  Thornton,  88  Ala.  241;  567;  Dennett  v.  Kirk,  59  N.  H.  10. 
6  So.  Rep.  680.  _  4  See  §§  218,  219,  220. 

3  Olmstead  v.  Masonic  Mut.  Ben.  '  6  Order  of  Mutual  Companions  v. 
feoc,  37  Kan"  93;  14  Pac.  Rep.  449;  Griest,  76  Cal.  494;  18  Pac  Rep.  652; 
Renk  v.  Herman  Lodge,  etc. ,  2  Dern-  see  also  Hotel  Men's  Mutual  v.  Brown, 
arest  (N.  Y.)  409;  Cath.  Ben.  As-  33  Fed.  Rep.  11;  Supreme  Lodge  v. 
sociation  v.  Priest,  46  Mich.  429;  Nairn,  60  Mich.  44;  Stephenson  v. 
McClure  v.  Johnson,  56  Iowa  620;  10  Stephenson,  64  Iowa  534. 


DESIGNATION   AND    CHANGE   OF    BENEFICIARY.  457 

meaning  of  the  by-laws.1  Where  the  designation  must,  under 
the  contract  of  insurance,  be  reported  to  the  society  for 
registration  on  its  books,  prior  to  the  decease  of  the  mem- 
ber, the  last  will  and  testament  will  operate  as  a  sufficient 
designation  if  it  be  brought  to  the  notice  of  the  society  during 
the  lifetime  of  the  member.  In  such  a  case  it  will  be  good  as 
a  designation,  although  not  yet  operative  as  a  will.3  But 
where,  in  such  a  case,  it  is  not  brought  to  the  notice  of  the 
society  until  after  the  member's  death,  it  is  ineffectual  as  a 
designation. 

A  society  agreed  upon  the  death  of  a  member  to  pay  $1,000 
to  his  wife,  if  living,  if  dead,  to  his  children;  and  if  there 
should  be  neither  wife  nor  children,  then  to  such  person  or 
persons  as  he  may  have  formally  designated  to  his  lodge  prior 
to  his  decease.  He  died  without  either  wife  or  children,  and 
did  not  in  any  manner  designate  to  his  lodge  prior  to  his 
decease  the  person  or  persons  to  whom  he  desired  payment  to 
be  made.  He,  however,  left  a  will  giving  the  money  to  be  de- 
rived from  the  insurance  to  his  brother.  By  the  express 
terms  of  the  contract,  the  society  was  not  to  be  liable  to  pay 
until  such  formal  designation  was  made  by  him  to  his  lodge 
prior  to  his  decease,  and,  as  none  such  was  made,  no  liability 
existed.3  A  by-law  provided:  "A  member  may  at  any  time 
when  in  good  standing  surrender  his  benefit  certificate,  and  a 
new  certificate  shall  thereafter  be  issued,  payable  to  such 
beneficiary  or  beneficiaries  dependent  upon  him  as  such  mem- 
ber may  direct."  In  construing  this,  the  court  said:  ".The 
contract  clearly  contemplated  that  the  change  should  be  made 
and  perfected  by  the  assured  during  his  lifetime." 4  Where  a 
member  makes  a  change  of  beneficiaries  by  will,  and  that 
method  is  not  in  compliance  with  the  contract,  but  the  original 
beneficiary  induces  the  member  to  rely  upon  her  consent  to, 
and  acquiescence  in  the  provisions  of   such  will,  and  accepts 

'Daniels  v.  Pratt,   143  Mass.    216;  3Hellenberg  v.  I.  O.  O.  B.,  mpra; 

10  N.  East.  Rep.  166;  Supreme  Coun-  see  Arthur  v.  Association,  27  Oh.  St. 

oil  v.  Perry,  140  Mass.  580;  5  N.  East.  557;  §  238. 

Rep.  634.  4  Holland  v.  Taylor,   111    Ind.  121; 

*  Kepler  v.  Supreme  Lodge  K.   of  12  N.  East.  Rep.  116;  see  McCarthy 

H.,  45  Hun(N.  Y.)  274;  Hellenberg  v.  v.  Supreme  Lodge,  153  Mass.  314;  26 

District  No.   1.  I.  O.  B.  B.  94  N.  Y.  N.  East.  Rep.  866;  Scott  v.  Scott,  20 

583.  Ontario  313. 


45 S  DESIGNATION    AND    CHANGE    OF    BENEFICIARY. 

benefits  under  it  after  his  decease,  she  is  estopped  from  after- 
ward asserting  that  the  change  was  ineffectual,  and  from 
claiming  the  fund  under  the  certificate.1 

§  238.  When  a  disposition  by  will  is  invalid,  power  of 
appointment  reserved  to  the  member. — Where  the  charter, 
by-laws  or  certificates  of  membership  give  to  the  member  the 
mere  power  of  appointing  a  beneficiary  by  will,  the  power  of 
appointment  must  be  exercised  as  such,  and  the  fund  will  not 
pass  as  a  part  of  the  member's  estate  under  a  residuary  clause 
of  his  will,  or  under  a  will  merely  disposing  of  all  the  estate  of 
the  testator.  The  intention  to  execute  a  power  of  appointment 
by  will  must  appear  by  a  reference  in  the  will  to  the  power, 
or  to  the  subject  of  it,  or  from  the  fact  that  the  will  would  be 
inoperative  without  the  aid  of  the  power.2  When  the  will  of  a 
deceased  member  affords  no  evidence  of  a  design  to  execute 
the  power  by  either  of  the  modes  laid  down  in  this  rule; 
when  it  neither  refers  to  the  power,  nor  to  the  sum  of  money 
which  is  the  subject  of  it,  nor  is  inoperative  for  want  of  prop- 
erty to  give  it  effect  as  a  testamentary  act,  it  will  not  pass  the 
title-  to  the  fund.3  An  insured  had  four  policies  on  his  life,  in 
one  of  which  (the  Globe)  he  reserved  a  power  to  appoint  a 
new  beneficiary.  His  last  will  contained  the  following  clause : 
"  My  life  being  assured  as  follows :  "  (setting  out  the  policies) 
"  I  wish  to  divide  among  my  three  children  as  follows :  "  (set- 
ting out  names  and  amounts.)  No  act  of  the  insured,  except 
that  provision  of  the  will,  was  set  up  as  an  attempt  to  execute 
the. reserved  power  of  substitution  of  a  new  beneficiary  under 
the  policy  above  referred  to.  The  court  said  :  "  But  I  do 
not  construe  the  will  as  an  execution  of  the  power.     The  tes- 

1  Hairier  v.  Iowa  Legion  of  Honor,  v.  Curry,  1  Swanst.  66;  Standen  v. 
78  Iowa  245;  43  N.  W.  Rep.  185.  It  Standen,  2  Ves.  Jr.  589;  Webb  v. 
is  a  principle  that  no  one  shall  be  Honnor,  1  Jac.  &  Walk.  352;  Sugden 
permitted  to  claim  under,  and  adverse  on  Powers,  301-303;  1  Story's  C.  C. 
to,  a  will.  White  v.  Brocaw,  14  Oh.  Rep.  427;  4  Kent  Com.  327  et  seq. 
St.  339;  Havens  v.  Sackett,  15  N.  Y.  RDuvall  v.  Goodson,  79  Ky.  224; 
365;  Ditch  v.  Sennott,  117  111.  362;  7  Hellenberg  v.  Dist.  No.  1,  94  N.  Y. 
N.  East.  Rep.  636;  1  Jarm.  Wills,  580;  Md.  Mut.  Ben.  Soc.  y.  Clen- 
386;  Bigelow  Estop.  642;  see  §226.       denin,   44  Md.    429;  Arthur  v.    Odd 

*  Burleigh  v.  Clough,  52  N.  H.  267,  Fellows,  29  Ohio  St.  559;  Greeno  v. 
280;  Johnson  v.  Stanton,  30  Conn.  Greeno,  23  Hun  478;  St.  John's  Mite 
297;  Blaggs  v.  Miles,  1  Story  426;  Ass'n  v.  Buchly,  5  Mackey  (D.  C.) 
Lovell  v.  Knight,  3  Sim.  275;  Jones  406. 


DESIGNATION    AND    CHANGE    OF    BENEFICIARY.  4:59 

tator  treated  as  his  own  property  four  policies  of  life  insurance, 
all  of  which  belonged  to  the  children  of  his  wife.  *  * 
ISTone  of  these  were  subject  to  his  bequest,  yet  he  attempted  to 
bequeath  them  all.  No  reference  is  made  to  the  power  of 
appointment  reserved  in  the  Globe  policy.  It  is  true  that  the 
policy  is  referred  to  by  name;  and,  under  some  of  the  authori- 
ties a  plain  and  unambiguous  reference  to  the  subject  of  the 
power  has  been  held  sufficient  to  treat  the  devise  or  bequest 
of  the  property  as  an  execution  of  a  power  of  appointment. 
But  in  all  cases  to  which  the  attention  of  the  court  has  been 
called,  the  intention  of  the  testator  has  been  the  objective  point 
of  inquiry  and  construction.  It  is  impossible  to  impute  to 
this  testator  an  intention  to  execute  this  power.  His  intention, 
on  the  contrary,  clearly  was  to  bequeath  this  particular  policy 
with  others  as  a  part  of  his  personal  estate.  This  controlling 
intent  is  inconsistent  with  any  idea  of  an  execution  of  the 
power." ' 

A  b}r-law  of  a  society  provided  that  the  benefit  fund  stipu- 
lated for  in  a  member's  certificate  "may  be  disposed  of  by  his 
last  will  and  testament,  otherwise  it  shall  belong  to  and  be  paid 
to  his  widow,  or  in  case  he  leaves  no  widow,  then  to  the  heirs 
and  legal  representatives  of  the  deceased,  and,  in  the  absence 
of  such  "will,  and  in  case  such  member  leave  no  widow,  heirs  or 
representatives,  such  premium  shall  revert  to  the  company." 
The  court  held  that  the  power  reserved  to  the  testator  under 
this  by-law  to  dispose  of  the  amount  payable  at  his  death  was 
in  the  nature  of  a  power  of  appointment,  and  that  the  fund 
would  pass  only  in  pursuance  of  a  clause  expressing  in  clear 
and  unmistakable  terms  the  intention  of  the  testator  to  divert 
it  from  the  purposes  to  which  by  the  by-laws  of  the  association 
it  was  to  be  devoted,  and  would  not  pass  as  a  part  of  his  estate 
under  the  residuary  clause  of  his  will." 

The  charter  of  a  society  provided  as  follows :  "The  fund 
created  in  section  9  for  the  benefit  of  the  widow  and  children 
of  the  deceased  member  shall  be  paid  to  them  by  said  company 
as  soon  as  it  can  be  collected,  or  to  their  trustee,  in  the  discre- 

'Eiseman  v.  Jmlah  (U.  S.  C.  C.  is  difficult,  if  not  impossible,  to  under- 
West  Disk  of  Tenn.  I,  4  ( lent  L.  Jour,  stand. 

345.     But  6ee   Supreme   Council    v.  'Greeno  v.  Greeno,  23  Iluu  478. 
Firnane,  30  Mich.  82,  a  case  which  it 


460  DESIGNATION   AND    CHANGE    OF   BENEFICIARY. 

tion  of  the  company,  subject,  however,  to  be  appropriated  for 
their  benefit  equally,  according  to  the  will  of  the  deceased 
member;  or  if  he  should  leave  no  widow  or  child,  then  to  be 
appropriated  according  to  his  will,  or  if  he  makes  no  will,  and 
leaves  no  widow  or  child,  it  shall  vest,  and  remain  in  the  com- 
pany, and  be  added  to  its  capital  stock,  or  be  appropriated  as 
it  may  deem  expedient."  An  insured  member  died  leaving  no 
widow  and  no  child,  and  it  was  claimed  that  the  contingency 
therefore  existed,  in  which  under  the  charter  he  had  power  to 
dispose  of  the  proceeds  of  his  membership  by  will,  and  that  he 
had  so  disposed  of  the  proceeds  by  the  clause  of  his  will  dis- 
posing of  his  residuary  estate.  But  the  court  held  that  the 
charter  gave  the  member  a  mere  power  of  appointment,  in  case 
he  had  neither  wife  nor  child,  that  the  assured  had  no  interest 
whatever  in  the  fund,  and  that,  therefore,  the  fund  did  not 
pass  under  a  will  merely  disposing  of  all  his  estate,  but  in 
which  no  mention  was  made  of  the  fund  to  arise  from  his 
membership.' 

A  testator  made  this  provision  in  his  will :  "  After  the  pay- 
ment of  all  my  just  debts  and  funeral  expenses  by  my  executor 
out  of  my  estate,  I  devise  as  follows  :  I  give  and  bequeath 
the  entire  residue  of  my  estate  to  my  three  sisters,  E.  C.  A.,  M 
F.  S.  and  G.  E,.,  and  my  esteemed  friend  M.  V.  L.,  each  of  them 
to  have  and  receive  a  fourth  part  thereof  absolutely."  The 
testator  left  neither  widow  nor  children,  and,  at  the  time  of 
his  death,  was  a  member  in  good  standing  of  an  incorporated 
mutual  benefit  society,  which  by  its  charter  provided  for  the 
payment  of  a  certain  sum  of  money  upon  the  death  of  any 
member,  "  to  the  widow,  child,  children,  or  such  person  or  per- 
sons to  whom  the  deceased  may  have  disposed  of  the  same  by 
will  or  assignment.  If  there  be  no  widow,  child  or  children, 
or  the  deceased  shall  have  made  no  disposition  by  will  or  as- 
signment of  the  sum  accruing  upon  his  death,  then  the  board 
shall  appropriate  such  sum  as  may  be  necessary  for  funeral 
expenses,  and  all  excess  of  money  accruing  from  the  death  of 
such  member  shall  go  to  the  permanent  fund  of  the  associa- 
tion." In  construing  this  provision  of  the  charter,  the  court 
held  that  the  fund  was  not  assets  of  the  estate  of  the  deceased 

1  Duvall  v.  Goodson,  79  Ky.  224. 


DESIGNATION   AND    CHANGE   OF   BENEFICIARY.  461 

member,  recoverable  by  his  administrator  or  executor — that 
the  widow,  child  or  children  of  the  member  were  the  benefi- 
ciaries designated  by  it,  subject  to  the  right  of  the  member  to 
appoint  other  beneficiaries — that  this  Jim1  disponendi  given  by 
the  charter  was  a  mere  power  of  appointment;  and  the  court 
further  held  that  the  will  of  the  testator  was  not  a  valid  exer- 
cise of  the  power,  since  the  intention  to  exercise  it  was  not  ex- 
pressed, and  it  did  not  appear  that  there  was  no  other  estate 
upon  which  it  might  operate;  that  in  the  absence  of  a  valid 
exercise  of  the  power,  there  being  no  widow,  child  or  children 
of  the  deceased,  the  excess  of  the  fund  afterpayment  of  funeral 
expenses,  should  go  to  the  permanent  fund  of  the  society.1 
Where  the  by-laws  of  a  society  provide  that  the  benefit  fund  is 
to  be  paid  "  to  the  widow,  children,  mother,  sister,  father  or 
brother  of  the  deceased  member,  and  in  the  order  named,  if  not 
otherwise  directed  by  the  member  previous  to  his  death,"  the 
relatives  of  the  deceased  will  take  the  fund  in  the  order  named 
unless  the  member  in  his  lifetime  executed  such  power  of  di- 
rection or  appointment,  thus  changing  the  order  of  payment, 
and  the  will  of  a  member  who  died  seized  of  real  and  personal 
property,  devising  and  bequeathing  to  his  children  "  my  estate 
and  property,  real,  personal  and  mixed,"  without  referring  to 
the  power  or  the  subject  of  it,  is  not  such  an  execution  of  the 
power  as  will  control  the  fund;  and  the  other  provisions  of  the 
section  of  the  by-laws  above  quoted  control  the  fund,  and  give 
it  to  the  widow  of  the  testator,  who  is  named  as  the  first  in 
order,  and,  therefore,  the  preferred  beneficiary.' 

§  239.  The  charter  and  constitution  of  a  society  declared 
its  object  to  be  "to  establish  a  benefit  fund,  from  which  a  sum, 
not  to  exceed  $2,000,  shall  be  paid,  at  the  death  of  each  mem- 
ber, to  his  family,  or  t<»  be  disposed  of  as  he  may  direct,"  and 
the  certificate  to  eacli  beneficiary  member  provided  "that,  in] 
accordance  with,  and  under  the  provisions  of  the  laws  govern- 
ingthe  order,  the  sum  of  $2,000  shall  be  paid,  *  *  as  a 
benefit,  upon  due  notice  of  his  death,  to  such  person  or  per- 
sons as  he  may  by  will,  or  entry  in  the  record  book  of  this 
lodge,  or  on  the  face  of  this  certificate,  direct."     The  court 

'Maryland  Mutual  Benevolent  So-       'Arthur  v.  Association,    2?    Ohio 
ciety,  I.  O.  R.   M.  v.  Clendinen,   44    State,  007. 
Md.  129;  82  Am.  Repte.52;  Bee  Mory 
v.  Michael,  1*  Md.  2-11. 


4G2  DESIGNATION"    AND    CHA.NGE    OF    BENEFICIARY. 

held  that,  by  the  terms  of  the  above  contract,  the  benefit  fund 
belonged  to  the  members  estate,  and  passed  under  the  residu- 
ary clause  of  his  will,  disposing  of  "  the  balance  of  all  my 
property  of  every  kind."  The  learned  chancellor  quoted  the 
contract,  laying  particular  stress  upon  the  words — "  or  to  be 
disposed  of  as  he  may  direct " — "  as  he  may  by  will  direct " — 
and  said :  "  The  right  to  the  fund  and  the  power  of  the  bene- 
ficiary to  dispose  of  it  in  his  lifetime,  and  by  will,  could  not 
possibly  be  recognized  more  clearly."  " 

§  240.  Where  the  designation  of  a  beneficiary  is  the  exe- 
cution of  a  power  of  appointment,  it  must  he  made  accord- 
ing to  the  laws  of  the  society. — This  principle  is  aptly 
illustrated  by  the  case  of  Sanger  v.  Rothschild.2  A  member 
directed  that  the  fund  should  be  paid  at  his  death  to  his  uncle 
and  aunt.  He  afterward  married.  The  by-laws  in  force  at 
the  time  the  member  died  provided  that,  on  the  decease  of  a 
member,  a  fund  of  $1,000  should  be  paid,  first,  to  the  widow; 
second,  to  the  children,  if  there  were  no  widow;  third,  to  the  pa- 
rents, if  there  were  no  widow  or  children;  but  they  empowered 
a  member  to  designate  any  beneficiary  of  the  fund,  provided 
he  left  at  least  one-half  thereof  to  the  widow,  if  any,  and  if 
not,  then  at  least  one-half  to  the  children,  if  any.  It  was 
claimed  that  the  laws  operated  on  the  designation  of  the  uncle 
and  aunt  as  beneficiaries,  onlv  so  far  as  to  cut  down  their  right 
and  interest  by  virtue  thereof  to  $500,  but  the  court  held  other- 
Avise,  and  said :  "  The  laws  *  required  that  '  in  any  desig- 
nation which  a  member  may  make,  at  least  $500  must  be  left 
to  his  widow.'  This  designation  leaves  nothing  to  the  widow, 
and  therefore  is  not,  in  form  or  substance,  in  conformity  with 
the  law.  A  married  member  of  this  association  may  exercise 
the  power  of  designation  given  by  the  laws.  But  in  the  desig- 
nation he  must  leave  his  widow  at  least  $500,  and  he  may  leave 
her  more,  as  he  may  determine;  and,  unless  he  exercises  the 
power  of  designation  in  this  way,  his  designation  is  wholly  in- 
effectual, and  the  widow  will  take  the  whole  fund,  as  provided 
in  the  laws.  The  widow  is  entitled  to  at  least  $500,  and  in  the 
absence  of  any  designation  by  her  husband  of  the  amount  she 
is  to  have,  by  what  authority  can  her  right  be  cut  down  to  $500 
or  any  sum  less  than  her  $1,000  ? " 

1  Weil  v.  Trafford,  3  Tenn.  Ch.  10<?.    l  123  N.  Y.  577;  26  N.  East.  Rep.  3. 


DESIGNATION   AND    CHANGE    OF   BENEFICIARY.  4G3 

§  241.  Designation  by  special  appointment. — A  member 
of  a  lodge  had  issued  to  him  a  benefit  certificate  in  the  sum  of 
$2,000,  to  be  paid  on  his  death  to  such  person  or  persons  as  he 
might,  by  will,  or  entry  on  the  record  book  of  the  lodge,  or 
on  the  face  of  the  certificate,  direct.  Before  his  marriage,  he 
indorsed  upon  the  certificate,  the  following :  "  To  the  officers 
and  members  of  the  Supreme  Lodge,  Knights  of  Honor. 
Brothers,  it  is  my  will  that  the  benefits  named  in  this  certifi- 
cate be  paid  to  my  sister,  J.  H.,"  to  which  his  name  was  sub- 
scribed, and  the  same  was  attested  by  two  witnesses.  This 
indorsement  was  all  printed  except  the  words,  "my  sister  J. 
II.,"  but  the  certificate  with  the  indorsement  was  never  deliv- 
ered to  the  sister.  His  widow  claimed  that  this  indorsement 
was  a  will  which  was  revoked  by  his  subsequent  marriage. 
The  supreme  court  of  Illinois  held  that,  in  view  of  the  circum- 
stances stated,  it  could  not  be  regarded  as  a  will,  but  a  special 
direction  to  whom  the  benefit  should  be  paid,  in  one  of  the 
modes  authorized  by  the  constitution  of  the  lodge  and  the 
certificate.1  The  charter  of  a  mutual  benefit  society  provided 
that  the  beneficiary  fund  should  "  be  paid  over  to  the  families, 
heirs  or  representatives  of  deceased  members,  or  to  such  per- 
son or  persons  as  such  deceased  members  may  while  living 
have  directed."  Authority  was  also  given  to  regulate  such 
payments  by  suitable  by-laws.  One  of  the  by-laws  directed 
the  fund  to  be  paid  to  the  person  or  persons  last  named  by 
the  deceased,  and  entered  by  his  order  on  the  "  will  book." 
The  deceased  member  had  had  an  entry  made  in  the  kk  will 
book,"  directing  the  fund  to  be  paid  to  his  brother.  After- 
ward he  made  a  will  by  which  he  gave  and  devised  his  inter- 
est in  said  fund,  after  payment  of  his  just  debts  and  funeral 
expenses,  to  the  same  brother.  The  administrator  with  the 
will  annexed  of  the  deceased  brother  brought  an  action  to 
recover  the  fund,  claiming  that  the  will  of  the  deceased  re- 
voked the  appointment  made  in  the  "will  book,"  and  made 
the  fund  subject  to  the  payment  of  the  testator's  debts.  But 
the  court  held  that  the  brother  took  the  fund  by  virtue  of  the 
special   designation  in  the  "will  book,"  and  that  the" will    was 

'Highland  v.  Highland,  109  111.  to  he  a  will.  McLean  v.  McLean,  6 
366.  Under  the  decisions  of  Tennes-  Hum]).  453;  Tennessee  J..»|ge  v. 
see,  such  a  designation  might  be  held    Ladd,  5  Lea.  716. 


461  DESIGNATION   AND    CHANGE   OF   BENEFICIARY. 

inoperative,  and  did  not  subject  the  fund  to  payment  of  the 
member's  debts.1 

§  242.  A  designation  is  not  necessarily  revoked  by  the 
subsequent  marriage  of  the  member. — It  has  sometimes  been 
contended  that  a  subsequent  marriage  revokes  the  designation 
of  a  beneficiary  made  by  a  member.  This  contention  has 
probably  been  suggested  by  the  fact  that  a  contract  of  life  in- 
surance partakes  somewhat  of  the  nature  of  a  will  and  by  the 
further  fact  that,  generally  speaking,  the  member  has  the 
power  of  disposition  of  the  benefit  fund.  But  the  law  of  wills 
has  no  application  to  the  contract  of  mutual  benefit  insurance, 
and  a  designation  of  a  beneficiary  is  not  revoked  by  the  subse- 
quent marriage  of  the  member,  unless  the  contract  of  insurance 
so  stipulates.2  But  the  rights  of  members  and  beneficiaries  in 
a  mutual  benefit  society  must  be  determined  by  its  charter, 
constitution,  by-laws  and  certificates,  which  form  the  contract 
of  the  parties,  and  the  provisions  of  this  contract  may  be  so 
framed  that  a  subsequent  marriage  of  the  member  will  revoke 
a  prior  designation.  An  unmarried  man  became  a  member  of 
a  society  and  appointed  his  uncle  and  aunt  as  his  beneficiaries. 
Its  laws  provided  that  the  benefit  fund  should  be  paid  in  the 
first  instance  to  a  member's  wife  or  children,  or  secondly,  if 
his  wife  be  dead,  to  his  children,  but  it  was  provided  that  "  a 
married  brother  may  bequeath  one-half  of  the  legal  amount  to 
either  one  or  all  of  his  children;  five  hundred  dollars,  at  least, 
must  be  devised  to  his  widow."  He  afterward  married,  and 
died,  leaving  a  widow  but  no  children.  The  court  held  that 
his  marriage  and  death  leaving  a  widow  surviving  him,  ren- 
dered his  first  designation  ineffectual,  upon  the  unqualified  di- 
rection that  the  money  should  in  the  first  instance  be  paid  to  the 
wife  of  a  deceased  member,  and  said  :  "  The  case  of  Highland 
v.  Highland 3  also  depended  upon  the  peculiar  provisions  of  the 
constitution  of  the  order  from  which  the  money  proceeded  in  that 
instance,  and  it  materially  differs,  in  its  controlling  facts,  from 
this  case.  Here  there  can  be  no  misapprehension  as  to  the 
construction  which  should  be  placed  upon  the  constitution  or 
by-law  of  the  order,  for  it  in  plain  language  contains  the  clear 

iBown    v.    Catholic     Mutual,     33   see  §  241;   Mass.  C.  O.  O.  F.  v.  Calla- 
Hun  (N.  Y.)  263.  lian,  146  Mass.  393;  16  N.  East.  Rep.14. 

2  Highland  v.  Highland,  109  111.  368;       3109  111.  366. 


DESIGNATION   AND   CHANGE   OF   BENEFICIARY.  465 

direction  that  the  money  shall  be  paid  in  the  first  instance  to  the 
wife;  and  her  right  to  it  has  in  no  way  been  rendered  depend- 
ent upon  or  subject  to  any  written  or  other  direction  of  the 
member  himself.  It  is  secured  to  her  in  direct  terms,  as  a  fun- 
damental part  of  the  arrangement  affecting  the  disposition  of 
the  amount  to  be  paid.  His  marriage  consequently  annulled 
the  preceding  written  designation  in  favor  of  (his  uncle  and 
aunt),  and  entitled  the  defendant,  as  the  wife  or  widow  of  the 
deceased  member,  to  this  sum  of  money." ' 

§  l'13.  When  the  power  to  designate  or  change  the  bene- 
ficiary is  ex  li  a  listed. — Where  a  by-law  of  a  mutual  benefit 
society  provides  that  any  member  may  in  a  certain  manner 
change  his  beneficiary,  or  that  he  may  in  a  certain  manner 
designate  the  person  to  whom  the  benefit  fund  shall  on  his 
death  be  paid,  such  by-law  means  that  the  change  or  designa- 
tion may  be  made  from  time  to  time,  at  the  pleasure  of  the 
member;  and  the  power  of  changing  or  designating  the  bene- 
ficiary is  not  exhausted  by  one  or  more  changes  or  designa- 
tions.2 In  fact  the  power  of  appointment  of  a  new  benefi- 
ciary, or  the  right  to  change  the  beneficiary,  is  the  one  thing 
given  to  the  member  by  the  very  nature  of  the  contract,  and 
over  that  power  or  right  no  one  has  any  control,  except  as 
it  may  be  limited  by  the  contract,  or  the  law  of  the  land.  The 
right  of  its  free  exercise  requires  its  continuance  until  the 
death  of  the  member.  The  contract  of  insurance  is  between 
the  member  and  the  society,  and,  on  the  performance  of  the 
conditions  of  membership,  the  society  agrees  to  pay  the  ben- 
efit to  any  person  who  may  last  have  been  made  a  beneficiary 
according  to  its  provisions,  or,  if  there  is  no  provision  on  that 
subject,  to  the  person  whom  the  member  may  have  designated 
in  the  manner  and  mode  selected  by  him.'  This  power  to 
change,  or  appoint,  being  free  and   continuous,  no  right   to 

'Sanger    v.  Rothschild,  2  X.    Y.  535;  3    Atl.    Rep.   627;    Knights  of 

Sup.  794;  50  Hun  1. IT:  affirmed,  123  Honor  v.  Watson,  64N.  EL  517;  15 

X.  V.  577;  26  N.  East.  Rep.  S.  Atl.   Rep.   125;  6  N.   Kn-    Rep.  sss: 

2  Deady  v.   Baiik   Clerks'    Mutual  Union    Mutual    v.    Montgomery,  70 

Ben.  Association.  17  J.  $  S.  (N.  Y.  Midi.  587;  38  N.  W.  Rep.  588;  Beatty 

Sup'r  Ct.)   246;    Masonic  Mutual    v.  v.    Supreme  Commandery,  154    P*. 

Burkhart,  110  End.  189;  11   X.  East.  St.  4*4:  25  Atl.  Rep.  044. 

Rep.  449;  10  X.  East.  Rep.  70:  Bar-  3^214. 
ton  v.   Provident  Mutual,  03   X.   H. 

30 


466  DESIGNATION    AND    CHANGE    OF   BENEFICIARY. 

the  benefit  vests  in  the  beneficiary  named,  until  the  death  of 
the  member.1 

§  244.  The  time  within  which  the  power  of  appointment 
or  the  right  to  designate  a  new  beneficiary  may  he  exer- 
cised.— As  the  beneficiary  of  a  member  of  a  mutual  benefit 
society  has  no  vested  right  in  the  certificate  of  membership, 
it  follows  that  the  power  of  appointment  of  anew  beneficiary, 
reserved  to  the  member  in  the  contract  of  insurance,  may  be 
exercised  by  him  at  any  time  during  the  existence  of  the  con- 
tract. In  this  respect,  there  is  an  important  difference  be- 
tween the  power  of  appointment  or  the  right  to  change  the 
designation  of  a  beneficiary  reserved  in  the  nature  or  by  the 
provisions  of  the  contract  of  mutual  benefit  insurance,  and 
such  a  power  or  right  reserved  in  an  ordinary  contract  of  in- 
surance. In  the  ordinary  contract  the  beneficiary  has  a  vested 
right,  and  any  power  to  appoint  a  new  beneficiary  on  a  certain 
contingency  must,  upon  the  happening  of  the  event,  be  exer- 
cised at  once,  or  within  a  reasonable  time."     Of  course,  the 

§§  212,  213.  lifetime  of  the  donee  of  the  power  is 

2  It  was  held  in  Eiseman  v.  Judah,  allowed  for  its  execution.  Here-, 
4  Central  Law  Journal  345, 1  Flippin,  tjiere  are  reasons  for  a  prompt  execu- 
627,  that,  where  a  policy  is  payable  at  tion;  fOT)  jf  the  power  be  executed, 
the  death  of  the  insured  to  his  wife,  the  rights  under  the  policy  already 
if  then  living,  or  if  not  living,  then  to  existing  are  to  be  taken  away.  With- 
her  children,  with  the  proviso,  "that,  m  what  time,  then,  will  the  law  al- 
in  case  of  the  decease  of  his  wife  dur-  low  the  act  of  Ackerman  to  take 
ing  the  lifetime  of  the  assured,  the  away  the  rights  thus  already  vested, 
said  assured  may,  at  his  option,  sub-  by  the  death  of  his  wife,  in  her  chil- 
stitute  any  other  beneficiary  under  dren?  This  period  can  not  be  indefi- 
this  policy,"  such  substitution  must  nite.  Justice  and  equity  require  that 
be  made  upon  the  decease  of  the  wife,  the  power  thus  conferred  shall  be  ex- 
or  within  a  reasonable  time  there-  ercised  at  some  precise  time,  in  order 
after;  it  may  not  be  made  after  the  that  the  fact  of  its  exercise  may  be 
date  fixed  for  the  next  ensuing  pay-  didy  made  known  to  all  persons  in- 
ment  of  premium  on  the  policy.  The  terested;  and  no  further  latitude  can 
court  says  :  "All  the  authorities  upon  be  allowed  to  the  donee  of  the  power, 
life  insurance  agree  that  the  rights  of  than  to  give  him  a  reasonable  time 
the  children  of  the  wife,  in  such  cases,  within  which  he  shall  act  under  it, 
become,  upon  the  death  of  their  moth-  if  at  all.  This  reasonable  time  may 
er,  vested  rights,  in  the  fullest  sense  well  be  the  period  ending  with  next 
of  the  term.  This  is  not,  then,  a  case  ensuing  payment  of  premium.  At 
in  which,  like  most  cases  of  appoint-  that  date  the  policy  will  lapse  by  its 
ment  under  a  power,  no  reason  can  own  terms,  unless  a  new  premium  is 
be  assigned  for  an  immediate  execu-  paid.  Such  payment  will  continue 
tion  of  the  power,  so  that  the  whole   the  policy  in  force,  and  will  thus  be, 


DESIGNATION    AND    CHANGE    OF   BENEFICIAKY. 


4C7 


power  to  appoint  new  beneficiaries  at  any  time  may,  by  special 
contract,  be  reserved  to  the  assured  in  the  ordinary  contract 
of  insurance,  and,  in  such  case,  the  distinction  above  referred 
to  would  not  exist. 


in  some  sense,  the  making  of  a  new 
contract.  The  beneficiaries  may  well 
wish  to  know  whether  the  policy  is 
to  continue  in  force  for  their  benefit, 
or  whether  their  interest  is  to  cease. 
If  the  divestiture  of  their  rights  by 
the  appointment  of  a  new  beneficiary 
could  be  accomplished  a  year  after 
those  rights  accrued,  it  might  equally 
well  be  postponed  for  twenty  years, 
during  which  time  the  beneficiaries 
might  pay   forty   semi-annual    pre- 


miums, instead  of  one  as  in  this  case. 
I  am  constrained  to  hold  the  provis- 
ion for  such  an  appointment,  '  in 
case  of  the  decease  of  the  wife,'  to 
mean  '  upon  the  decease,'  indicating 
that  event  as  the  proper  time;  and  to 
treat  the  time  of  the  next  succeeding 
payment  of  premium  as  the  latest 
hour  which  can  equitably  be  allowed 
for  a  divestiture  of  rights  theretofore 
existing." 


CHAPTER  XYII. 

MEMBERSHIP  FEE. 

§  245.     Note  given  for  membership  fee. 

246.  Cash  payment  of  fee. 

247.  Recovery  of  membership  fee  from  society. 

§  245.  Note  given  for  membership  fee. — The  by-laws  of 
some  societies  provide  that  the  membership  fee  need  not  be 
paid  in  cash,  but  that  the  new  member  may  execute  his  note 
for  the  amount,  payable  at  a  certain  time.  In  such  cases,  the 
contract  of  insurance  usually  provides  that,  if  any  such  note 
shall  not  be  paid  when  due,  all  claim  against  the  society  shall 
be  forfeited,  and  the  policy  shall  be  void.  When  the  contract 
of.  insurance  makes  such  provision  for  forfeiture,  the  payment 
of  the  note  at  maturity  is  a  condition  precedent,  and  it  is  for 
the  member  to  make  prompt  payment.  The  society  need  give 
no  notice  of  its  election  to  hold  the  policy  forfeited,  nor  need 
it  demand  payment  of  the  note  at  maturity.  But  where  the 
note  only,  and  not  the  contract  of  insurance,  makes  provision 
for  forfeiture  of  the  policy  upon  its  non-payment,  the  payment 
of  the  note  is  a  condition  subsequent,  making  the  policy  merely 
voidable  at  the  election  of  the  society,  and,  in  order  to  forfeit 
the  policy  for  non-payment,  the  society  must  exercise  the 
right  of  election  promptly.  It  must  demand  payment  at  ma- 
turity; if  the  note  is  entitled  to  days  of  grace,  it  must 
demand  payment  on  the  last  day  of  grace,  during  the  busi- 
ness hours  of  the  day;  and  if  payment  is  not  then  made,  it 
must  declare  the  policy  forfeited  and  void.  It  is  not  essential 
to  the  declaration  of  forfeiture  that  the  note  be  returned  to 
the  maker  at  once.  The  society  is,  of  course,  bound  to  return 
it,  but  it  may  do  so  during  the  pendency  of  legal  proceedings 
contesting  the  forfeiture.1     Where   a   contract   of  insurance 

1  May  on  Insurance  at  section  342;  Bliss  on  Life  Insurance  at    sections 
182-187. 

(468) 


MEMBERSHIP    FEE.  469 

contains  no  express  stipulation  that  the  failure  to  pay  a  note 
given  for  membership  fee,  when  due,  will  render  the  policy 
void,  and,  after  a  note  so  given  becomes  due,  the  time  of  pay- 
ment is  extended  by  the  society,  and  death  occurs  before  this 
time  of  payment  runs  out,  no  forfeiture  of  the  contract  can  be 
declared  for  non-payment  of  the  note  when  first  due.1  If  a 
society  takes  a  draft  on  a  third  person,  which  is  governed  by 
the  laws  of  commercial  paper,  in  payment  of  an  assessment  or 
membership  fee,  this  implies  an  undertaking  on  its  part  to 
present  the  paper  for  acceptance  or  payment,  and  to  give  the 
necessary  legal  notice  of  refusal  to  accept  or  pay,  the  same  as 
any  other  holder  of  such  paper  must  do;  and  a  failure  to  do 
this  will  save  a  forfeiture  of  the  policy,  although  the  paper 
and  the  policy  itself  contain  an  express  provision  that  the  pol- 
icy shall  be  void  for  any  omission  to  pay  at  maturity  a  note, 
other  obligation,  or  indebtedness  taken  for  any  assessment  or 
membership  fee,  unless  the  neglect  to  make  demand  and  give 
notice  is  excused  by  want  of  funds,  and  the  absence  of  a  rea- 
sonable expectation  by  the  drawer  of  acceptance  or  payment 
by  the  drawee.3 

§  240.  Cash  payment  of  fee. — Where  an  application  for  a 
certificate  of  membership  declares  on  its  face  that  payment  of 
the  membership  fee  is  a  condition  precedent  to  the  issuing  of 
the  certificate,  the  certificate  is  not  in  force  until  the  member- 
ship fee  is  actually  paid.  "Where  the  prepayment  of  the  mem- 
bership fee  is  made  an  essential  part  of  the  agreement,  no 
agent  can  dispense  with  its  requirement.3  Where  the  charter 
provides  that  the  member  shall,  before  he  receives  his  certifi- 
cate, deposit  with  the  treasurer  the  sum  of  twenty-five  cents 
for  every  one  thousand  dollars  of  insurance,  and  it  is  shown 
that  he  paid  the  twenty-five  cents  by  "  payingfor  the  drinks," 
and  that  the  certificate  was  issued  to  him,  it  was  held  that  the 
court  properly  left  it  to  the  jury  to  say  whether  there  was  in 
fact  a  proper  payment  of  this  fee.4     In  action  on  a  certificate  of 

1  Kansas  Protective  Union  v.Whitt,  Benefit    Association    v.    Conway,    10 

36  Kan.  760:  14  Pac.  Rep.  275.  111.  A]. p.  348. 

'-'  Pendleton  <'t  al.  v.  Knickerbocker  'Farmers'  Mutual  v.  Mylin.  JM. ma- 
Life,  etc.,  5  Fed.  Rep.  238;  7  Fed.  ghan (Pa.) Supreme Ct.  Cas.  469;  15 AtL 
Rep.  169.  Rep.  710;  see   Lycoming  Ins.  Co.  v. 

3 Ormond  v.  Fidelity  Life  Associa-  Ward,  90    111.  545;    German  Ins.  Co. 

tion,  96  N.  C.  158;  1  S.  fi.  Rep.  796;  v.  Ward,  90  111.  550. 


470  MEMBERSHIP    FEE. 

membership,  where  the  defense  was  non-payment  of  the  fee 
required  as  a  condition  precedent  to  membership,  it  appeared 
that  the  society  had  forwarded  the  certificate  to  deceased, 
who  was  one  of  its  agents;  that  the  accounts  between  him  and 
the  company  were  confused;  that  on  one  occasion  they  had 
returned  to  him  part  of  a  remittance  he  had  sent  them,  on  the 
ground  that  it  was  an  overpayment;  that  they  had  published 
his  name  in  the  list  of  members,  and  had  levied  a  mortuary 
assessment  on  him  as  if  he  were  a  member,  and  it  was  held 
that  the  evidence  warranted  the  jury  in  finding  that  the  fee 
had  either  been  paid,  or  its  payment  waived,  as  a  condition 
precedent.' 

§  247.  Recovery  of  membership  fee  from  society. — A 
member  of  a  masonic  lodge,  or  other  society  not  for  profit, 
can  not,  on  his  expulsion,  recover  for  the  initiation  fees  volun- 
tarily paid  by  him,  when  no  fraud  is  practiced  on  him.  His 
expulsion  does  not  work  a  rescission  of  the  contract  under 
which  such  fees  are  paid.2 

1  Bankers'  Ass'n  v.  Stapp,  77  Texas  2  Robinson  v.  Yates  City  Lodge, 
517;  14  S.  W.  Rep.  168.  etc.,  86  111.  598. 


CHAPTER  XVIII. 

ASSESSMENTS. 

§  24S,  249.     Generally. 
250,  251.     Assessments   must  be  properly    levied  and  for  proper  pui- 
poses. 

252.  The  act  of  levying  an  assessment  is  ministerial. 

253.  Custom  in  levying  assessments. 

254.  Assessment  for  reserve  fund. 

255.  Assessment  in  anticipation  of  Josses. 

256.  Effect  of  the  levy  of  an  assessment. 
257-259.      Notice  of  assessment. 

260,  261.     Notice  by  mail. 

262.  Date  of  notice  given  by  mail. 

263.  Date  of  assessment.,  date  of  notice. 

264.  Notice  by  publication. 

265.  Notice  of  date  of  payment. 

266.  Service  of  notice. 

267.  Agreement  of  society  to  give  notice  to  the  beneficiary. 

268.  269.    Insufficient  notice  of  assessment. 

§  248.  Generally. — The  main  feature  of  the  plan  of  mutual 
benefit  insurance  is  that  death  losses  are  paid  by  the  voluntary 
contributions  of  the  surviving  members  of  the  society,  made 
upon  a  fixed  and  definite  plan.  According  to  this  plan,  on 
the  death  of  a  member  in  good  standing  the  society  levies  an 
assessment  upon  the  surviving  members.  This  assessment  does 
not  make  a  member  holding  a  certificate  a  debtor  to  the  society, 
so  as  to  authorize  it  to  bring  suit  against  him  to  recover  the 
amount  of  it  in  case  of  his  neglect  or  refusal  to  pay,  but  non- 
payment  within  the  stipulated  time  for  the  payment  of  the 
assessment  operates  either  to  suspend  his  right  to  benefits,  or 
as  a  resignation  of  his  membership  and  a  relinquishment  of  all 
claim  upon  the  society  for  past  contributions  and  future  bene- 
fits. A  surviving  member  may  maintain  his  relations  with  tin- 
society  by  paying  the  assessment  according  to  the  terms  of  the 
contract,  but  this  is  wholly  optional  with  him.  The  obligatory 
part  of  the  contract  is  unilateral  and  on  the  part  of  the  society; 

(471) 


472  ASSESSMENTS. 

it  must  pay  the  benefit  to  the  beneficiary  of  a  member  who  at 
the  time  of  his  death  was  in  good  standing.1  A  covenant  in  a 
contract  of  insurance  that  any  omission  or  neglect  to  pay 
assessments  levied  by  the  society,  after  notice,  shall  render  the 
contract  null  and  void,  does  not,  in  the  absence  of.  an  agree- 
ment to  pay  such  assessments,  constitute  a  contract  to  pay.  but 
leaves  it  optional  with  the  member  to  pay  or  forfeits  his  rights. 
This  may  at  first  impression  seem  an  improvident  contract  on 
the  part  of  the  society,  but  it  is  after  all  very  similar  to  the 
ordinary  contract  of  insurance.  On  procuring  ordinary  insur- 
ance, the  insured  or  the  beneficiary  pays  the  premium  for  one 
year.  Just  before  the  expiration  of  the  year  he  may  keep  the 
contract  in  force,  by  paying  the  premium  for  another  year,  but 
if  he  fails  to  make  another  payment,  the  insurance  expires  and 
all  contractual  relations  between  him  and  the  company  are  at 
an  end.  A  member  on  entering  a  mutual  benefit  society  pays  an 
admission  fee  and  when  a  death  oscurs  among  its  members  an 
assessment  is  levied  on  him.  If  he  pays  this  assessment  within 
the  stipulated  time,  the  insurance  is  in  force,  until  the  time  lim- 
ited for  the  payment  of  the  next  assessment.  Whenever  he  fails 
to  pay  within  the  stipulated  time,  he  forfeits  his  membership 
and  his  rights  under  the  contract.  Under  both  plans  the  con- 
tinuance of  the  insurance  by  the  payment  of  the  amount  agreed 
upon  is  optional  with  the  insured.2 

§  249.  Without  doubt,  this  general  plan  of  insurance  may 
be  modified  by  the  charter,  by-laws  or  certificate  of  member- 
ship of  a  society,  and  the  contract  may  be  so  framed  as  to 
make  the  member  liable  for  all  assessments  levied  after  its 
execution  and  until  the  date  of  its  forfeiture.  Since  the  society 
is  liable  on  its  contract  until  such  time  as  the  member's  rights 
are  forfeited  for  non-payment  of  an  assessment,  there  is  noth- 
ing unjust  in  binding  him  to  pay  all  assessments  made  during 

1  In  re  Protection  Life,  9  Bissell  2  In  mutual  fire  insurance,   a  pre- 

188;  A.  O.   U.  "W.   v.  Moore  (Ky.),  9  mium  note  is  given,  payable  in   in- 

Ins.  L.  J.  572;  Burdon  v.  Association,  stallments  as  assessments  are  made 

147  Mass.  360;  17  N.  East.  Rep.    874;  to  pay  losses,  and  there  is,  of  course, 

6  N.  Eng.  Rep.  840;  Chicago  Mutual  a  promise  to  pay  which  may  be  en- 

v.  Hunt,  127  111.  257;  20  N.  East.  Rep.  forced. 
55;  see  Ellerbe  v.  Barney  (Mo.),    25 
S.   W.    Rep.  384;  Ellerbe  v.    Faust 
(Mo.),  25  S.  W.  Rep.  390. 


ASSESSMENTS.  473 

his  membership  while  pecuniary  rights  may  accrue  to  his  ben- 
eficiary. A  by-law  of  a  society  provided  that  "  upon  the  death 
of  any  member  of  the  association,  it  shall  be  the  duty  of  the 
secretary  to  notify  the  members  of  the  same,  and  thereupon 
each  member  shall,  within  thirty  days  after  such  notification, 
pay  to  the  secretary  the  amount  required  by  the  rules  of  the 
association."  Another  by-law  provided  that  if  any  member 
should  neglect  to  pay  any  dues  or  assessments  required  by  the 
by-laws,  "then,  and  in  such  case,  such  membership  shall  cease 
and  determine  at  once  without  notice,  and  all  claims  be  for- 
feited to  the  association/'  In  construing-  these  provisions  of 
the  by-laws,  the  court  held  that  the  neglect  to  pay  an  assess- 
ment for  thirty  days  after  notice  thereof,  ipso  facto,  deter- 
mined the  membership  of  the  delinquent;  that  the  spirit  and 
tenor  of  the  first  by-law  above  quoted  was  an  agreement  of 
the  member  to  pay  any  death  loss  or  assessment  made  during 
the  time  he  should  continue  a  member  of  the  association;  that 
he  was  liable  for  the  amount  of  all  assessments  made  prior  to 
the  time  when  he  ceased  to  be  a  member,  and  that,  upon  his 
failure  to  pay,  an  action  would  lie  against  him  therefor.1 
But  because  of  the  small  amount  of  each  assessment,  the  cost 
of  collecting  it,  and  their  widely  scattered  membership,  such 
societies  do  not  ordinarily  seek  to  make  their  delinquent  mem- 
bers liable  for  assessments,  under  any  circumstances,  but  make 
rigid  provision  for  forfeiture  in  case  of  non-payment.  In  ordi- 
nary insurance  the  amount  which  the  insured  is  to  pay  is 
called  the  premium,  while  in  mutual  benefit  insurance  it  is 
called  an  assessment.  A  periodical  payment  of  a  certain  sum 
by  a  member  is  not  an  assessment  within  the  meaning  of  that 
term  as  used  in  insurance.2 

§  250.  Assessments  must  be  properly  levied,  and  for 
proper  purposes. — Assessments  inu3t  be  legally  made,  in 
order  that  the  failure  of  a  member  to  pay  them  shall  work  a 
forfeiture  of  his  rights  of  membership.  They  can  only  be 
valid  when  laid  under  the  conditions  stated  in  tin1  charter  and 
by-laws,  and  for  the  pin-poses  named  therein.  They  must  be 
made  in  strict  conformity  with  the  authority  given  to  the  so- 

1  McDonald  v.  Ross-Lewin,  29  Hun  *  Smith  v.  Brown,  27  N.  Y.  Supp. 
87;  Smith  v.  Brown,  27  N.  Y.  Supp.    11. 

11. 


474  ASSESSMENTS. 

ciety  in  the  charter  and  by-laws,  and  in  accordance  with  the 
contract  of  insurance.1  Even  a  more  equitable  mode  than  that 
provided  for  may  not  be  adopted.  Where  the  charter  author- 
izes the  directors  to  make  an  assessment,  it  can  be  made  only 
by  them.  Where  the  laws  of  the  society  authorize  directors 
to  make  assessments,  they  have  no  arbitrary  discretion  in  the 
matter,  but  are  controlled  by  the  explicit  provisions  of  the 
powers  delegated  to  them;  and  assessments  may  not  be  made 
unless  the  necessity  therefor  properly  and  legally  arises.2  The 
requirements  of  the  by-laws  of  a  mutual  benefit  society,  that 
all  assessments  shall  be  made  by  the  board  of  directors,  and 
that  the  chairman  shall  approve  all  proofs  of  death,  are  satis- 
fied when  the  secretary  and  treasurer  submits  a  notice  of  death 
to  a  meeting  of  the  board  which  directs  that  its  chairman 
shall  examine  the  proofs  when  they  shall  arrive,  and  if  found 
correct,  the  secretary  shall  issue  notices  of  assessment  thereon.3 
When  the  assessment  is  authorized  and  required  to  be  made 
by  the  directors  of  the  society,  it  is  not  invalid  because  the 
directors  who  made  it  were  personally  interested  therein  as 
members  of  the  society;  nor  because  one  director  was  absent 
when  it  was  made.4  Where  the  charter  gives  to  the  directors 
of  a  society  power  to  levy  assessments  upon  its  members  to 
pay  losses,  an  assessment  made  by  a  minority  of  the  directors 
is  invalid.  And  the  fact  that  the  majority  of  the  directors 
appointed  the  minority  as  a  committee  to  make  the  assessment, 
does  not  make  such  assessment  valid.6  When  the  by-laws  so 
provide,  the  board  of  directors  must  levy  the  assessment.6 

The  liability  of  the  member  is  conditional,  and  depends  upon 
the  contingency  of  death  losses,  and  the  incurring  of  expenses, 
to  which  he  is  liable  to  contribute,  which  have  been  duly  ascer- 
tained by  the  proper  officers,  and  which  make  necessary  a 

*Agnew  v.  A.    O.   U.  W.,  17   Mo.  3 Passenger    Conductors    v.    Birn- 

App.    254;    Susquehanna  Mutual  v.  baun,  116  Pa.  St.    565;  11  Atl.  Eep. 

Gackenbach,  115  Pa.  St.  492;  9  Atl.  378;  10  Cent.  Rep.  63. 

Rep.  go.  4  Williams  v.  German  Mutual,  68 

-  Farmers  Mutual  v.  Chase,  56  N.  111.  387. 

H.  341 ;  Thomas  v.  Whallon,  31  Barb,  5  Monmouth    M.    F.    Ins.     Co.    v. 

178;  Pacific  Mutual  v.  Guse,  49  Mo.  Lowell,  59  Me.  504. 

332;    Traders'    Mutual    v.    Stone,   9  6  Farmers'  Mutual  v.  Chase,  56  N. 

Allen,  483;  People's  Ins.  Co.  v.  Bab-  H.  341. 
bitt,  7    Allen,   235;    Rosenberger  v. 
Ins.  Co.,  87  Pa.  St.  207. 


ASSESSMENTS.  475 

resort  to  an  assessment  upon  the  certificate.  The  promise  of 
the  member  is  to  pay,  or  forfeit  his  membership,  upon  such 
conditions,  and  the  existence  of  these  conditions  must  be  estab- 
lished before  a  levy  of  an  assessment  is  valid  and  binding.  An 
assessment  made  in  good  faith,  upon  correct  principles,  and 
substantially  correct,  is  binding.1  All  assessments  made  pur- 
suant to  the  charter  and  by-laws,  or  to  the  constitution  and 
by-laws,  are  prima  facie  reasonable  and  valid.  The  right  to 
levy  assessments  or  dues  upon  members  of  the  society  is  gov- 
erned, to  some  extent  at  least,  by  the  occasion  for  them.2 
Where  the  rules  of  a  mutual  benefit  society  required  the  su- 
preme secretary,  when  t«he  benefit  fund  was  insufficient,  to 
notify  the  subordinate  secretaries  to  collect  a  fixed  assessment, 
it  was  held  in  an  action  on  a  certificate  of  insurance  issued  by 
such  society,  that  the  notice  from  the  supreme  secretary  was 
presumptive  proof  that  the  assessment  was  necessary,  since 
acts  done  by  a  corporation,  which  presuppose  the  existence  of 
other  acts  to  make  them  legally  operative,  are  presumptive 
proof  of  the  latter.3  The  levying  of  assessments  at  the  regu- 
lar meeting  of  the  directors,  or  other  proper  officers,  is  pre- 
sumably a  part  of  the  business  of  the  society,  and  no  notice  of 
an  intention  to  make  an  assessment  is  necessary,  unless  required 
by  the  charter  or  by-laws.  The  by-laws  may  authorize  the 
proper  officers  to  lay  an  assessment  at  a  meeting  called  for  that 
purpose.4  Where  a  table  of  rates  of  assessment  has  been  pub- 
lished by  a  society,  and  is  made  a  part  of  the  contract  of  insur- 
ance, the  assessment  must  be  made  in  strict  conformity  with 
the  prescribed  table,  and  the  board  of  directors  has  no  power 
to  change  these  rates  without  the  consent  of  the  insured  mem- 
ber.8 

§  251.     A   society   organized  as  a  corporation    under   the 

1  Marblehead  Ins.   Co.    v.    Under-  4  Ins.  Co.  v.  Sawyer,  12  Cvish.  64; 

wood,  3  Gray  210.  Fayette    Mut.     v.    Fuller,    8    Allen 

9  Pulford  v.  Fire  Department,  etc.,  (Mass.)  27. 

31  Mich.  458;  Hibernia,  etc.,  Co.  v.  6  York  County  Mutual  v.  Myers,  11 

Harrison,  93  Pa.    St.   264;  Rosenber-  Weekly  Notes  of  Cases  541;  see  At- 

ger  v.  Washington  Fire  Ins.  Co.,  87  lantic  Mutual  v.   Banders,   86  X.  H. 

Pa.  St.  207.  864;    Atlantic  Mutual  v.  Moody,  74 

3  Demings  v.  Supreme  Lodge,   131  Me.  3W3. 
N.  Y.  522;  30  N.  East.  Rep.  572;  re- 
versing, 14  N.  Y.  Supp.  834. 


476  ASSESSMENTS. 

laws  of  a  state  can  not  subject  itself  or  its  members  to  the 
jurisdiction  of  an  authority  existirg  outside  of  the  state  and 
beyond  the  control  of  its  laws.  A  grand  lodge  of  the  Ancient 
Order  of  United  "Workmen,  incorporated  under  the  laws  of 
the  state  of  Michigan,  can  not  compel  its  members  to  pay  as- 
sessments made  under  the  orders  of  a  supreme  lodge  incor- 
porated under  the  laws  of  Kentucky,  and  not  subject  to  the 
courts  of  Michigan;  nor  can  it  suspend  members  from  their 
privileges  as  such,  for  refusing  to  pay  such  an  assessment.  In 
discussing  this  subject  the  court  said :  "  The  relator  is  not  lia- 
ble to  pay  the  assessment.  It  is  not  competent  for  the  re- 
spondent to  subject  itself,  or  its  members,  to  a  foreign  author- 
ity in  this  way.  There  is  no  law  of  the  state  permitting  it, 
nor  could  there  be  any  law  of  the  state  which  would  subject  a 
corporation  created  and  existing  under  the  laws  of  this  state 
to  the  jurisdiction  and  control  of  a  body  existing  in  another 
state  and  in  no  manner  under  the  control  of  our  law.  The  at- 
tempt of  the  respondent  to  do  this  is  an  attempt  to  set  aside 
and  ignore  the  very  law  of  its  being."  l 

An  assessment  to  pay  losses  and  expenses,  where  the  char- 
ter authorizes  an  assessment  only  to  pay  losses,  is  invalid."  A 
vote  to  make  an  assessment,  leaving  the  amount  in  blank,  is 
invalid.3  An  assessment  is  not  invalid,  and  can  not  be  resisted 
on  the  ground  that  payment  of  the  claim  for  which  the  as- 
sessment is  made,  might  have  been  successfully  resisted  on 
technical  grounds,  and  ought  not  to  have  been  favorably 
passed  upon  by  the  board  of  directors.4 

An  assessment  laid  on  all  the  members  of  a  mutual  benefit 
society  to  pay  liabilities  for  losses  and  expenses,  part  of  which 
accrued  before  some  of  them  became  members,  is  valid  as  to 
the  old  members,  but  void  as  to  the  new  ones,  unless  the  con- 
tract of  insurance  provides  for  the  payment  of  all  assessments 
which  may  be  levied  after  the  issue  of  the  certificate  to  the 
member,  and  does  not  limit  the  liability  of  new  members  to 
such   losses  and  expenses  as  may  thereafter  accrue.5     If  the 

1  Lamphere  v.   United  Workmen,  3  Mutual  Ins.  Co.  v.  Paige,  1  Hilton 

47  Mich.   429;  see    State  ex    rel.   v.  (N.  Y.)  430. 

Miller,    66  Iowa  26;  23  N.  W.  Rep.  4 Sands  v.  Hill,   42  Barb.    (N.    Y.) 

241.  651. 

2Bersch  v.  Sinnissippi  Ins  Co.,  82  6  Ins.   Co.  v.  Houghton,  6  Gray  77; 

Ind.  61.  Eoswell  v.  Equitable  Aid  Union,  13 


ASSESSMENTS.  477 

contract  provides  that  an  assessment  shall  be  made  on  all 
members  upon  whom  the  degree  of  the  order  "  was  conferred 
on  or  prior  to  the  date  of  the  death  of  the  deceased  brother," 
the  word  "date''  has  application  to  the  entire  day,  and  a  mem- 
ber who  took  the  degree  in  the  evening  is  liable  to  assessment 
for  a  death  loss  which  took  place  on  the  morning  of  that  day.1 
Where  the  laws  of  the  society  require  that  an  assessment 
shall  be  levied  without  delay,  on  the  death  of  a  member,  a 
prolonged  delay  will  not  necessarily  vitiate  the  assessment 
when  made.  The  circumstances  attending  the  delay — a  con- 
troverted liability  upon  the  certificate,  a  litigation  to  determine 
the  rights  of  the  parties  thereunder,  and  similar  matters,  may 
be  shown  as  an  excuse  for  the  delay  in  levying  the  assessment.'' 
In  an  action  on  a  certificate,  where  the  defense  is  that  an  as- 
sessment Avas  not  paid  in  due  time,  the  burden  is  on  the  society 
to  show  a  duly  authorized  and  properly  levied  assessment. 
Where  the  payment  is  accepted  conditionally  by  the  society. 
the  payment  of  an  assessment  by  a  member  does  not  estop  the 
beneficiary  to  question  the  validity  of  the  assessment,  and  the 
burden  of  establishing  its  validity  is  on  the  societ}'.4  Where 
a  member  refused  to  pay  certain  assessments  which  he  sup- 
posed the  society  had  authority  to  make,  but  which  were  un- 
authorized and  invalid,  it  was  held  that  his  beneficiary  was 
entitled  to  recover  on  the  contract  after  his  death  upon 
payment  of  all  assessments  due.' 

?'  -i:>-l.  The  act  of  levying  an  assessment  is  ministerial. — 
In  making  assessments  upon  its  members,  a  society  acts  in  a 
ministerial,  not  in  a  judicial,  capacity.  No  presumption,  there- 
fore, arises  in  favor  of  the  regularity  or  legality  of  its  assess- 
ment. Every  fact  authorizing  an  assessment  to  be  made  must 
exist,  and  every  act  required  of  the  society  must  be  performed, 
before  i m  assessment  can  be  Levied,  which  a  member  musl  pay, 
or  forfeit  his  rights  of   membership.'1     It  may  he  stated,  as  a 

Fed.  Rep.  840;    Knights  v.  Supreme  'Shea    v.    Association,   160    M;is<. 

Commandery,  6  N.    V.    Supp.   427;  889;  35N.  East.  Rep.  855;  see§§322, 

Evarte    v.     Association,   16    N.    Y.  823. 

Supp.  '-'7.  '  Shea  v.  Association,  supra. 

1  Eaton  v.  Supreme  Lodge,  22  Cent.  Colby    v.    Lit'.-    Indemnity    Co. 

Law  Jour.  560.  (Minn.),  59  N.  \V.  Rep.  589. 

» People's   Ins.  Co.    v.    Allen,   10  'Hogan  ▼.  League,  99  Cal.  248;  83 

Gray  297.  Pac.  Rep.  924;    American  Mutual  v. 


478  ASSESSMENTS. 

general  proposition,  that  when  a  society  relies  upon  the  failure 
of  a  member  to  pay  an  assessment  as  a  forfeiture  of  his  member- 
ship and  the  benefits  thereof,  it  must  show  that  the  assessment 
was  made  by  the  proper  authority,  for  a  proper  purpose,  in 
the  manner  indicated  in  the  source  from  which  it  derives  its 
power  to  make  the  assessment,  and  in  accordance  with  the  con- 
tract of  insurance.1  The  contract  of  insurance  may  make  the 
records  of  a  society  levying  an  assessment  prima  facie  evi- 
dence of  the  legality  of  the  assessment  laid.  In  such  case,  the 
mere  introduction  of  the  records,  or  a  properly  certified  copy, 
showing  the  levy  of  an  assessment  upon  its  members,  and  proof 
of  the  non-payment  thereof,  will  cast  upon  the  party  suing 
upon  the  contract  the  burden  of  showing  that  because  of  some 
act  or  omission  of  the  society,  the  assessment  is  invalid,  or  that 
the  purpose  of  the  assessment  is  illegal."  The  law  or  contract 
may  also  provide  that  the  record  of  losses  kept  by  the  society 
shall  be s  prima  facie  evidence  that  such  losses  have  occurred.3 
It  has  been  held  with  much  force  of  argument,  and  upon 
well  founded  principles,  that  where  the  records  of  a  society 
show  that  an  assessment  was  made  upon  its  members,  and  that 
a  forfeiture  of  the  rights  of  a  member  was  declared  in  his  life- 
time for  the  failure  to  pay  it,  the  record  is  at  least  prima 
facie  evidence  in  respect  to  the  rights  of  the  beneficiary.4 

Helburn,  85  Ky.  1;  2  S.  W.  Rep.  495;  question,   otherwise    than   by   such 

8  Ky.  Law  Rep.  627.  copy;  and  that  said  certified  copy  of 

'American     Mutual    v.   Helburn,  the  record  was  sufficient  evidence  of 

supra;  Mut.    Ins.   Co.   v.  Houghton,  the  facts  therein  stated,  for  the  pur- 

6  Gray  77;  see  §  251.  poses  of  the  case,  without  any  further 

i  Williams   v.  German   Mutual,  68  evidence    of    such    matters.      It    is 

111.  387.  claimed  this  record  was  not  compe- 

3  People's  Ins.  Co.  v.  Allen,  10  Gray  tent  evidence  of  the  existence  of  the 

297;  Susquehanna  Mutual  v.  Gacken-  conditions  precedent  to  the  making 

bach,  115  Pa.  St.  492;  9  Atl.  Rep.  90.  of  the  assessments,  for  the  non-pay- 

4Bagley  v.  Grand  Lodge,  131  111.  ment  of  which  a  forfeiture  was  de- 
498;  22  N.  East.  Rep.  487.  The  court  clared.  Section  17  of  article  9  of  the 
said:  "  The  (instruction)  was  in  sub-  constitution  of  the  order  made  express 
stance,  that  it  was  not  necessary  for  provision  whereby  a  member  might, 
the  defendant  to  prove  the  deaths  at  his  option,  at  any  time  change  the 
of  members,  or  that  they  were  mem-  beneficiary  in  the  certificate  held  by 
bers  of  the  order,  or  any  other  mat-  him;  and  plaintiff  had  no  vested  in- 
ters set  forth  in  the  certified  copy  terest  in  the  certificate  of  the  de- 
of  the  record  of  the  grand  lodge  ceased  member,  under  whose  certifi- 
of   the  call  for  the  assessments    in  cate  she  claims,  before  the  death  of 


ASSESSMENTS. 


479 


Where  under  the  laws  of  a  society  the  duty  of  making  an 
assessment  is  imperative  under  certain  circumstances,  and  no 
form  or  mode  of  making  it  is  prescribed,  and  no  record  of  it 
is  required  to  be  kept,  it  is  not  necessary  that  such  assessment 
be  formally  made  by  the  society  or  that  it  be  entered  in  its  rec- 
ords, but  it  may  be  proved  by  parol  that  an  assessment  was 
actually  levied.1  In  such  a  case  there  being  no  established  rulo 
prescribing  how  an  assessment  shall  be  made,  any  action 
which  clearly  shows  an  intent  to  call  upon  the  members  to  pay 
the  stipulated  amount  into  the  benefit  fund  will  be  sufficient. 
The  notice  of  the  assessment  may  be  made  to  supply  all  the 
deficiencies  and  irregularities  of  such  an  assessment,  by  stating 
when,  where,  and  to  whom  it  may  be  paid.2 

§  253.  Custom  in  levying  assessments. — Where  the  pre- 
tended assessment  has  not  been  made  in  accordance  with  the 
provisions  of  the  constitution  of  the  society,  it  is  incompetent 
to  show  that  it  was  made  in  accordance  with  the  custom  of 
the  society,  unless  it  is  further  shown  that  the  member  who 
failed  to  pay  such  pretended  assessment  had  knowledge  of  the 
custom.3 

was  in  good  standing  when  he  died, 
and  also  of  showing  every  dollar  paid 
into  the  beneficiary  fund,  and  paid 
out  of  that  fund,  during  the  same 
period  of  time.  All  this  would  be 
necessary  in  order  to  show  what 
moneys  had  been  received,  and  what 
payments  had  been  made,  by  reason 
'of  which  the  beneficiary  fund  had 
fallen  below  $2,000,  and  a  new  assi  ss- 
iintit  thereby  justified  under  the 
laws  and  regulations  of  the  order. 
The  record  of  the  association  is  at 
least  prima  facie  evidence  in  respect 
to  tin*  rights  of  its  members,  but 
probably  subject  to  contradiction  by 
proof  of  fraud,  mistake,  or  other 
matter  in  rebuttal." 

(Backdahl  v.  Grand  Lodge,  46 
Minn.  61;  48  X.  W.  Rep.  454. 

-Marsh  v.  Burroughs,  1  Woods  163; 
Citizens'  Ens.  Co.  v.Sortwell,  lOAllen 
111):  Fox  v.  (  ompany.  40  Ind.  81; 
Rutland  v.  Tin-all.  85  Vt  856. 

Underwood   v.   Iowa    Legion    of 
Honor,  60  Iowa  lo4. 


such  member.  The  assessments  and 
the  record  were  made,  and  the  cause 
of  forfeiture  accrued,  and  the  forfeit- 
ure was  declared,  in  the  lifetime  of 
the  deceased.  He  being  a  member 
of  the  association,  the  records  made 
by  it  were  evidence  against  him. 
The  assessments  were  against  him, 
and  it  was  his  right  which  was  for- 
feited, if  there  was  any  lawful  for- 
feiture, and  not  any  right  which  was 
vested  in  plaintiff,  and,  if  the  forfeit- 
ure was  valid,  no  right  ever  did  vest 
in  plaintiff.  If  the  theory  of  plaint- 
iff i>  correct,  and  it  is  required  of 
defendant  to  establish,  in  the  first  in- 
stance, otherwise  than  by  its  record, 
and  by  direct  and  affirmative  testi- 
mony all  the  conditions  precedent 
to  the  call  of  the  assessments,  then  the 

burden  would  be   imposed  upon  it  of 

producing  the  witnesses  to  prove  the 
death  of  every  member  who  had  died 
since  the  incorporation  of  the  order 
whose  beneficiary  certificate  had  been 

paid,  and  that  every  such  member 


480  ASSESSMENTS. 

§  254.  Assessment  for  reserve  fund. — The  society  stands 
in  the  relation  of  agent  and  quasi  trustee  for  its  members, 
and,  as  such,  it  is  burdened  with  certain  duties.  It  is 
obviously  the  duty  of  the  officers  of  the  society  to  observe 
and  perform  with  care  all  the  requirements  of  the  laws,  rules 
and  regulations  of  the  society  and  the  provisions  of  the  certif- 
icate of  membership,  relative  to  the  levying  of  an  assessment, 
so  that,  whether  the  burden  of  proof  in  the  matter  be  upon 
the  society  or  its  adversary,  in  a  legal  proceeding,  it  can  easily 
and  certainly  be  shown  that  they  have  done  all  that  the  soci- 
ety has  by  law  or  contract  been  required  to  do  and  perform, 
and  that  the  assessment  is  for  a  proper  purpose. 

An  assessment  for  an  improper  and  unnecessary  purpose  is 
invalid,  but,  in  determining  what  are  proper  and  necessary 
purposes  for  which  a  mutual  benefit  society  may  levy  an 
assessment,  the  laws  and  contracts  governing  the  society 
should  receive  a  liberal  construction.  But  where  such  a  soci- 
ety is  not  inhibited  by  its  charter  it  still  has  no  right  to  pro- 
vide, in  its  by-laws  and  contracts,  for  the  accumulation  of  a 
reserve  fund.1  While  it  is  not  intended  that  such  associations 
shall  become  great  financial  institutions  with  growing  accumu- 
lations and  holdings  of  large  sums  of  money  and  investment 
securities,  it  is  still  proper  that  they  should  strengthen  their 
financial  ability  to  pay  large  losses  in  unusual  emergencies, 
when  authorized  so  to  do  by  its  charter.  The  legislatures  of 
several  states,  recognizing  the  propriety  of  a  reserve  fund  in 
such  societies,  have  passed  laws  providing  for  such  a  fund,  and 
regulating  its  management,  investment  and  disposition.  Cer- 
tainly, no  just  reason  presents  itself  why  such  societies  should 
not  be  permitted  to  hold  a  reserve  or  guarantee  fund  for  the 
protection  of  its  members.  The  board  of  directors,  or  other 
officers  charged  with  the  management  of  the  affairs  of  a  society, 
must  of  necessity  be  permitted  to  exercise  their  discretion  to  a 
great  extent  in  the  management  of  the  reserve  fund;  and  where 
such  fund  has  not  exceeded  any  limit  which  the  law  may 
have  placed  upon  the  amount  which  may  be  held  as  a  reserve, 
it  must  be  left  to  the  discretion  of  such  officers,  whether  they 
will  pay  a  loss  in  whole  or  in  part  from  this  fund,  or  levy  an 

1  Kennan  v.  Bundle  (Wis.),  51  N.  W.  Rep.  426;  Rundle  v.  Kennau,  81 
Wis.  212;  48  N.  W.  Rep.  516. 


ASSESSMENTS.  4S1 

assessment  upon  the  members  to  pay  it.  The  idea  of  a  reserve 
fund  imports  permanency  to  some  extent,  and  if  losses  were 
required  to  be  paid  out  of  this  fund,  as  they  occurred,  the 
fund  would  soon  be  depleted  and  destroyed,  and  the  very  ob- 
ject for  which  it  was  created  would  be  defeated.  A  member 
can  not,  therefore,  insist  that  the  amount  of  money  held  in  the 
reserve  fund  shall  be  applied  to  the  payment  of  losses,  before 
he  be  required  to  pay  his  assessment.  The  officers  of  the  soci- 
ety may  use  a  part  or  all  of  the  fund  to  pay  death  losses,  but 
they  can  not  be  compelled  to  do  so.  It  is  in  their  discretion 
to  hold  the  reserve  fund,  and  lay  an  assessment  to  pay  the 
loss.1  The  validity  of  an  assessment  is  not  affected  by  the 
fact  that  the  benefit  has  already  been  paid,  where  the  payment 
w^as  made  out  of  the  reserve  fund  created  by  initiation  fees 
under  authority  of  the  charter,  and  the  assessment  is  levied  to 
reimburse  such  fund.2 

§  255.  Assessment  in  anticipation  of  losses. — In  order  to 
determine  whether  assessments  may  be  made  in  advance  and 
in  anticipation  of  losses,  it  is  necessary  to  look  to  the  pro- 
visions of  the  contract  of  insurance — the  charter,  by-laws  and 
certificate  of  membership.  Where  the  contract  provides  that, 
upon  the  death  of  a  member,  the  directors  shall  examine  into 
the  loss,  and,  if  they  shall  find  the  claim  of  the  beneficiary  of 
the  member  to  be  valid  against  the  society,  they  shall  levy  an 
assessment  upon  the  members  to  pay  the  claim,  no  assessment 
may  be  made  in  anticipation  of  losses.3  When  the  laws  of  the 
society  do  not  authorize  an  assessment  unless  the  amount  in 
the  treasury  is  less  than  a  certain  stated  sum  of  money,  and 
there  is  more  than  that  amount  in  the  treasury,  an  assessment 
may  still  be  levied,  if  orders  have  been  drawn  against  the 
fund  to  pay  death  losses,  sufficient  when  paid  to  reduce  the 
amount  below  that  sum.  It  is  not  necessary  in  such  a  case  to 
await  payment  of  the  outstanding  orders.  Since  the  money 
has  been  appropriated  to  the  payment  of  certain  claims,  it  is 

1  Crossman  v.    Mass.   Mutual,  143  Pac.  Rep.  924:  Thomas  v.  Whallon, 

Mass.  435;  9  N.  East.  Rep:  753;   3  N.  31    Barb.    (N.    Y.)    172;    Ins.    Co.    v. 

Eng.  Rep.  517.  Schmidt,  19  Iowa,  502;  Pacific    Mu- 

8  McGowan  v.  Supreme   Council,  tual  v.  Guse,  49  Mo.  829;  Rosenberger 

28  N.  Y.  Supp.  177.  v.  Washington  Fire  Ins.  Co.,  87  Pa. 

8Hogan  v.  League,  99  Cal.  248;  33  St.  207. 
31 


482  ASSESSMENTS. 

not  in  the  treasury  so  as  to  prevent  an  assessment  to  provide 
for  the  payment  of  a  further  claim  which  has  been  allowed.1 

§  256.  Effect  of  the  levy  of  an  assessment  to  pay  a  death 
loss. — The  mere  levy  of  an  assessment  by  a  society  upon  its 
members  to  pay  a  death  loss,  unaccompanied  by  any  act  rec- 
ognizing the  validity  of  the  contract  of  insurance,  is  not  a 
waiver  of  a  forfeiture  which  has  been  worked  in  such  con- 
tract; and  the  fact  that,  after  the  death  of  the  member,  the 
other  members  paid  into  the  treasury  of  the  society  their  vol- 
untary assessments  to  meet  the  amount  of  the  insurance, 
gives  the  beneficiary  no  additional  rights.2 

§  257.  Notice  of  assas.iinent. — In  beneficiary  associations, 
where  the  time  and  frequency  of  payments  depend  on  the 
mortality  of  members,  and  payment  is  to  be  made  only  upon 
notice  that  an  assessment  is  required,  no  liability  is  imposed 
on  a  subordinate  lodge,  or  a  member  of  the  society,  until  due 
notice  in  conformity  with  the  laws  of  the  order  or  society  is 
given.  The  giving  of  notice  is  a  condition  precedent,  and 
good  standing  is  not  lost  by  a  failure  to  pay  an  assessment  of 
which  no  notice  was  given  through  the  fault  or  misconduct  of 
a  supreme  lodge  or  society,  or  its  officers.3  The  giving  of  the 
notice  being  a  condition  precedent,  the  facts  showing  that  the 
notice  provided  by  the  contract  of  insurance  has  been  given, 
should  be  set  out  in  pleading,  and  proved  at  the  trial,  and  an 
averment  that  legal  notice  of  the  assessment  was  duly  given 
is  a  conclusion  of  law  and  insufficient.4  Where  the  only 
means  which  a  subordinate  lodge,  or  a  member  of  a  benefit 
association  has  of  knowing  when  an  assessment  is  due  to  the 
order  or  association,  is  by  a  notice  from  the  supreme  lodge  or 
governing  body,  unless  notice  is  given,  no  rights  are  lost. 
When,  in  the  contract,  a  notice  is  provided  for,  and  not  given, 
no   tender  of  the  amount  of   any  assessment  is  necessary  in 

1  Eaton  v.  Supreme  Lodge,  22  Cent.  Rep.  450;  Agnew  v.  A.  O  U.  W.,  17 
Law  Jour.  560.  Mo.  App.  254;   Castner    v.  Farmers' 

2  Swett  v.  Citizens  Mutual,  78  Me.  Ins.  Co.,  50  Mich.  273;  15  N.  W.  Rep. 
541;  7  Atl.  Rep.  394;  Mayer  v.  Equi-  452;  Bates  v.  Mut.  Ben.,  47  Mich.  646; 
table  Reserve  Fund,  42  Hun  (N.  Y.)  Gellatly  v.  "Mut.  Ben.,  27  Minn.  215; 
237;  Bock  v.  A.  O.  U.  W.,  75  Iowa,  6  N.  W.  Rep.  627;  Covenant  Mut.  v. 
462;  39  N.  W.  Rep.  709.  Spies,  114  111.  463;  Mulroy  v.  Knights 

3  True  v.  Association,   78  Wis.  287;  of  Honor,  28  Mo.  App.  463. 

47  N.  W.  Rep.  520;  Farrie  v.  Supreme       4Coyle  v.  Kentucky  Grangers  (Ky.), 
Council,  15   N.  Y.  St.  Reporter,  155;    2  S.  W.  Rep.  676. 
Hall  v.  Sup.  Lodge  K.  of  H.,  24  Fed. 


ASSESSMENTS.  .483 

order  to  prevent  a  forfeiture  of  membership.  A  member  is 
entitled  to  notice  of  an  assessment,  before  he  can  be  declared 
in  default  for  his  non-payment.'  Although  the  charter  pro- 
vides for  a  forfeiture  where  the  member  has  failed  to  pay 
within  thirty  days  after  notice  has  been  "served  on  him  or 
sent  to  him,"  the  time  does  not  begin  to  run  until  he  has  had 
actual  notice.  An  allegation  by  the  society  that  "  it  sent  him 
notice"  on  a  certain  day,  and  that  "he  received  the  same," 
does  not  allege  the  time  at  which  he  received  the  notice,  and 
is.  therefore,  not  sufficient  to  show  that  there  was  a  forfeit- 
ure.3 Where  the  contract  provides  that  notice  of  assessments 
shall  be  sent  by  the  supreme  council  to  the  assessment  col- 
lectors of  subordinate  councils,  who  shall  notify  the  members; 
that  the  notice  to  members  shall  bear  the  date  of  the  notice 
to  assessment  collectors;  and  that  unless  a  member  pay  the  as- 
s  -vsment  within  forty  days  from  the  date  of  the  notice  he  shall 
stand  suspended,  the  member  is  entitled  to  actual  notice  of  the 
assessment  before  his  rights  can  be  forfeited  for  non-pavment.s 

Where  a  contract  provides  that  it  shall  be  forfeited  and  void, 
unless  payment  of  an  assessment  is  made  within  thirty  days 
from  date  of  notice  thereof,  there  must  be  actual  notice  to  the 
member  of  the  assessment  before  a  forfeiture  will  result  from 
non-payment.4  Where,  under  such  a  contract,  a  notice  which 
has  been  sent  by  mail,  is  received  at  the  house  of  the  member 
while  he  is  so  ill  as  to  be  unable  to  understand  or  transact  any 
business,  and  he  so  remains  until  his  death,  no  forfeiture  arises, 
since  the  provision  requires  actual  notice  to  the  member.' 
The  essential  requisite  of  actual  notice  is  information.6 

The  charter  of  a  society  provided  that  members  were  to  be 

•Hall  v.  Supreme   Lodge,   24  Fed.       'Courtney  v.  Association,  supra. 
Eep.  450;  Covenant  Mutual   v.  Spirs,      6  Knights  v.    Siipr.Mii.-  Council,   <i 

114  111.463:  Supreme  Lodge  v.  Dal-  X.  Y.  Supp.  4:27:  Supreme  Lodge  v. 

berg,   188  111.  508;  28  N.  East.  Rep.  Wickser,  72  Texas  257;   Taggart   v. 

785.  Association.  8  Pa.  Co.  334:  Schmidt 

•American   Mutual  aid  Societyv.  v.  German  Mutual,  4  Ind.  App.  :i40: 

Quire,  8  Ky.  L.  Rep.  101.  30  N.    East.   Rep.  730;  Merriman  v. 

'People v.  Supreme  Council,  ION.  Association,  188    N.  Y.    116;    :'<■',   X. 

Y.  Supp.    248;   Supreme    Lodge   v.  East.   Rep.  7:;s:   affirming  is  x.  Y. 

Johnson.  7s  iml.  110.  Sup]..  805;  Benedict  v. Grand  Lodge, 

•Courtney   v.    association   (Iowa),  4s  Minn.  471;  51  X.  W.  Rep.  871, 
53  X.  W.  Rep.  288;   Supreme  Lodge 
v.  Dalberg,  138  111.  508. 


4S4  ASSESSMENTS. 

"  notified  by  the  society  or  otherwise,  either  by  circular  or 
a  verbal  notice "  of  assessments  made  upon  them  for  losses, 
and  that,  if  they  did  not  pay  within  sixty  days,  their  rights 
under  their  policies  should  be  forfeited.  In  construing  this 
clause  of  the  charter,  the  court  said :  "  Was  the  fact  of  mail- 
ing the  paper  which  contained  the  information  for  the  member 
sufficient  of  itself  to  constitute  the  notification  required  by  the 
charter  ?  The  proposition  here  is  that  it  makes  no  difference 
whether  the  member  ever  gets  knowledge  of  the  assessments 
upon  him  or  not,  provided  notice  is  regularly  mailed  to  him, 
and,  therefore,  the  contention  is  to  be  viewed  on  the  assump- 
tion that  he  does  not  get  it.  *  *  The  destruction  of  a  mail, 
or  accidents  preventing  the  delivery  of  matter,  or  even  a  con- 
siderable delay,  might  at  any  time,  without  fault  of  the  per- 
sons insured  eventuate  in  widespread  loss  and  injustice.  '  No 
construction  open  to  so  much  objection,  should  be  admitted 
unless  rendered  necessary  by  the  terms  of  the  charter;  and 
they  do  not  require  it.  On  the  contrary,  they  contemplate 
that  the  members  shall  have  real  information  of  the  assess- 
ment. The  provision  is  not  that  notice  or  information  shall 
be  mailed  or  sent  or  forwarded.  The  members  are  to  be  '  no- 
tified,' that  is,  informed;  to  have  made  known  to  them  the 
fact  of  the  assessment;  and  this  is  permitted  to  be  done  either 
by  oral  statements  to  the  members,  or  by  delivery  to  them  of 
written  statements  through  the  agency  of  the  postoffice  or 
some  other." '  "Where  the  contract  of  membership  provides 
that  "  any  member  who  shall  refuse  or  neglect  to  pay  all  as- 
sessments and  who  having  been  notified  by  the  secretary  of 
his  indebtedness,  shall  still  neglect  or  refuse  for  sixty  days 
after  receiving  said  notice  to  cancel  his  indebtedness,  shall  be 
dropped  from  the  roll  of  membership,"  the  secretary  has  no 
right  to  drop  a  delinquent  member  from  the  roils  unless  he 
has  received  actual  notice  of  his  delinquency.2 

§  258.  Where  the  by-laws  require  written  notice  of  an  as- 
sessment to  be  given,  proof  of  any  other  notice  is  properly 
excluded.3  A  notice  must  in  its  essential  features  conform  to 
the  law  or  to  the  contract  under  which  it  is  given.4     Notice 

'Castner  v.  Farmers'  Mutual,  50       3  Dial  v.  Valley  Mutual,   29  S.  C. 

Mich.  273;  15  N.  W.  Rep.  452.  560;  8  S.  E.  Rep.  27. 

2  People  v.    Association,  8  N.  Y.       4  Phelan  v.  Ins.  Co.,  113  N.  Y.  147; 

Supp.  675.  reversing  42  Hun  419;   Mueller  v.  U. 


ASSESSMENTS.  485 

of  assessment  should  not  be  given  until  the  assessment  has 
been  made.1  If  the  assessment  be  properly  levied,  but  no 
proper  notice  thereof  be  given,  no  forfeiture  is  incurred  by 
failure  to  pay  it.2  ^Notice  from  the  secretary  of  a  mutual 
benefit  society  is  notice  from  the  society,  and  the  society  is 
bound  by  the  act.3  A  notification  to  pay  an  assessment  to  a 
certain  specified  officer,  whose  address  is  given,  must  be  com- 
plied with;  and  no  other  person,  in  the  absence  of  any  pro- 
vision of  the  contract  of  insurance  to  the  contrary,  has  the 
legal  right  to  accept  or  decline  to  receive  assessments,  so 
as  to  bind  the  society  to  the  consequences  of  such  acceptance 
or  refusal.4  Where  a  member  is  to  make  pa}rment  of  an  as- 
sessment within  thirty  days  from  date  of  notice  thereof,  the 
day  on  which  he  receives  the  notice  will  be  excluded.5  The 
charter  of  a  society  provided  that  "  any  member  failing  to 
pay  his  assessment  within  thirty  days  from  the  date  of  the 
notice,  shall  forfeit  his  membership.'"  In  a  suit  upon  one  of 
its  contracts,  it  was  shown  that  notice  of  the  assessment  was 
received  by  the  member  on  October  31,  18S2.  The  amount 
of  the  assessments  due  was  tendered  to  the  association  on 
December  1,  1882,  and  the  association  declined  to  receive  it. 
The  court  held  that,  in  computing  the  time  within  which  the 
money  should  have  been  paid,  the  day  on  which  the  notice 
was  received  by  the  member  should  be  excluded,  that  the 
money  should  have  been  paid  prior  to  the  close  of  business 
hours  on  November  30,  1882,  and  that  the  association  had  a 
right  to  decline  to  receive  tiie  amount  of  the  assessments  ten- 
dered  on  December  1, 1882. s  A  by-law  requiring  a  certain  form 
of  notice  of  assessments  to  be  given  to  members  under  a  cor- 
porate or  official  seal,  and  providing  that  no  paper  issued  by 
authority  of  the  society  should  be  official  unless  thus  sealed. 
may  be  waived,  and   the   evidence  is   sufficient   to  wan-ant  a 

S.  Association,  51  111.   App.  40;  War-  4  Lazensky  v.    Supreme  Lodge  K. 

nerv.  National  Life  (Mich.),   58  N.  of  H.,  3  N.  Y.   Sup.  52;  19  N.  Y.  St. 

W.  Rep.  687.  Rep.  7'.t.->. 

1  Bangs  v.  Mcintosh,   23  Barb  (X.  5  Protection  Life  v.  Palmer,  81  111. 

Y.i.-,<)1.  88;  Wet  more  v.    .Mutual    Aid,  28  La. 

■  Frey  v.  Mutual  Ins.  Co.,  43  U.  C.  Ann.  770. 

(Q.  B.)  102.  Nat  kraal  Mutual  v.  Miller.  85  Ky. 

3  Olmstead   v.    Farmers'     Mutual,  88;  2  S.  W.  Rep.  900;  see  §  205. 
50  Mich.  200. 


4S6  ASSESSMENTS. 

finding  of  a  waiver  when  it  establishes  an  unbroken  usage 
for  years  on  the  part  of  the  society  to  give  notices  not  so  sealed, 
and  on  the  part  of  all  its  members  to  treat  such  notices  as 
sufficient.1 

§  259.  The  fixing  of  a  precise  time  within  which  notices 
are  to  be  sent  to  members  can  have  no  other  purpose  than  to 
secure  promptness  in  collecting  assessments.  Hence,  the  re- 
quirement as  to  the  time  within  which  notices  shall  be  sent  is 
to  be  construed  as  being  in  its  nature  directory,  and  not  es- 
sential.2 In  the  case  of  Ancient  Order  United  Workmen  v. 
Moore,3  the  principle  is  laid  down  that  if  ample  notice  is  given, 
it  is  not  necessary  that  the  full  time  allowed  by  the  charter 
shall  intervene  between  the  date  of  the  assessment  and  the 
suspension  of  the  rights  under  the  benefit  certificate.  The 
constitution  of  a  society  provided  that  "  written  notices  of  as- 
sessment shall  be  made  and  sent  by  the  financiers,  bearing 
date  of  not  later  than  the  8th  of  the  month,  in  which  the  no- 
tice was  issued  by  the  supreme  recorder,  twenty  days  from 
the  date  of  such  notice  by  the  financier,  and  not  later  than  the 
2Sth  day  of  said  month  in  which  said  notice  of  assessment  was 
given,  any  member  holding  a  certificate  of  the  beneficiary 
fund,  having  failed  or  neglected  to  pay  such  assessment  into 
the  beneficiary  fund,  in  his  subordinate  lodge,  shall  forfeit  all 
his  rights  under  such  certificate."  The  court  sa}rs  :  "  Although 
the  notice  required  to  be  given  by  the  financier  was  not  sent 
until  the  9th  or  10th  of  February,  there  was  ample  time,  after 
it  was  sent,  to  pay  the  assessment  before  the  28th,  and  the  law 
required  it  to  be  paid  on  that  day,  although  there  was  not 
twenty  days  between  the  day  the  notice  was  sent,  and  the  28th 
day  of  the  month."  But  in  such  a  case  as  this,  if  the  member 
were  to  die  immediately  after  the  28th  of  the  month,  the 
question  would  become  important  whether  the  twenty  days 
within  which  payment  should  be  made  runs  from  the  8th  of 
the  month  or  from  the  time  of  receiving  the  notice. 

§  260.  Notice  by  mail. — Where  notice  through  the  mails 
is  relied  on,  it  must  clearly  be  shown,  both  in  pleading  and 
evidence,  that  the  communication  was  placed  in  the  post  office, 

1  Heffernan  v.  Supreme  Council,  3 1  Ky.  L.  Rep.  93;  Court  of  Appeals 
40  Mo.  App.  605.  of  Kentucky. 

-  Benedict  v.  Grand  Lodge,  48  Minn. 
471;  51  N.  W.  Rep.  371. 


ASSESSMENTS. 


48  T 


properly  directed,  and  stamped  according  to  law.1  Where  such 
notice  is  relied  on,  it  is  not  sufficient  to  show  that  three  per- 
sons, members  of  the  same  family,  were  also  members  of  the 
society,  and  that  three  notices  were  placed  in  one  envelope, 
and  directed  to  another  of  the  three  than  the  deceased.2 
Where  the  by-laws  of  a  society  provide  for  notice  of  assess- 
ments due,  before  there  shall  be  a  forfeiture  of  benefits,  notice 
mailed  to  a  member  is  not  sufficient  to  sustain  a  forfeiture, 
without  proof  that  it  reached  him.3  Where  a  party  is  entitled 
to  notice,  and  has  not  stipulated  to  have  it  transmitted  b}T 
mail  or  otherwise,  he  is  not  bound  by  any  notice  until  it  is  act- 
ually received  by  him.4  Where  the  contract  of  insurance  pro- 
vides that  a  notice  of  assessment  shall  be  transmitted  by  mail 
by  the  society  to  the  member,  a  change  of  residence,  not  made 
known  to  the  society,  is  without  effect  upon  it.  The  society 
performs  its  duty  when  it  sends  a  notice  of  assessment  to  the 
address  of  the  member  as  made  known  to  it,  and  the  notice  is 
complete  on  the  mailing  of  it.5 

^Vhere  the  officers  of  a  society  testify  that  notices  of  a  cer- 
tain assessment  were  sent  out  as  usual,  and,  that  they  presume 
that  one  was  sent  to  a  certain  member  who  has  since  died,  but 
they  do  not  profess  to  remember  as  a  fact  that  such  a  notice 
was  sent  to  him,  or  to  have  any  record  of  the  fact  to  confirm 
an  impression  based  simply  on  their  ordinary  course  of  pro- 
ceeding, the  liability  to  accidental  omission  in  sending  a  large 
list  of  notices  is  too  great  to  justify  a  court  or  jury  in  giving 
to  such  testimony  sufficient  weight  to  find  therefrom  that  such 
notice  had  been  sent,  when  it  also  appears  from  the  evidence 
thai  all  other  notices  sent  by  them  had  been,  but  that  this  one 
had  certainly  not  been  received  by  the  deceased.     Where  it  is 

1  N.  W.  Association  v.  Schauss,  148  ner  v.  Farmers'  Mutual.  ■"><>  Mich.  273: 

III.  804;  35  N.  E.  Rep.  747:  Haskins  Supremo  Lodge  v.  Johnson,  78  Ind. 

v.  Society,  7  Ky.  Law  Rep.  871.  210:    Merriman   v.  Association,   138 

*Garretson  v.  Equitable  Mutual,  74  N.Y.116,83N.  East.Rep.  138,  affirm- 

Iowa  H9;  38  N.  W.  Rep.  127:  see  Car-  ing  18  N.  Y.  Supp.  805;  Shea  v.  Asso- 

butt  v.  Association,  K4  Iowa   298;  51  ciation,    160    Mass.   389;    85  N.  Bast. 

N.  W.  Rep.  148.  Rep.    855;    N.     W.   Association    v. 

M. •<  lorkle  \.  Association,  71  Texas  Schauss.  1 1*  111.  304;  35  N.  Mast.  Rep. 

14'.):    8  S.   W.    Rep.   516;  Supreme  747. 
Lodge  v.  Dalberg,  37  111.  App.  145.  5Lothrop    v.     Ins.     Co..   2     Allen 

'McCorlvle  v.  Association,  supra;  (Mass.)  82;  Forse  v.  Supreme  Lodge, 

Durhans  v.  Corey,  17  .Midi.  288;  Cast-  41  Mo.  App.  107. 


488 


ASSESSMENTS. 


shown  that  all  notices  of  assessments,  except  the  one  in  ques- 
tion, reached  their  destination,  and  that  it  certainty  did  not,  a 
presumption  arises  that  no  notice  was  sent,  and  this  presump- 
tion is  not  overcome  by  general  testimony  of  the  ordinary 
course  of  proceeding  in  sending  the  notice  from  the  office. 
But  in  such  a  case  the  jury  must  pass' upon  the  question  of 
notice.1 


1  Gunther  v.  Aid  Association,  40 
La.  Ann.  777;  5  Southern  Rep.  65; 
N.  W.  Association  v.  Schauss,  148 
111.  304:  35  N.  East.  Rep.  747;  Hast- 
ings v.  Ins.  Co.,  138  N.  Y.  473;  34  N. 
East.  Rep.  289.  In  Jackson  v.  N.  W. 
Mutual  Relief  Association,  78  Wis. 
463,  47  N.  W.  Rep.  733,  it  was  said: 
"The  testimony  that  this  package 
was  never  received  by  Mrs.  Jackson 
or  the  plaintiff  (her  husband,  Wm. 
T.  Jackson)  seems  to  have  been  quite 
positive.  The  fact  that  it  was  not 
received  is  strong  evidence  that  it 
was  not  sent.  The  by-laws  of  the 
company  required  that  such  notices 
should  be  sent  to  tbe  address  of  the 
insured  as  found  upon  the  books;  and 
the  address  in  this  case  was  Cordelia 
Jackson,  care  of  William  T.  Jackson. 
The  secretary  of  the  company  testi- 
fied that  it  was  his  habit  to  send 
notices  according  to  the  address  on 
the  books,  but  that  he  had  sometimes 
sent  them  addressed  to  tbe  person  in 
whose  care  they  were  required  to  be 
sent,  if  such  person  was  the  husband 
of  the  insured,  to  save  time,  and  it 
appears  tbat  he  had  done  so  in  some 
cases,  and  that  he  had  sent  notices 
relating  to  this  insurance  directly  to 
the  husband.  The  secretary  was  un- 
able to  testify  how  this  notice  was 
actually  addressed,  whether  to  Cor- 
delia Jackson  alone,  to  her  in  care  of 
her  husband,  or  to  him  alone.  He 
had  no  recollection  on  the  subject. 
There  was  no  proof  whatever  that  it 
was  addressed  to  Cordelia  Jackson, 
the  only  proper  person  to  whom  it 


could  have  been  lawfully  sent.  The 
entire  absence  of  testimony  that  the 
notice  was  directed  to  Mrs.  Jackson 
is  as  fatal  to  the  notice  as  if  it  had 
not  been  sent  at  all.  The  testimony  as 
to  the  depositing  of  the  notice  in  the 
postoffice  is  presumptive,  rather  than 
positive.  The  secretary,  by  the  aid 
of  another,  made  out  notices  of  the 
assessment,  as  he  testified,  to  all 
members  in  good  standing,  and 
placed  them  in  a  cupboard.  He 
afterward  compared  them  with  the 
list  of  such  members.  They  were 
then  placed  in  a  trunk  or  box,  and  an 
agent  of  the  company  went  with  it 
as  it  was  conveyed  to  tbe  postoffice, 
and  saw  them  delivered,  and  he  then 
signed  the  list  on  the  books,  to  indi- 
cate their  delivery  at  the  postoffice. 
No  person  was  able  to  testify  that 
this  notice  was  one  of  those  delivered, 
or  that  Cordelia  Jackson  was  one  of 
such  members  in  good  standing,  from 
actual  view  or  inspection.  It  may 
perhaps  be  presumed  that  she  was 
one  of  such  members;  but  against 
such  presumption,  is  the  fact,  that 
she  never  received  such  notice.  *  * 
*  It  follows,  therefore,  that,  in 
making  the  list  of  members  in  good 
standing,  it  is  at  least  possible  that 
some  of  them  may  be  omitted,  by 
mistake  or  oversight,  and  that  Cor- 
delia Jackson,  in  this  instance,  might 
possibly  have  been  omitted.  Do  not 
these  facts  overcome  the  presump- 
tion that  she  was  one  of  the  members 
in  good  standing  to  whom  a  notice 
was  made  out  and  sent?    It  is  suffi- 


ASSESSMENTS.  4S9 

The  by-laws  of  a  society  provide  that  the  secretary  shall  give 
notice  of  assessments  and  of  annual  dues,  "  sending  all  such 
notices  by  mail  to  the  last  given  postoffice  address  of  each 
member,  which  shall  be  considered  a  legal  notice."  In  con- 
struing this  by-law  the  court  said  :  "  It  is  quite  clear  that  (the 
member)  was  bound  by  the  by-laws  and  that  the  by-laws  made 
the  sending  by  mail  a  legal  and  sufficient  notification  whether 
in  fact  the  notice  was  ever  received  or  not.  The  conventional 
mode,  if  followed,  would  be  just  as  valid  and  effective  to  fix 
the  rights  of  the  parties  in  the  one  event  as  the  other.  There 
is  nothing  of  harshness  or  unfairness  in  these  terms.  The  great 
mass  of  commercial  and  financial  business  of  the  country  is 
done  through  the  mail,  and  it  is  not  an  unreasonable  condition 
that  notice  so  sent  should  be  considered  duly  served,  and  the 
parties  having  made  this  one  of  the  conditions  of  their  contract, 
should  be  required  to  abide  by  it." '  Where  the  contract  pro- 
vides that  notice  of  an  assessment  shall  be  sent  by  mail  to  each 
member  at  his  last  or  usual  place  of  residence  or  business,  it  is 
not  sufficient  to  show  merely  that  a  notice  was  mailed  to  a 
member,  but  it  must  be  made  to  appear  either  that  the  notice 
was  properly  addressed  or  that  it  was  actually  received  by 
him.3 

cient  that  it  renders  such  fact  uncer-  Baekdahl,  hut  he  swore  to  sending 

tain,   and  the  testimony  unreliable  notices  of  this  particular  assessment 

and  unsatisfactory.     Both  of  these  to  all  of  the  members  of  the  lodge, 

questions  were  taken  from  the  jury,  as  he  supposed,  and  as  lie  evidently 

It   is   sufficient   that   the   testimony  intended  to  do,   including  notice  to 

was    not    so  conclusive  upon   these  Backdalil.  it  he  was  not  overlooked. 

questions  as  to  warrant  the  court  in  From  this  the  jury  might  find  that 

instructing  the  jury  that  notice  of  notice  was  sent  to  Baekdahl."     Skil- 

said   assessment   had  been  given  to  beck  v.  G-arbeck,  7  Q.  B.  846;  Ward  v. 

Mrs.  Jackson.    In  such  a  state  of  the  Londesborough,  12  C.  B.  252:  IGreenl. 

evidence,  the  question  of  the  notice  Ev.,,;  40;  --)  Whart.  Ev.,  ?'  1880. 
was   a   very   proper   one   to   be   sub-        'Union    Mutual    v.    Miller.   26  111. 

mitied  to  the  jury."     Wachtelv.  So-  App.  2:5<>:   Forse  v.  Supreme  Lodge, 

ciety,  84  N.  Y.  28;  Payn  v.  Society,  41  Mo.    App.  in?;   Benedict    v.  (irand 

17  Abb.   N.  C.  58;  Castner  v.  Ins.  Lodge,  48  Minn.  471;  51  X.  W.  Rep. 

Co..  .-.u  Mich.  278;  15  X.  W.  Rep. 452.  871;  Reichenbach  v.  Ellerbe,   115  Mo. 

In     Baekdahl     v.    (Irand     Lodge,    46    588. 

Minn.  61,  48  X.  W.  Rep.  154,  it  was       'Supreme  Lodge  v. Dalberg,  :;?  III. 
said:    "The  financier,  whose  duty  it    App.  146;  Beel88DL  508;  28  N.  East 

is  to  forward  notices,  could   nol    and     Rep.      ?s~>:      X.     \V.     Association     v. 

would  not  testify,  positively* and  Bpe-   Schauss,  148  111.  804;  85  N.  East.  Rep. 

cilically,  that  he  mailed  a  notice  to    ?4?. 


490  ASSESSMENTS. 

§  261.  Depositing  a  letter  in  a  postoffice  properly  addressed 
and  stamped,  is  prima  facie  evidence,  that  it  was  received  in  due 
course  of  mail  by  the  person  to  whom  it  was  addressed.  The 
presumption  that  it  was  received  arises  from  the  usual  course 
of  business  and  the  probability  that  the  officers  of  the  govern- 
ment have  done  their  duty.  It  is  not  a  conclusive  presumption 
of  law,  but  a  mere  inference  of  fact,  and  when  it  is  opposed  by 
evidence  that  the  letter  was  never  received,  it  must  be  weighed 
with  all  the  other  circumstances  of  the  case  by  the  jury  in 
determining  whether  the  letter  was  actually  received,  and  the 
burden  of  proving  the  receipt  of  the  letter  remains  throughout 
upon  the  party  who  asserts  it.1  "Where  actual  notice  of  a  fact 
is  required  and  the  receipt  of  the  notice  is  disputed,  the  court 
will  not  be  justified  in  instructing  the  jury  that  the  receipt  of 
a  letter  containing  the  notice  may  be  inferred  from  so  mailing 
the  letter,  but  the  question  whether  or  not  the  notice  was  in 
fact  received  should  be  submitted  to  the  jury  to  be  determined 
from  all  the  evidence,  both  positive  and  circumstantial.2  Where, 
in  such  a  case,  the  evidence  shows  that  the  member  was  absent 
at  the  time  the  notice  was  mailed  to  his  residence,  any  pre- 
sumption of  its  receipt  by  him  is  rebutted.3 

1  Meyer  v.  Krohn,  114111.  574;  2  N.  ''No  life  insurance  company  doing 
East.  Rep.  495;  Eckerly  v.  Alcorn,  62  business  in  the  state  of  New  York 
Miss.  228;  Duringer  v.  Moschino,  92  shall  have  power  to  declare  forfeited 
Ind.  495:  Briggsv.  Hervey,  130  Mass.  or  lapsed  any  policy  hereafter  issued 
186;  Kenney  v.  Altvater,  77  Pa.  St.  or  renewed  by  reason  of  non-payment 
34:  Austin  v.  Holland,  69  N.  Y.  571;  of  any  annual  premium  or  interest, 
Rosenthal  v.  Walker,  111  U.  S.  185;  or  any  portion  thereof ,  except  as  here- 
4  Sup.  Ct.  Rep.  382;  Wade,  Notice,  inafter  provided.  Whenever  any  pre- 
SS  501;  Wharton  Ev.  §  1323  and  note;  mium  or  interest  due  upon  any  such 
Benedict  v.  Grand  Lodge,  48  Minn,  policy  shall  remain  unpaid  when  due, 
471;  51  N.  W.  Rep.  371.  a  written  or   printed  notice   stating 

2  Huntley  v.  Whittier,  105  Mass.  the  amount  of  such  premium  or  in- 
391:  Home  Ins  Co.  v.  Marple,  1  Ind.  terest  due  on  such  policy,  the  place 
App.  411;  27  N.  East.  Rep.  633.  A  where  said  premium  or  interest  shall 
statement  made  by  the  writer  of  a  be  paid,  and  the  person  to  whom  the 
letter  while  writing  it  is  not  admissi-  same  is  payable,  shall  be  duly  ad- 
ble  as  a  part  of  the  res  gestce  in  proof  dressed  and  mailed  to  the  person 
of  the  sending  of  the  letter  and  the  whose  life  is  assured,  *  *  *  at 
giving  of  notice.  Home  Ins.  Co.  v.  his  or  her  last  known  postoffice  ad- 
Marple,  supra.  dress,  postage  paid  by  the  company, 

3  People  v.  Association,  8  N.  Y.  or  by  an  agent  of  such  company,  or 
Supp.  675.  person  appointed  by  it  to  collect  such 

The    laws  of  New  York  provide  :   premium.     Such  notice  shall  further 


ASSESSMENTS.  491 

"Where  the  only  proof  of  service  of  notice  is  that  a  notice 
was  found  among  the  papers  of  the  deceased  just  after  his 
death  and  several  days  after  the  assessment  was  levied,  there 
is  no  presumption  that  the  notice  was  mailed  on  the  day  of  its 
date,  or  that  the  envelope  was  properly  addressed,  or  that  the 
letter  reached  the  member  in  due  course  of  mail.1 

§  262.  Date  of  notice  given  by  mail. — In  Protection  Life 
Ins.  Co.  v.  Palmer,  Adm'r,"  one  of  the  questions  was  as  to 
the  proper  construction  to  be  given  to  a  clause  in  the  con- 
tract of  insurance,  providing  that  the  assured  should,  within 
thirty  days  from  date  of  notice,  pay  to  the  company  the  assess- 
ment, and  that  a  failure  to  do  so  should  render  the  policy  null 
and  void.  The  evidence  showed  that  a  notice  of  an  assess- 
ment was  dated  January  25,  L873,  and  it  was  mailed  to  the 
assured  on  February  3, 1S73,  but  there  was  no  evidence  showing 
that  he  had  ever  received  it.  He  died  on  March  5,  1873,  with- 
out having  paid  the  assessment.  The  company  contended  that 
the  foregoine;  clause  of  the  contract  of  insurance  meant  that 
the  payment  should  be  made  within  thirty  days  from  the  date 
written  on  the  paper  as  a  date.  But  the  court  held,  that  the 
true  object  of  the  agreement  was  that  the  assured  should  be 
informed  that  an  assessment  had  been  made,  which  he  was 
required  to  pay  by  the  terms  of  his  agreement;  that  the  insur- 
ance company  undertook  and  agreed  that  they  would  convey 
to  him  information  of  the  fact  that  he  had  been  assessed  and 
the  amount  imposed,  and  that  he  agreed  that,  after  they  should 
put  him  in  possession  of  the  fact,  he  would  pay  the  amount 
within  thirty  days.     And  the  court  further  held  that  the  time 

Btate  that,  unless  the  said  premium  est  become    payable  only   ;it  Btated 

or  interest  then  due  shall  be  paid  to  times  and  that  the  purpose  of  the  act 

the  company  or  to  a  duly  appointed  is  to  require  notice  to  be  given  so  that 

agent  or  other  person  authorized  to  policies  may  not   lapse  through   for- 

collectsuch  premium  within   thirty  getfulnessor  misapprehension.    As- 

days  after  the  mailing  of  such  notice,  Bessments  in  mutual  benefit  insurance 

the  said   policy,  and   all   payments  areuncertain  in  amount  and  time  of 

thereon,  will   become   forfeited  and  payment  and  can  only  become  due 

void."    It  was  insisted  in    MLerriman  after    notice    and    demand.     Bence 

v.  Association,  188  N.  V.   116,  33   N.  they  are  not  within   the  purpose  of 

East.  Rep.  738,  thai  thisacl    applied  the  act. 

to  mutual  hen. lit  societies;  but  it  was  '  Phelan  v.  Ins.  Co.,  113  X.  Y.  147; 

held  that  it  clearly  had  reference  only  reversing  42  Hun  419. 

to  policies  where  premiums  or  inter-  -  81  111.  88. 


492  ASSESSMENTS. 

within  which  payment  is  to  be  made  is  not  to  be  computed 
from  the  actual  date  of  the  notice,  or  from  the  day  it  was 
mailed  to  the  member,  but,  when  sent  by  mail,  from  the  time 
at  which  the  notice  would,  in  the  regular  mode  of  carrying 
the  mail,  be  received  by  the  member  during  business  hours. 
The  company  was  held  liable  on  the  policy.  In  discussing 
the  questions  involved  in  the  case  of  The  National  Mutual  v. 
Miller,1  the  court  of  appeals  of  Kentucky  recognize  this  to  be 
the  true  rule  in  determining  the  date  of  notice  of  assessments 
in  like  cases.  Where  the  contract  requires  that  payment  shall 
be  made  within  a  certain  time  "  from  the  date  of  the  notice"  of 
assessment,  this  does  not  mean  the  date  written  in  the  notice, 
but  the  date  when  the  giving  of  notice  is  complete  under  the 
contract.2  Where  a  contract  provides  that  notice  of  an  assess- 
ment "  may  be  served  either  personally  or  by  registered  letter 
addressed  to  the  assured  at  his  postoffice  address  named  in  or 
on  the  policy,  and  no  policy  of  insurance  shall  be  suspended 
for  non-payment  of  such  amount  until  thirty  da}Ts  after  such 
notice  has  been  served,"  service  is  complete  and  the  thirty 
days  begin  to  run  as  soon  as  the  letter  is  mailed  as  provided.3 
Where  an  assessment  is  payable  within  thirty  days  from  the 
"  mailing  of  a  registered  letter  to  the  member,  containing  a 
notice  of  such  assessment,"  the  period  of  time  does  not  run 
from  the  date  when  the  letter  was  deposited  in  the  postoffice 
to  be  mailed  and  registered,  but  from  the  date  when  the  regis- 
tration was  completed  by  making  the  proper  entries  in  the 
books  of  the  postoffice,  and  the  procuring  of  a  receipt  by  the 
sender,  as  provided  in  the  postal  regulations.4  A  by-law  of  a 
society  provides  that  a  policy  issued  by  it  shall  become  void 
"  if  the  assured  shall  neglect,  for  the  term  of  thirty  days,  to 
pav  *  *  any  assessment  *  *  when  requested  to  do  so 
by  mail  or  otherwise."  In  construing  this  by-law,  the  court 
held  that,  by  the  neglect  of  the  assured  to  pay  the  amount  of 
an  assessment  for  thirty  days  after  a  written  request  for  pay- 
ment, prepaid,  duly  directed  and  deposited  by  the  society  in 

1  85  Ky.  88;  2  S.  W.  Eep.  900;  see  N.  W.  Eep.  47;  Elliott  v.  Kennedy, 
Mueller  v.  U.  S.  Association,  51  111.  26  How.  Pr.  422;  Forse  v.  Supreme 
App.  40.  Lodge,  41  Mo.  App.  107. 

2  Til.  Order  v.  Besterfield,  37  111.  4Holbrook  v.  Ins.  Co.,  86  Iowa 
App.  522.  255;  53  N.  W.  Rep.  229. 

3  Ross  v.  Ins.  Co.,  83  Iowa,  586;  50 


ASSESSMENTS.  493 

the  postoffice,  would,  in  due  course  of  mail,  reach  the  place 
of  his  residence  as  set  forth  in  the  policy,  the  contract  was 
forfeited  and  rendered  void,  and  that  such  neglect  to  pay 
worked  a  forfeiture  of  the  policy  whether  he  received  such 
request  or  not.1  A  by-law  of  a  society  provided  that,  when- 
ever an}'"  assessment  should  be  levied,  and  notice  thereof  be 
forwarded  to  the  insured  by  mail  or  otherwise,  and  the  insured 
should  for  the  space  of  thirty  days  after  such  notice  refuse  or 
neglect  to  pay  the  same,  the  policy  might  be  declared  void. 
In  construing  this  by-law,  the  court  said :  "  In  contemplation 
of  law  the  plaintiff  had  notice,  when  in  the  ordinary  course  of 
mail  the  notice  should  have  reached  (the  member's  postoffice 
address).  It  would  greatly  embarrass  the  defendant,  if  not 
render  the  transaction  of  its  business  impracticable,  if  it  should 
be  required  to  prove  actual  delivery  of  notice  to  the  party 
assessed.  By  express  stipulation  it  is  agreed  that  the  policy 
may  be  forfeited  for  refusal  or  neglect  to  pay  an  assessment 
within  thirty  days  after  notice  thereof  forwarded  to  the 
insured  by  mail.  In  mailing  the  notice  the  company  did  all 
it  was  required  to  do."  2  A  certificate  of  membership  provided 
that  the  member  should  be  notified  of  each  assessment  "  b}7" 
written  notice  deposited  in  the  postoffice  in  the  city  of  New 
Orleans,  addressed  to  such  address  as  has  been  left  in  writing 
at  the  office  of  the  association  with  the  secretary,"  and  that 
"  on  his  failure  to  pay  said  assessment  within  thirty  days  from 
the  time  that  notice  is  given  to  him  that  said  assessment  is 
due,  this  policy  shall  become  null  and  void."  A  notice  in 
writing  deposited  in  the  postoffice  in  New  Orleans  addressed 
to  such  address  as  has  been  left,  etc.,  is  a  sufficient  notice  of 
assessment,  and  no  evidence  will  be  admitted  to  show  that  the 
member  did  not  receive  the  notice.3  Where  the  contract  pro- 
vides for  notice  of  an  assessment  by  mail  to  the  last  given 
address  of  the  member  and  for  forfeiture  for  non-payment 
within  a  certain  time,  the  date  of  the  notice  is  the  time  when 
it  is  received  by  him,  or  the  time  when  he  could  have  received 
it  in  the  ordinary  course  of  mail.4 

'Lothrop  v.  Greenfield  Mutual,   2  Ann.  938;  see  also  Yoe  v.  Association, 

Allen  (84  Mass.)  82.  63  Md.  86. 

'2Greely  v.  Iowa  State  Ins.  Co.,  50  4U.  S.  Association  v.  Mueller  (111.). 

Iowa  86;  Mutual  Reserve  v.  Hamlin,  37  N.  East.   Rep.  882;   Mueller  v.  U. 

139  U.  S.  297;  11  Sup.  Ct.  Rep.  614.  S.  Association,  51  III.  App.  40. 

3  Epstein  v.    Mutual    Aid,  28    La. 


494  ASSESSMENTS. 

§  263.  Date  of  assessment,  date  of  notice. — A  by-law  of 
an  association  provided  that  "  every  member  failing  to  pay  his 
assessment,  within  thirty  days  from  the  date  of  such  assess- 
ment, shall  stand  suspended."  In  construing  this  by-law,  the 
appellate  court  of  Illinois  held  that  the  duty  of  the  associ- 
ation was  complete  upon  mailing  the  assessment,  and  that  the 
failure  of  such  assessment  to  reach  the  assured,  by  reason  of 
its  miscarriage  in  the  mail,  or  the  absence  of  the  assured, 
would  not  excuse  the  non-payment  of  the  assessment  within 
the  prescribed  time.  The  court  said  :  "  In  the  case  of  Protec- 
tion Life  Ins.  Co.  v.  Palmer,1  where  the  policy  is  declared  by 
its  terms  to  be  forfeited  unless  payment  is  made  within  thirty 
days  from  the  date  of  notice,  it  is  not  unreasonable  to  hold 
that  these  words  '  date  of  notice '  refer  to  the  time  when  the 
knowledge  of  the  facts  contained  in  the  letter  reach  the 
assured,  for  the  word  '  notice '  has  a  double  meaning,  and  is 
often  used  to  signify  either  the  paper  or  other  instrumentality 
used  to  give  information,  or  the  information  itself.  No  such 
ambiguity  can  arise  by  the  use  of  the  word  '  assessment.'  It 
can  not  refer  to  two  distinct  periods.  The  date  of  the  assess- 
ment means  necessarily  the  time  when  it  is  made  out  by  the 
secretary  and  mailed  to  the  assured  in  accordance  with  the 
terms  of  the  by-laws."  2 

§  264.  Notice  by  publication. — A  contract  of  insurance 
provided  that  the  society  should  notify  its  members  of  assess- 
ments by  publication  for  five  days  in  certain  newspapers,  and 
that  the  members  should  pay  the  assessments  within  thirty  days 
after  notification.  The  court  held  that  under  this  contract 
the  member  was  allowed  the  entire  thirty  clays,  commenc- 
ing and  counting  from  and  after  the  last  five  days  of  publica- 
tion, and  that  the  society  could  not  claim  the  forfeiture  of  the 
policy  for  non-payment  of  assessment  until  thirty  days  after 
the  last  of  the  five  days  of  publication  had  expired.3  Under 
a  clause  in  the  charter  of  a  society,  directing  the  managers 
when  they  make  an  assessment  to ;'  publish  the  same,"  and  pro- 
viding that  the  member  shall  "  within  sixty  days  after  such 

*81  111.  88.  W.  Life  Ass'n,  86  Fed.  Eep.  75;  Yoe 

2  Weakly  v.    N.    W.    Association,  v.  Association,  63  Md.  86;  Mueller  v. 

19  111.  App.  327;   see  Greely  v.  Iowa  IT.  S.  Association.  51  111.  App.  40. 
St.  Ins.   Co.,  supra;  Epstein  v.  Mu-       3Wetmorev.  Mutual  Aid  &  Ben., 

tual  Aid,  etc.,  supra;  Stanley  v.  N.  23  La.  Annual  770. 


ASSESSMENTS.  405 

publication"  pay  their  assessments  on  penalty  of  immediate 
forfeiture,  actual  notice  of  assessment  to  each  member  is  not  re- 
quired, but  notice  by  publication  is  sufficient.'  Where  the 
articles  of  association  provide  that  members  shall  pay  their 
assessments  "  within  thirty  days  after  receiving  notice  thereof," 
on  penalty  of  forfeiture  for  nonpayment  thereof  within  that 
time,  the  society  must  show,  before  a  forfeiture  may  be  de- 
clared, that  actual  notice  was  given  to  the  member,  though  a 
by-law  provides  that  notice  of  assessments  "  shall  be  given  by 
publication  in  one  or  more  newspapers."  That  construction 
is  to  be  given  to  inconsistent  terms  which  is  most  favorable  to 
the  rights  of  the  member.3 

§  265.  Notice  of  date  of  payment. — A  society  sent  out  the 
following  notice  to  its  members :  "  Mortuary  assessment  Xo. 
30  will  be  due  and  payable  on  or  before  the  first  day  of  May, 
1872."  Without  having  paid  that  assessment,  the  insured  died 
on  the  night  of  May  1,  1872,  before  midnight.  There  was 
nothing  in  the  contract  providing  at  what  hour  the  assessment 
should  be  paid,  and  no  provision,  as  is  generally  the  case  in 
insurance  contracts,  that  the  policy  should  cease  at  noon  on 
the  day  named,  if  the  assessment  should  not  be  paid.  The 
court  held  that  the  policy  continued  in  force  until  midnight  of 
May  1st,  and  that  the  society  was  liable.3  Where  a  member 
is  to  make  payment  of  an  assessment  within  thirty  days  from 
date  of  notice  thereof,  the  day  on  which  he  receives  the  notice 
will  be  excluded.4 

§  266.  Service  of  notice. — In  suits  upon  certificates  of 
membership  in  a  mutual  benefit  society,  the  controversy  fre- 
quently turns  upon  the  question  whether  the  deceased  mem- 
ber was  so  notified  or  informed  of  the  assessment  as  to  incur 
a  forfeiture  by  reason  of  its  non-payment.  The  notice  given, 
in  order  to  have  such  an  effect,  must  be  shown  to  have  sub- 
stantially followed,  in  its  form  and  manner  of  service,  the 
rules  prescribed  in  the  contract  of  insurance.  It  is  often  in- 
sisted, however,  that  it  is  sufficient  if  it  appear  from  the  evi- 

1  Pennsylvania,  etc.  v.  Ins.  Co.,  127      3  Och  v.  Homestead,  etc.,  bos.  I  o., 
Pa.  St.  559;  18  Atl.  Rep.  392;  North-   4  Pittsburg  Leg.  Jour.  98. 
ampton  Ins.  Co.  v."Stewart,  39  N.J.       *Protection  Life  \.    Palmer,  81  111. 
L.  486.  88;  National  Mutual  v.  Mill,  i .  85  Ky. 

2  Schmidt  v.  German  Mutual.  4  Ind.    88;  3  S.  W.  Rep.  900;  Wetmore  v.  Mu- 
App.  340;  30  N.  East.  Rep.  939.  tual  Aid,  23  La.  Ann.  770. 


496  ASSESSMENTS. 

dence  that  the  deceased  member  had  knowledge  of  the  assess- 
ment, derived  from  any  source,  or  that  he  had.  such  a  knowl- 
edge as  should  have  put  him  upon  inquiry  about  it.  This 
doctrine  is  not  tenable.  In  discussing  this  question,  the  court 
of  appeals  of  the  State  of  Missouri  said :  "  There  are  many 
cases  where  a  person  must,  at  his  peril,  act  upon  the  knowl- 
edge of  a  particular  fact,  however  derived,  or  upon  such 
information  as  should  reasonably  put  him  upon  inquiry.  But 
wherever  the  special  law  of  the  notice  prescribes  the  form  and 
manner  in  which  it  is  to  be  given,  especially  when  a  forfeiture 
may  result,  the  party  to  be  affected  will,  as  a  general  rule,  not 
be  bound  by  a  notice  given  in  any  other  form  or  manner. 
Thus,  when  a  man's  rights  are  to  be  adjudicated  in  a  court  of 
justice,  he  is  entitled  to  just  the  form,  manner  and  time  of 
notice  that  are  directed  by  the  statute;  otherwise  he  will  not 
be  bound  by  the  proceedings,  although  bodily  present  in  the 
court  room,  seeing  and  hearing  all  that  may  be  done.  The 
indorser  of  a  promissory  note  may  have  personal  knowledge 
of  the  maker's  intention  not  to  pay,  or  of  his  failure  to  pay,  at 
maturity.  Yet  the  holder  can  not  subject  him  to  any  liability 
without  a  notice  of  the  dishonor,  given  in  the  form,  time,  and 
manner  established  by  commercial  law  and  usage.  (The  mem- 
ber) might  have  heard  a  rumor,  or  have  been  informed  by  a 
friend,  that  assessment  number  72  had  been  declared,  and  must 
be  paid  by  a  certain  time.  But  she  had  a  right  to  disbelieve 
the  rumor,  or  the  friend,  until  a  knowledge  of  the  fact  was 
brought  home  to  her  in  the  way  for  which  she  had  stipulated 
in  her  contract  with  the  association."  ' 

Where  it  is  shown  that  a  deceased  member  of  such  a  society 
knew  of  the  assessment  made  upon  the  members,  and  expressed 
his  intention  to  pay  it,  these  are  facts  from  which  the  jury 
may,  but  are  not  bound  to  infer  that  he  was  properly  notified.2 
The  object  of  stipulations  as  to  the  form  and  manner  of  service 
of  notice  of  assessment  is  to  point  out  to  the  member  the  way 
in  which  he  is  to  expect  the  notice,  and  to  protect  him  in  his 
right  to  have  knowledge  and  information  of  the  time  when, 
and  amount  which,  he  will  be  required  to  pay.     The  member 

1  Siebert  v.  Chosen  Friends,  23  Mo.  Stewart  v.  Supreme  Council,  36  Mo. 
App.  268.  App.  319. 

s  Siebert  v.  Chosen  Friends,  supra; 


ASSESSMENTS.  497 

may  waive  compliance  with  these  purely  technical  require- 
ments, and  if  he  actually  receives,  without  objection,  the  notice 
to  which  he  is  entitled,  and  acknowledges  the  receipt  of  the 
notice,  or  in  any  way  acts  upon  it,  but  does  not  pay  the  as- 
sessment, he  waives  the  right  to  service  in  the  manner  and 
form  as  agreed  upon  in  the  contract.  A  by-law  of  a  society 
provided :  "  If  the  insured  shall  neglect  for  the  space  of  ten 
days,  when  personally  called  on,  or  after  notice  in  writing  has 
been  left  at  his  last  and  usual  place  of  abode  or  business,  to 
pay  an  assessment,  the  risk  of  the  company  on  the  policy  shall 
be  suspended  until  the  same  is  paid."  A  member  was  not  per 
sonally  called  on  for  an  assessment,  and  a  notice  in  writing 
was  not  left  at  his  last  and  usual  place  of  abode  or  business, 
but  he  received  a  notice  by  mail,  and  had  some  correspondence 
with  the  society  about  the  assessment.  He  did  not  pay  the 
assessment,  but  made  no  objection  to  the  way  in  which  the 
notice  reached  him.  In  an  action  on  the  contract  of  insurance, 
it  was  held  that  any  objection  to  the  manner  of  receiving  the 
notice  had  been  waived  by  the  member.1  Upon  this  subject, 
the  court  said:  "The  object  of  this  provision  in  the  by-law  is 
to  bring  the  notice  of  an  assessment  to  the  knowledge  of  the 
insured.  But  this  may  be  waived,  and  it  does  not  preclude 
other  methods  of  communication,  provided  the  purpose  of  the 
by-law  in  this  regard  is  accomplished.  The  objection  now  for 
the  first  time  made  is  purely  technical,  and  as  he  actually  re- 
ceived the  notice  to  which  he  was  entitled,  without  objection, 
he  has  been  in  no  way  injured  by  this  departure  from  the  by- 
law, and  he  can  not  avail  himself  of  it." 

From  the  authorities  the  doctrine  is  fairly  deducible,  that  a 
member  does  not,  by  receiving  and  retaining  a  notice  of  an 
assessment,  waive  any  objection  to  its  sufficienc}7"  under  the 
contract  of  insurance;  but  that  he  does  waive  the  question  as 
to  the  sufficiency  of  the  service  of  a  proper  notice  upon  him, 
by  receiving  it  by  some  other  method  of  communication  than 
that  agreed  upon,  acting  upon  it,  and  retaining  it  beyond  a 
time  when  he  might  reasonably  call  the  attention  of  the  society 
to  the  irregularity  and  insufficiency  of  the  service.  When  the 
evidence  is  conflicting  concerning  the  service  of  notice  upon  a 
member,  it  is  for  the  jury  to  decide  whether  or  not  such  service 

1  Hollister  v.  Quincy  Insurance  Co.,  118  Mass.  478. 
32 


498  ASSESSMENTS. 

was  made  upon  him.1  Proof  of  the  service  or  the  giving  of  a 
notice  involves  proof  of  its  contents.2  Where  a  particular 
method  of  giving  the  notice  of  an  assessment  has  been  agreed 
upon  and  made  a  part  of  the  contract,  it  is  binding  upon  all 
parties  unless  waived.3  Where  a  law  or  contract  provides  that 
notice  of  any  fact  shall  be  given  and  there  is  no  qualification, 
personal  service  is  meant.  In  the  absence  of  any  agreement 
with  the  member,  or  any  provision  in  the  charter  or  by-laws 
for  a  different  mode  of  service,  it  should  be  made  personally, 
as  required  at  common  law,  when  the  object  is  to  deprive  a 
party  of  his  rights  or  property;  but  if  that  method  be  dispensed 
with,  then  the  service  must  be  made  in  such  away  as  will  most 
likely  effect  the  object  of  the  notice.4  Unless  some  special 
mode  or  form  of  notice  be  required  by  the  contract,  personal 
service  will  be  sufficient;5  and  where  by  the  contract  payment 
must  be  made  within  thirty  days  after  notice  of  an  assessment 
has  been  published,  personal  service  of  notice  of  an  assessment 
is  sufficient.8 

§  267.  Agreement  of  the  society  to  give  notice  to  the 
beneficiary. — Where  the  society  knows  that  a  person  has  an 
expectant  interest  in  the  fund  to  be  paid  under  a  certificate, 
and  agrees  to  give  him  notice  of  assessments  in  time  to  enable 
him  to  pay  them  and  prevent  a  forfeiture,  and  afterward  fails 
to  give  him  notice,  it  can  not  ignore  the  agreement  and  forfeit 
the  contract  in  violation  of  it.7 

§268.  Insufficient  notice  of  assessment. — The  notice 
must  conform  to  the  by-laws  and  the  contract,  or  it  is  invalid. 
No  forfeiture  can  be  declared  for  non-payment  of  an  assess- 
ment where  the  notice  is  insufficient.  Where  the  contract  of 
insurance  provides  that  the  member  shall  pay  $2.50  quarterly 
for  expenses,  and  that  he  shall  forfeit  his  membership  if  the 
quarterly  dues  shall  not  be  paid  within  thirty  days  after 
notice,   a  notice   to  pay   810  as   annual  dues,  in  advance,  is 

'Buckley  v.  Columbia  Ins.  Co.,  83  County  Mutual  v.  Knight,  48  Me.  75; 
Pa.  St.  298.  Williams  v.  German  Mutual,   68   111. 

2  Supreme  Lodge  v.   Johnson,  78   387. 

Ind.  110;  11  Ins.  L.  J.  251.  6  Jones  v.  Sisson,  supra. 

3  Maginnis  v.  Association,  43  La.  7  Keeler  v.  Association,  20  N.  Y. 
Ann.  1136;  10  So.  Rep.  180.  Supp.    935;    Kenyon  v.  Association, 

4  Wachtel  v.  Society,  84  N.  Y.  28.    122  N.  Y.  247;  25  N.  East.  Rep.  299; 
6  Jones  v.  Sisson,  6  Gray  288;  York    2  May.  Ins.  (3rd  Ed.)  §  360,  C. 


ASSESSMENTS.  499 

not  a  sufficient  notice.1  Where  the  charter  and  by-laws  of  a 
society  provide  that,  when  the  board  of  directors  shall  order 
an  assessment,  the  secretary  shall  prepare  it,  and  that  it  shall 
be  signed  by  him  and  a  majority  of  the  board,  an  unsigned  and 
uncertified  paper  containing  no  headings  to  explain  the  figures 
set  down  in  it,  can  not  be  treated  as  an  official  assessment  for 
the  purpose  of  forfeiting  the  policy  of  one  who  had  not  paid 
the  amount  of  his  assessment  until  after  the  expiration  of  the 
period  fixed  by  that  notice  to  him.2  The  articles  of  incor- 
poration and  by-laws  of  a  mutual  benefit  society  required  that 
assessments  be  made  by  the  secretary,  and  the  certificates  of 
membership  provided  that  assessments  should  be  payable 
within  thirty  days  after  notice  from  the  secretar}r.  It  was  held 
that  the  notice  contemplated  was  notice  of  the  assessment;  and 
that  the  certificate  was  not  forfeited  by  neglect  to  pay  assess- 
ments which  were  not  imposed  by  the  secretary,  but  by  per- 
sons claiming  to  be  managers,  and  where  the  only  notice  from 
the  secretary  was  a  notice  of  forfeiture.3 

The  by-laws  of  a  society  provided  that,  upon  the  death  of  a 
member,  the  secretary  should  notify  the  members  through  local 
agents,  and  that  each  member  should  within  ten  days  therea  Iter 
pay  his  dues,  and  if  he  should  neglect  to  do  so  for  forty  days, 
he  should  forfeit  his  membership.  The  court  in  construing 
this  by-law  held  that  it  would  be  unjust  and  unreasonable  to 
hold  the  mere  notice  to  the  local  agents  as  notice  to  members, 
and  that  the  provision  must  be  construed  to  mean  that,  the 
local  agents  being  notified,  they  must  notify  the  members 
Avithin  ten  days  thereafter,  and,  upon  receipt  of  such  notice, 
the  members  for  the  first  time  become  legally  bound  to  pay 
the  assessments,  and  must  pay  within  forty  days.4  "Where  a 
notice  shows  that  the  assessment  was  levied  by  the  societv, 
instead  of  by  the  board  of  directors,  the  notice  is  sufficient,  as, 
in  legal  effect,  it  is  the  same  thing.5  A  notice  which  con- 
tained only  a  fac  simile  of  the  seal  of  the  lodge,   was   held 

•Mutual  Endowment  v.  Essender,       4Coylo  v.  Ky.  Grangers  (Ky.)«  2  S. 
59  Md.  463.  W.   Rep.  67(5:  District  Grand  Lod^e 

2  Baker  v.  Citizens  Mutual,  51  Mich.    v.  Cohn.  20  111.  App.  335. 

243.  Williams  v.  German  Mutual,  68 

3  Bates  v.  Detroit  Mutual,  51  Mich.    111.  289. 
587. 


500  ASSESSMENTS. 

sufficient  notice  of  assessment,  where  it  did  not  appear  that 
the  laws  of  the  society  required  an  impress  seal  mark  to  be 
placed  upon  the  notice.  Defects  of  form  merely  are  not  ma- 
terial, where  the  notice  gives  to  the  member  actual  informa- 
tion of  the  assessment.1  A  notice  to  do  an  act,  which  is 
required  to  be  given  by  a  particular  person  named,  contem- 
plates the  personal  action  and  judgment  of  the  person  author- 
ized to  give  such  notice,  and  involves  the  exercise  of  power  and 
discretion  to  be  exerted  by  the  individual  himself,  which  he 
can  not  delegate  to  another.  Thus,  where  a  by-law  of  a  mu- 
tual benefit  society  provides  that  the  local  secretary  shall  give 
notice  of  assessments  to  members,  and  another  by-law  declares 
that  a  member,  by  a  failure  to  pay  after  notice  by  the  general 
secretary  shall  forfeit  his  right  to  benefits,  a  member  is  enti- 
tled to  notice  from  both  secretaries,  and  a  card  on  which  the 
name  of  the  general  secretary  is  printed,  but  which  is  filled  up 
and  addressed  by  the  local  secretary,  is  not  sufficient  to  con- 
stitute a  notice  from  the  general  secretary.2 

"When  according  to  the  by-laws  of  a  society,  the  notice  to 
members  requiring  them  to  pay  assessments  must  contain  a 
list  of  all  deaths  which  have  occurred  since  the  last  assess- 
ment, and  notify  the  member  of  the  amount  due  from  him  to 
the  benefit  fund,  a  forfeiture  of  membership  can  not  be  sus- 
tained for  failure  to  pay  an  assessment,  when  the  notice 
thereof  did  not  conform  to  the  by-laws  in  these  respects.3 
Where  provision  is  made  for  the  publication  of  a  list  of  the 
deaths,  it  will  be  presumed  that  the  members  adopted  such  a 
provision  in  order  to  see  the  necessity  of  the  assessment;  and 
where  the  society  agrees  to  notify  the  member  of  the  amount 
due  from  him  on  an  assessment,  he  has  a  right  to  rely  upon  the 
amount  as  stated  in  the  notice,  and  where  no  amount  is  stated 
the  notice  is  manifestly  insufficient.  The  fact  that  a  notice  of 
assessment  was  not  addressed  on  its  face  to  a  member  does  not 
invalidate  it,  when  it  was  sent  and  received  in  an  envelope 
properly  directed.     A  notice  need  not  state  the  amount  of  the 

1  Karcher  v.  Supreme  Lodge,  137  s  Payne  v.  Mutual  Relief  Society, 

Mass.  36;  see  Hefferman  v.  Supreme  17  Abb.  (N.  Y.)  N.  Cas.  53. 

Council,  40  Mo.  App.  6Q5;  Hansen  v.  3  Miner    v.   Michigan  Mutual,    63 

Supreme  Lodge,  140  111.  301;  29  N.  Mich.  338;  29  N.  W.  Rep.  852. 
East.  Rep.  1121;  S.C.,40I11.  App.  216. 


ASSESSMENTS.  501 

assessment  when  the  member  knows  the  amount  which  he  is 
required  to  pay  under  his  contract.1 

A  society  claimed  that  a  member  had  been  suspended  after 
having  received  notice  under  an  article  of  its  by-laws,  which 
was  as  follows  :  *';  A  member  who  does  not  pay  his  dues  and 
assessments  to  the  lodge  within  four  weeks  after  the  quarter, 
shall  be  notified  to  pay  the  same  Avithin  fourteen  days,  and  if 
he  does  not  pay  he  shall  be  considered  in  arrears,  and  he  is  not 
entitled  to  lodge  benefits.  A  member  so  in  arrears  shall  be 
notified  by  the  secretary  in  writing  to  pay  within  thirty  days, 
in  default  whereof  the  member  shall  be  suspended."  The  dues, 
as  to  which  the  member  was  delinquent,  were  for  the  two 
quarters  ending  respectively  June  30  and  September  30.  The 
only  notice  sent  to  the  member  in  relation  to  the  dues  for  the 
quarter  ending  June  30,  as  shown  by  the  record,  was  mailed 
to  him  May  22,  which  was  long  before  those  dues  were  pay- 
able. The  only  other  notice  shown  to  have  been  sent  him  in 
relation  to  the  dues  of  either  quarter  was  mailed  October  22, 
and  that  notice  required  the  payment  of  the  dues  of  both 
quarters.  It  was  not  shown,  as  to  the  dues  of  either  quarter, 
that  after  the  member  had  failed  to  make  payment  within 
four  weeks  after  the  quarter,  he  was  notified  to  pay  within 
fourteen  days,  and  failing  to  make  payment  within  that 
time,  reached  that  stage  of  the  proceedings  where  he  could  be 
'*  considered  in  arrears,"  and  after  becoming  so  "  in  arrears," 
he  was  again  notified  to  pay  within  thirty  days,  and  made 
default  in  payment  during  all  that  period.  By  the  terms  of 
the  above  by-law,  each  of  these  steps  was  clearly  essentia!  to 
valid  suspension.  "  It  was  necessary  to  wait  four  weeks  after 
the  expiration  of  the  quarter,  and  then  if  the  dues  were  un- 
paid,  to  notify  the  delinquent  to  pay  within  fourteen  days.  If 
he  still  remained  delinquent,  he  was  to  be  considered  in  ar- 
rears, and  when  so  in  arrears,  he  was  to  be  again  notified  to 
pay  within  thirty  days  thereafter,  and  it  was  only  when  the 
delinquency  had  extended  to  the  termination  of  this  hit  in- 
period,  that  sentence  of  suspension  could  be  pronounced."  ' 

§  269.  By  a  clause  of  the  certificate  of  membership,  a  for- 
feiture was  authorized  if  the  member  failed  to  pay  an  assess- 

1  Hansen  v.  Supreme  Lodge,  40  111.  i  District  Grand  Lodge  v.  Colin.  20 
App.  21G.  111.  App.  333. 


502  ASSESSMENTS. 

ment  within  thirty  days  after  a  publication  of  the  notice  for 
five  consecutive  clays.  Subsequent  to  the  issuing  of  the  cer- 
tificate, the  society  addressed  a  notice  of  assessment  to  the  in- 
sured, who  resided  in  New  Orleans,  on  which  the  following 
indorsement  was  printed :  '*'  Members  residing  in  the  city  of 
New  Orleans  are  hereby  notified  that  the  notices  of  assess- 
ments due  by  them  on  death  of  a  member  are  only  given 
through  newspaper  publication — in  special  notice  column — for 
eight  consecutive  days;  being  always  published  on  the  first 
Sunday  of  the  month  and  continued  through  the  week,  in- 
cluding the  second  Sunday.  Payment  is  required  at  the  office 
within  thirty  days  from  date  of  publication;  the  failure  to 
make  payment  within  thirty  days  operates  a  forfeiture  of 
his  or  her  policy,  and  the  name  of  such  delinquent  will  be 
erased  from  the  books  of  said  association.  J\' otices  of  assess- 
ments are  published  in  the  New  Orleans  Times,  New  Orleans 
Bee,  the  Daily  Picayune  and  German  Gazette.  Special  no- 
tices will  not  be  sent  to  residence  or  business  location." 
While  this  indorsement  remained  unrecalled,  it  was  a  volun- 
tary extension  of  the  time  of  the  publication,  in  order  to  effect 
a  forfeiture  as  agreed  to  in  the  contract  of  insurance;  and  un- 
der this  agreement  the  forfeiture  would  not  occur  unless  there 
was  a  failure  to  pay  the  assessment  called  for,  after  thirty 
days  from  the  publication  of  notice  for  eight  consecutive  days. 
Where  the  notice,  therefore,  under  which  forfeiture  was 
claimed  was  only  published  for  seven  days,  it  was  held  in- 
sufficient.1 

A  society  provided  in  its  by-laws  that  if  a  member  should  fail 
to  pay  his  assessment  for  ten  days  after  notice  thereof  by 
publication,  his  wife  should  have  no  benefit  fund  in  case  of  his 
death;  and  if  he  should  fail  for  thirty  days  so  to  pay,  he 
might  be  expelled.  A  by-law  of  the  society  provided  for  pub- 
lishing notice  of  every  death  and  assessment,  and  of  the  time 
when  the  same  was  required  to  be  paid,  and  also  provided 
that  a  collector  should  be  appointed  to  notify  members  in 
arrears  for  such  dues,  and  to  collect  them.     A  member  died  in 

1  Fitzpatrick  v.  Mutual  Benevolent  Ins.  Co.  v.  Stewart,  39  N.  J.  L.  486; 

Co.,  25  La.  Ann.  443;  see  Gunther  v.  Atlantic  Mutual  v.    Sanders,  36  N. 

Aid  Ass'nr  40  La  Ann.  777;  5  South-  H.  254. 
ern  Rep.  65;  see  also  Northampton 


ASSESSMENTS.  503 

April,  1873,  and  notice  was  published  in  two  newspapers  in 
the  city  where  the  members  resided,  stating  the  fact,  and  that 
dues  on  account  thereof  were  payable  April  30,  1873.  B., 
another  member,  was  drowned  on  May  11,  1873.  There  was 
no  evidence  that  he  was  aware  of  the  death  of  the  member 
who  died  in  April,  or  that  he  knew  of  the  publication  of 
notice  in  the  newspapers.  The  collector  of  the  society  did 
not  call  upon  him  for,  or  notify  him  of  the  assessment.  The 
society  refused  to  pay  the  benefit  fund  to  B.'s  widow.  The 
court  held  that  members  of  this  society  did  not  bind  them- 
selves to  ascertain  the  fact  of  the  death  of  a  member  from 
publication  only  at  the  risk  of  forfeiting  their  interest  in  the 
benefit  fund,  and  that  B.  did  not  lose  his  right  to  have  this 
fund  paid  to  his  widow,  as  he  had  no  knowledge  of  the  death 
of  the  party  on  whose  account  he  had  been  assessed,  or  of  the 
publications  in  the  newspaper;  and  until  he  had,  or  until  after 
demand  made  upon  him  by  such  collector,  his  right  to  pay 
such  assessment  and  preserve  his  rights  in  the  fund  continued.1 
Notice  of  an  assessment  handed  to  a  son  of  the  member  is 
insufficient  as  a  basis  for  a  declaration  of  forfeiture.11  Where 
the  by-laws  provide  that  notices  of  assessment  shall  be  given 
by  publication  in  three  newspapers  published  in  the  county  in 
which  the  society  is  doing  business,  it  is  not  sufficient  to  show 
that  such  notices  were  published  in  two  papers  in  that  county.8 
A  notice  of  an  assessment  is  invalid,  which  requires  payment 
to  be  made  before  the  expiration  of  the  time  in  which  the  mem- 
ber may,  by  the  contract,  make  the  payment.4     Thus  where 

1  Mutual  Relief  Society  v.  Billau  directed  to  his  postoffice  address,  as 
(Superior  Court  of  Cincinnati),  3  Am.  given  in  his  original  application,  or 
Law  Record,  546;  Schmidt  v.  Ger-  in  writing  to  the  secretary of  the  corn- 
man  Mutual,  4  Ind.  App.  340;  30  N.  pany.  On  the  12th  of  February  the 
East.  Rep.  939.  notice  on  which  the  defendants  relj 

■Supreme  Lodge   v.  Wickser,  72  was  mailed,  but  it  required  payment 

Texas,  257.  to  be  made  on  the  24th  of  the  si 

3  Sande  v.  Groves,  58  N.  Y.  94.  month.    The   statute    requires    the 

«Frey   v.    Wellington   Mutual,    4  time  for  payment  to  be  stated  in  the 

Upper  Canada,  293.    In  this  case  it  is  notice,  and  so  impliedly  requires  the 

said:     "  The  statute  provides  that  an  named  day  to  be  at  least   thirty  .lavs 

assessment  shall  become  payable  in  subsequent  to  the  mailing.    This  as- 

thirty  days  after  notice  of  such  assess-  sessment,  therefore,  does  not  seem  to 

ment  shall  be  mailed   to   the  person  have    been    validly  made  upon    the 

who  has   given  the  premium    note  plaintiff." 


504  ASSESSMENTS. 

the  by-laws  of  a  society  provide  that,  upon  the  failure  of  a 
member  to  pay  his  assessment  within  forty  days  after  notice 
from  the  secretary  of  the  death  of  a  member,  his  claims  upon 
the  society  shall  be  forfeited,  a  notice  from  the  secretary  re- 
quiring payment  to  be  made  within  thirty  days  is  a  nullity,  as 
there  is  no  authority  for  the  issuing  of  such  a  notice.1  Where 
the  by-laws  provide  for  forfeiture  of  membership  if  the  mem- 
ber fails  to  pay  any  assessment  "  within  thirty  days  from  the 
date  of  the  notice  thereof,"  a  notice  which  is  mailed  so  as  to 
reach  the  insured  November  30,  and  which  demands  pay- 
ment on  or  before  December  28,  is  not  sufficient  to  sustain  a 
forfeiture,  since  the  "  date  "  of  the  notice  is  the  time  when  it 
is  or  could  be  received.2  "Where  a  mutual  benefit  society  urges 
its  members  to  deposit  money  with  it  in  advance  of  the  assess- 
ments, and  agrees  to  apply  such  deposits  to  the  payment  of 
future  assessments,  a  notice  demanding  three  dollars  from  a 
member,  that  being  the  full  amount  of  the  assessment,  when 
the  member  has  one  dollar  deposited  with  the  society,  is  in- 
valid as  demanding  more  than  is  due.3  A  notice  requiring  a 
member  to  pay  an  assessment  before  it  is  due  is  invalid.4 

1  Haskins  v.  Ky.  Grangers' Mutual,  supra;  Eddy  v.    Ins.    Co.,  65  N.    H. 

7  Ky.  Law  Rep.  371.  27:  18  Atl.  Rep.  89. 

*  U.  S.  Association  v.  Mueller  (111.),  4  Haskins  v.  Ky.  Grange,  7  Ky.  Law 

37  N.  East.  Rep.    882;  Mueller  v.  U.  Rep.  371;  Frey  v.  Wellington  Mutual, 

S.  Association,  51  111.  App.  40.  supra. 

3U.    S.    Association     v.    Mueller, 


CHAPTER  XIX. 

ASSESSMENTS. 

§  270.     Payment  of  assessment. 

271.  Payment  out  of  funds  in  the  hands  of  the  society. 

272.  By  whom  payment  of  an  assessment  may  be  made. 

'J?:!.     When  payment  must  be  made  during  the  lifetime  of  the  member. 
274.     Death  within  thirty  days  after  notice. 

273.  Payment  of  an  assessment  after  the  death  of  the  member;  days 

of  grace. 

276.  Payment  to  subordinate  lodge;  agency  of  lodges. 

277.  Authority  of  agents  to  collect  assessments. 

278.  A  receipt  for  an  assessment  may  be  contradicted. 

279.  Tender  of  an  assessment. 

280.  Refusal  to  accept  assessments;  remedy  of  member. 

281.  Effect  of  the  return  of  assessments  once  paid. 

282.  Recovery  of  assessments  paid  by  a  member. 

283.  Promise  of  the  society  to  receive  a  past  due  assessment. 

284.  Reimbursement  of  one  who  has  paid  assessments  for  another. 

§  270.  Payment  of  assessment. — Where  a  policy  of  insur- 
ance issued  by  a  mutual  benefit  society  provides  that,  if  any 
assessment  owing  by  the  assured  shall  not  be  received  by  the 
society  within  thirty  days  from  the  date  of  notice,  the  policy 
shall  be  null  and  void,  and  there  is  no  provision  either  in  the 
contract  of  insurance  or  in  the  notice,  stipulating  the  mode  of 
remitting  the  assessment,  the  member  is  bound  to  see  that  the 
money  is  actually  received  by  the  society  within  the  time  speci- 
fied, or  forfeit  his  policy.  But  where  a  notice  directs  the 
member  to  remit  the  amount  by  post-office  order,  or  draft  pay- 
able to  the  society,  the  right  to  forfeit  the  policy,  by  reason 
of  the  non-payment  of  the  assessment  within  the  time  limited 
by  the  policy,  is  waived,  and  all  that  the  member  can  be  ex- 
pected to  do,  under  such  circumstances,  is  to  promptly  observe 
such  directions.  When  lie  lias  done  so.  lie  has  a  righl  to  sup- 
pose that  his  dues  are  paid,  and  he  can  not  be  expected  to 
know  to  the  contrary  until  notified  by  the  society,  or  until  the 

(505) 


506  ASSESSMENTS. 

lapse  of  a  reasonable  time  to  receive  a  notice  from  the  society.1 
In  all  cases  where,  by  the  direction  or  agreement  of  the  cred- 
itor, money  is  sent  by  mail  in  discharge  of  a  debt,  proof  that 
a  letter,  containing  the  requisite  sum,  duly  sealed  and  directed, 
was  deposited  in  the  post-office,  is  sufficient  to  maintain  a  plea 
of  payment.2  This  doctrine  rests  on  the  principle  that  the 
debtor  has  done  all  in  his  power  to  perform  the  contract,  and 
that  the  risk  of  transmission  was  assumed  by  the  creditor. 
An  assessment  is  considered  paid  to  the  society  when,  accord- 
ing to  instructions,  it  is  delivered  to  an  express  company  ad- 
dressed to  the  society  or  its  agent.3 

The  contract  of  insurance  frequently  provides  that  assess- 
ments shall  be  paid  by  noon  of  the  day  on  which  they  fall  due, 
but,  in  the  absence  of  any  provision  upon  the  subject,  an  assess- 
ment may  be  paid  at  or  before  midnight  of  the  day  it  falls 
due;  and  if  paid  by  that  hour,  even  after  the  death  of  the 
member,  it  will  be  sufficient.4  The  decision  of  the  officers  of 
a  society  respecting  the  construction  to  be  given  to  a  contract 
of  insurance,  and  the  custom  of  paying  assessments  which  has 
arisen  under  such  decision,  are  not  binding  upon  members. 
Where  the  contract  provides  for  the  payment  of  assessments 
to  an  officer  of  the  society,  and  those  in  authority  in  the  order 
decide  that  they  must  be  paid  at  a  meeting  of  the  lodge,  and 
can  not  be  paid  otherwise,  and  a  custom  of  so  paying  them 
grows  up  in  the  order,  the  terms  of  the  express  contract  of  the 
parties,  and  not  the  custom  or  habitual  mode  of  doing  busi- 
ness, must  determine  the  rights  and  duties  created  by  that 
contract.5  It  may  well  be  doubted  whether  it  is  competent 
for  those  representing  a  mutual  benefit  society  to  accept  any- 
thing less  than  the  total  amount  of  the  assessment  laid  upon 
a  member,  or  to  accept   in  payment   thereof   anything  but 

Protection  Life   v.  Foote,  79  111.  4  Och  v.  Ins.  Co.,  4  Pittsburg  Leg. 

361;  see  Palmer  v.  Phoenix  Mutual,  Jour.  98;  see  Leigh  v.  Ins.  Co.,  26  La. 

84  N.  Y.  64-71.  Ann.  436. 

2  Warwicke  v.  Noakes,  1  Peake  R.  5  Manson  v.  Grand  Lodge,  30  Minn. 
67;  Hawkins  v.  Rutt,  lb.  186;  King-  509;  Wiggin  v.  Knights  of  Pythias, 
ton  v.  Kington,  11  M.  &  W.  223;  Cal-  31  Fed.  Rep.  122;  Davidson  v.  Su- 
vin  v.  Association,  21  N.  Y.  Supp.  preme  Lodge,  22  Mo.  App.  263;  see 
734;  Primeau  v.  Association,  28  N.  §  143. 

Y.  Supp.  794. 

3  Whitley  v.  Ins.  Co.,  71  N.  C.  480; 
Currier  v.  Ins.  Co.,  53  N.  H.  538. 


ASSESSMENTS.  507 

money.  If  this  course  of  dealing  might  be  carried  on  with 
one  member,  it  might  also  be  done  with  all  members,  and  thus 
the  sole  purpose  of  such  an  organization  might  be  hindered 
and  defeated.'  In  some  contracts  payment  in  cash  is  not  called 
for  in  apt  words,  and  in  such  cases  anything  which  can  fairly 
be  called  payment,  and  which  is  accepted  as  such,  will  answer 
the  requirements  of  the  contracts,  but  where  an  assessment 
must  be  "  actually  paid  in  cash,"  nothing  else  will  answer  the 
requirement.2 

A  general  agent  may  waive  the  payment  of  an  assessment  in 
cash,  and  accept  other  things  than  money  in  payment;8  but  a 
local  agent  may  not.4  Where  the  treasurer  of  a  subordinate 
council  remitted  to  the  supreme  treasurer  of  the  society  an 
amount  which  equaled,  and  was  received  as,  the  aggregate 
amount  due  from  his  council  for  each  member  thereof,  and 
the  remittance  included  the  amount  assessed  against  him, 
the  fact  that  the  payment  of  his  assessment  was  made  by  him 
directly  to  the  supreme  treasurer,  instead  of  indirectly  through 
the  collector,  as  provided  by  the  rules  of  the  council,  may  not 
be  urged  to  deprive  his  widow  of  the  benefit  of  such  payment. 
The  main  purpose  for  such  rules  for  the  collection  of  assess- 
ments is  to  put  into  the  hands  of  the  supreme  treasurer  the 
amount  payable  by  each  member  of  the  society.  If  the  mone3r 
gets  into  the  treasury,  it  matters  little  by  what  path  it  got 
there,  so  far  as  the  rights  of  the  beneficiary  are  concerned. 
Payment  may  be  made  in  anything  of  value  agreed  upon  by 

1  Protection  Life  Ins.  Co.  v.  Foote,  Texas  Mutual  v.  Davidge,  51  Texas 
79  111.  361;  Buffum  v.  Fayette  Mut  244:  Haul.  v.  Ins.  Co.,  14  N.  Y.  St. 
Ins.  Co.,  3  Alien  (Mass.),  360;  Hoffman  Rept'r573;  as  to  payment  by  check, 
v.  John  Hancock  .Mutual.  92  U.  S.  see  Neil  v.  Ins.  Co.,  7  Out.  App.  171: 
1'il.  Bigelow    v.    Association,     L5  N.    Y. 

2  Dunham  v.  Morse.  158  Mass.  1.32;  Weekly  Dig,  361.  As  to  waiver  of 
32  N.  East.  Rep.  1116.  actual    prepaymenl    of   premium  or 

3Boutonv.  Ins.  Co.,  25  Conn.  542;  assessments,  see   Boehen  v.  Ins.  Co., 

Sheldon  v.    Ins.    Co..    2.-.  Conn.  207;  35   N.    Y.    131;    Goit    v.  Ins.  Co..   25 

Kentucky  Mutual    v.  Jenks,  5    End.  Barb.  189;  Sheldon  v.  Ins.  Co..  26  X. 

96;  Willcuts  v.  Ins.  Co..  si  in.l.  :{(i(i;  Y.  460;  Baxter  v.  [ns.  Co.,  !::  Allen 

Insurance  Co.  v.  Colt,  20  Wall.  560.  820;  Heaton  v.   Ins.  Co.,  7  R.  I.  502; 

♦Continental    Life  v.   Willets.   24  Dayton  Ins.  Co.  v.  Kelly,  24  Oh.  St. 

Mich.  26S;  Combs  v.  Ins.  Co..  66   Me.  845. 

882;   Hoffman  v.   Ins.   Co.,  92  U.  S.  s  Farrie  v.  Supreme  Council,  15  X. 

161;   Carter  v.  Ins.  Co.,  56  Ga.  237;  Y.  St.  Reporter  155. 


508  ASSESSMENTS. 

the  parties.  Payment  of  an  assessment  by  a  draft  which  was 
paid  when  presented  is  valid,"  although  the  rules  of  the  society 
forbade  the  taking  of  drafts.1  Where  a  member  gave  an  order 
on  a  third  person  for  the  amount  of  an  assessment,  and  the 
society  failed  to  present  the  order  for  payment  prior  to  the 
death  of  the  member,  although  several  months  intervened,  the 
society  was  estopped  to  set  up  the  non-payment  of  the 
assessment.2  To  pay  the  membership  fee  and  premium  in 
advance  in  an  accident  company,  an  order  was  given  by  an 
ignorant  man  upon  his  employer,  directing  payment  to  be 
made  from  his  wages.  The  company  was  informed  by 
the  man  of  the  nature  of  his  employment,  and  the  uncertainty 
of  his  earning  wages.  The  order  was  afterward  returned  to 
the  company  with  the  statement  that  the  man  had  left  the 
service  of  the  drawee  and  had  been  paid  in  full.  No  notice  of 
non-payment  was  given  to  the  drawer  of  the  order,  and 
no  further  effort  was  made  to  collect  the  premium.  Thirteen 
days  after  the  order  was  returned  the  man  was  accidentally 
injured.  It  was  held  that  under  all  the  circumstances  of 
the  case,  including  the  delay  in  the  effort  to  collect  the 
order,  and  the  failure  to  inform  the  drawer  that  the  taking  of 
the  order  was  not  to  operate  as  a  complete  discharge  of  his 
obligation  to  pay,  he  was  entitled  to  notice  of  demand  and 
nonpayment,  and  that  the  company  could  not  insist  that  the 
policy  had  been  forfeited.3  A  society  may  waive  a  cash  pay- 
ment and  accept  in  lieu  thereof  an  order  given  by  the  mem- 
ber on  a  third  person.  When  it  does  so,  and  gives  a  receipt 
for  the  amount,  it  can  not  defeat  a  recovery  upon  the  policy 
and  insist  upon  a  forfeiture,  without  having  given  the  assured 
notice  of  non-payment   of  the   order.4     Where  a  society  and 

1  Piedmont    Ins.    Co.   v.   Ray,    50       4  National  Benefit  Ass'n  v.  Jackson, 

Texas  511.  114  111.  533;  2  N.  East.  Rep.  414;  see 

2Cotten  v.   Casualty  Co.,  41   Fed.  Lyon  v.  Ins.  Co.,  55    Mich.    141;    20 

Rep.  506.  N.  W.  Rep.   829;    Baker  v.  Ins.  Co., 

3  Eury  v.   Ins.  Co.,   89    Tenn.   427;  6  Abb.    Pr.  (N.  S.)   144;    1  Big.  L.  & 

14  S.  W.  Rep.  929;  but  see  Landis  v.  A.  Cas.  595;  Bane  v.  Ins.  Co.,  85 
Ins.  Co.,  6  Ind.  App.  502;  33  N.  East.  Ky.  677;  see  Knickerbocker  Ins.  Co. 
Rep.  989;  McMahon  v.  Ins.  Co.,  77  v.  Pendleton,  112  U.  S.  697;  Insur- 
Iowa,  229;  42  N.  W.  Rep.  179;  Bane  ance  Co.  v.  Ray,  50  Texas  511;  Kline 
v.  Ins.  Co.,  85  Ky.  677;  see  Pacific  v.  Association,  111  Ind.  462;  UN. 
Mutual  v.   Williams,   79   Texas,  633;  East.  Rep.  620. 

15  S.  W.  Rep.  478. 


ASSESSMENTS.  509 

its  agent  keep  running  accounts  with  each  other,  and  the 
society  agrees  to  charge  him  in  its  account  against  him,  with 
assessments  as  they  become  payable,  this  promise  is  valid  al- 
though its  by-laws  provide  for  the  payment  of  assessments  in 
cash.1  But  where  the  society  merely  charges  its  local  agent 
with  the  assessment  about  to  become  due  from  a  third  per- 
son, this  does  not  constitute  in  judgment  of  law  a  payment 
of  the  assessment.2 

The  beneficiary  of  a  member  is  not  entitled  to  a  proportion- 
ate part  of  the  amount  of  insurance,  when  only  a  part  of  the 
assessment  has  been  paid,  in  contravention  of  a  condition  of 
the  contract,  that  if  the  assessment  is  not  paid  by  a  certain 
time  the  insurance  shall  cease.*  Payment  of  part  of  an  assess- 
ment does  not,  by  itself,  raise  a  presumption  that  there  was  an 
understanding  that  time  was  to  be  given  for  the  payment  of 
the  remainder.4  "Where  there  is  nothing  in  the  contract  re- 
quiring the  monthly  dues  to  be  paid  in  advance,  they  may  be 
paid  at  any  time  during  the  month,  and  a  member  who  dies 
before  the  end  of  a  month  Avithout  paying  dues  for  that  month 
is  not  in  arrears.5 

§  271.  Payment  out  of  funds  in  the  hands  of  the  society. — 
It  has  been  held  that  a  society  which  has  money  in  its  posses- 
sion belonging  to  a  member,  and  the  poAver  to  so  apply  it, 
must  pay  out  of  such  money  an  assessment  due  from  the  mem- 
ber, to  save  a  forfeiture  of  the  contract;  and  it  is  not  necessaiv 
in  such  a  case  that  the  member  shall  authorize  the  society  to 
so  appropriate  the  money.  It  is  inequitable  and  against  the 
policy  of  the  law  to  permit  a  society  to  forfeit  a  contract  of 
insurance  for  non-payment  of  an  assessment,  when  it  has  in  its 
possession  the  money  of  the  member  to  an  amount  coArering 
the  assessment,  and  has  the  power  to  apply  the  money  as  a 

1  AHssouri  Valley  Life    Ins.  Co.  v.  Hollister  v.  Ins.  Co.,  118  Mass.    ITS; 

Dimklee,  16  Kan.  158;    see  Butler  v.  ilutson  v.  Ins.  Co.,  28  N.  J.  Eq.  167; 

Ins.  Co.,  42  N.  Y.  Sup'r  Ct.  342;  Mat-  Carlock  v.  Ins.  <  ....  188  111.  310;  28  X. 

ter    of   Booth,    11  Abb.   N.  C.  145;  East.  Rep.  53;  Bulger  v.  Ins.  Co.,  63 

Chickering  v.  Ins.  Co.,  116  Mass.  321;  Ga.  328. 

Marsh  v.  Ins.  Co.,3Biss.  351.  4 Continental    Life    v.    Willete,  24 

*  Wright  v.  Society,  41  N.  Y.  Sup'r  Mich.  268. 

Ct.  Repts.  1;    see  Brown  v.  Ins.  Co.,  :  Weiss  v.  Tennant,  21  N.  Y.  Supp. 

59  N.  H.  298.  252. 

'Wil'lcuts  v.  Ins.  Co.,  81  Ind.  300; 


510  ASSESSMENTS. 

payment.1  Where  a  society  had,  under  an  illegal  by-law,  re- 
tained sick  benefits  due  a  member  to  an  amount  largely  in 
excess  of  an  assessment  on  the  contract  of  insurance,  it  was 
held  that  such  an  assessment  should  have  been  paid  out  of  the 
money  so  retained,  and  that  a  forfeiture  for  non-payment 
could  not  be  declared.2  In  one  case 3  it  was  held  that  where  a 
member  of  a  subordinate  lodge  had  money  due  him  for  "  sick 
benefits,"  it  was  not  the  right  of  his  lodge  to  appropriate  it  in 
payment  of  an  assessment  ordered  by  the  grand  lodge,  with- 
out the  member's  direction,  Pryor,  C.  J.,  dissenting.  The 
majority  of  the  court  based  their  opinion  on  the  distinction 
between  the  funds  created  by  assessments  ordered  by  the 
grand  lodge,  which  were  for  the  benefit  of  the  families  of 
members  after  their  death,  and  the  dues  collected  by  the  sub- 
ordinate lodges,  which  were  for  the  payment  of  "sick  benefits" 
to  sick  members. 

By  the  laws  of  a  society  each  member  was  required  to  pay 
all  assessments  by  the  supreme  lodge  within  thirty  days  after 
notice  under  penalty  of  suspension  and  forfeiture  of  all  rights. 
By  the  laws  of  the  subordinate  lodge  he  was  liable  to  pay  dues 
and  fines,  and  was  entitled  to  five  dollars  a  week  when 
sick,  and  he  could  not  become  in  arrears  for  dues  and  fines 
when  sick,  as  they  were  required  to  be  taken  out  of  his  weekly 
benefit.  It  was  held  that  under  these  laws  the  sickness  of  a 
member  and  his  right  to  weekly  benefits  did  not  relieve  him 
from  his  obligation  to  pay  assessments  by  the  supreme  lodge 
and  that  his  sick  benefits  could  not  be  applied  to  the  payment 
of  them  since  such  application  was  confined  to  the  dues  and 
fines  of  the  subordinate  lodge.4 

Under  a  by-law  of  a  benevolent  association,  providing  for 
payment  of  benefits  in  case  of  sickness,  to  "every  member 
in  good  standing  on  the  books,"  a  member  can  not  be  de- 
prived of  such  benefits  because  in  arrear  for  dues,  where  the 

'Girard  Life  v.  Mutual  Life,  97  Pa.  Ins.  L.  Jour.  539;  see  Hawkshaw  v. 
St,  26;  Johnson  v.  Benefit  Ass'n,  2  Supreme  Lodge,  29  Fed.  Rep.  770: 
Daily  Record  (Baltimore  Cir.  Ct.)  441;  Eaton  v.  Supreme  Lodge,  22  Cent.  L. 
Pomeroy's  Equity,  §  364;  Knight  v.  J.  560;  Hansen  v.  Supreme  Lodge, 
Supreme  Council,  6  N.  Y.  Supp.  427.    140  111.  301;  29  N.  East.  Rep.  1121. 

2  Johnson  v.  Benefit  Association,  4  Hansen  v.  Supreme  Lodge,  140 
supra;  111.  301;  29  N.  East.  Rep.  1121. 

3  Ancient  Order  v.  Moore  (Ky.),  9 


ASSESSMENTS.  511 

amount  of  the  clues  in  arrear  is  less  than  the  benefits  to  which 
he  was  entitled  when  they  became  due.1 

A  society  has  no  power,  in  the  absence  of  a  provision  there- 
for in  its  certificates  or  its  rules  and  regulations,  to  charge  a 
member  with  an  assessment  made  before  he  became  a  member, 
or  for  losses  arising  prior  to  his  membership,  and  where  the 
money  deposited  by  a  member  to  meet  future  assessments  was 
sufficient  to  meet  all  lawful  assessments  made  before  his  death, 
he  will  not  be  in  default  by  reason  of  the  fact  that  the  society 
used  the  money  by  applying  it  on  an  assessment  made  prior 
to  his  becoming  a  member.2 

The  omission  to  pay  an  assessment  will  not  work  a  forfeiture 
when  the  society  has  without  right  received  from  the  member 
on  assessments  for  losses  occurring  before  he  joined  the  so- 
ciety a  larger  amount  than  such  unpaid  assessment.3  It  is 
not  a  valid  excuse,  on  the  part  of  a  member,  for  a  neglect  to 
pay  an  assessment,  that  the  society  owes  him  a  less  sum,  if  he 
does  not  offer  to  pay  the  remainder.4 

In  one  case  it  was  held  that  the  fact  that  at  the  time  of  the 
death  of  a  member  the  society  was  indebted  to  him  for  salary 
as  an  officer  in  an  amount  greater  than  the  amount  of  the 
assessments  due  from  him,  did  not  require  the  society  to  apply 
the  amount  due  to  the  payment  of  the  assessments.5 

1  Brady  v.  Coachman's  Benevolent  of  defaults.  The  accounts  with  LofF- 
Ass'n,  14  N.  Y.  S.  27:2.  ingwell    for    assessments    and    dues 

2  Evarts  v.  Association,  16  N.  Y.  were  kept  by  Eureka  lodge,  and  pay- 
Supp.  27.  tments  were   made  to  it.     It  is  true, 

Knight  v.  Supreme  Council.  6  N.  reports  of  the  standing  of  cadi  mem- 

Y.  Sup.  427;  see  Eaton  v.  Supreme  ber  and  of  those  in  arrears  were  for- 

Lodge,  22  Cent.  Law  Jour.  560.  warded,  from  time   to   time,  to  the 

4Hollister    v.    Insurance    Co.,    118  grand    lodge,   but    it  was  important, 

Mass.  478;  Bulger  v.  Ins.   Co.,  63  Ga.  in    order  to   avoid    confusion  of  ae- 

328.  counts,  and  to  know  the  duties  and 

6  Leffingwell   v.    Grand  Lodge,  86  obligations  of  the  subordinate  to  the 

Iowa,  279,  53  N.  W.  Rep.  843.     Leff-  grand  lodge,  that  the  method  of  pay- 

ingwell  was  a  salaried  officer  of  the  ment  required  by  the  rides  and  regu* 

grand  lodge,  and  a   member  of  Eu-  lations  he  followed,  that  the  honks 

reka  lodge,  one  of  the  subordinate  of  the  subordinate  lodge  should  show 

branches  of  the  society.    The  court  the  exact  standing,  including  arrear- 

said:    "  The  rules  and  regulations  of  ages,  of  each  member,     Our  atten- 

the  order  specified  the  time  and  man-  tion  has  qoI  been  called  to  any  provis- 

ner  of  the  payment  of  assessments  ions  of  the  contract  between  defend- 

and  dues,  and  fixed  the  consequences  ant  and  decedent  which  authorized 


512  ASSESSMENTS. 

§  272.     By  whom  payment  of  an  assessment  may  be  made. 

— Personal  contracts  must  be  performed  according  to  the 
words  and  apparent  meaning  of  the  parties,  and  it  is  obvious 
that  the  parties  to  a  contract  of  insurance  may  make  the  pay- 
ment of  an  assessment  a  personal  act  to  be  performed  by  the 
member  himself  during  his  life.  A  contract  stipulated  that 
the  society  should  pay  a  benefit  to  the  widow  of  a  member,  in 
consideration  of  certain  sums  to  be  paid  to  the  society  at  cer- 
tain times  during  his  lifetime,  and  provided  that  he  should 
pay  certain  sums  at  certain  times  during  his  life,  and  that,  if 
he  neglected  to  pay  any  such  sum  for  fifteen  days  after  it  be- 
came due,  the  contract  should  be  void.  A  member  died,  leav- 
ing a  payment  due  and  unpaid  at  the  time  of  his  death,  and 
his  executor  tendered  the  amount  within  fifteen  days  after  it 
became  due.  But  the  court  held  that  the  payment  of  any  such 
sum  was,  under  the  terms  of  the  contract,  a  personal  act  to  be 
performed  by  the  member,  and  that  it  could  not  be  performed 
for  him  after  his  death.1  But,  in  an  agreement  to  pay  money 
as  the  consideration  for  a  contract,  it  is  not  contemplated  that 
the  party  paying  shall,  by  the  act  of  paying,  render  to  the  one 
receiving  any  personal  service  requiring  personal  skill;  and,  in 
the  absence  of  stipulations  to  the  contrary,  the  payment  of  an 

the  former  to  receive  assessments  di-  the  amount  due  him,  and  been  re- 
rect  from  the  latter,  or  to  apply  any  fused,  or  had  he  requested  that  it  be 
money  in  its  hands  belonging  to  applied  in  payment  of  the  amount  he 
him  to  the  payment  of  such  assess-  owed,  a  different  question  would 
ments.  It  does  not  appear  that  Leff-  have  been  presented.  But  no  equi- 
ingwell  ever  desired  to  have  the  table  circumstances  are  shown  which 
amount  due  him  from  the  defendant  should  except  this  case  from  the 
applied  on  the  arrearages  in  question,  operation  of  the  general  rules.  *  * 
It  is  shown  that  a  few  weeks  before  *  Rules  which  govern  cases  where  an 
his  death,  and  at  a  time  when  he  insurance  company  dealing  directly 
was  sick,  the  amount  of  arrearages  with  the  person  insured,  and  hold- 
was  tendered  to  Eureka  lodge,  but  ing  unpaid  dividends,  which  it  had  a 
refused  because  not  accompanied  by  right  to  apply  on  unpaid  premiums, 
the  proper  certificate  of  a  physician,  are  not  applicable  to  such  cases  as 
It  is  said  that '  equity  looks  upon  that  this,  for  reasons  we  have  sufficiently 
as  done  which  ought  to  be  done,'  but   indicated." 

that  maxim  has  no  application  to  this  'Want  v.  Blunt,  12  East  183;  see 
case.  As  defendant  had  no  right  to  Whiting  v.  Ins.  Co.,  129  Mass.  240; 
make  the  desired  application,  it  ought  Yoe  v.  Association,  63  Md.  86;  Simp- 
not  to  have  made  it,  and  it  can  not  be  son  v.  Ins.  Co. ,  89  Eng.  Com.  Law 
regarded  as  having  been  made.  Had  Repts.  257  (2  C.  B.  N.  S.). 
Leffingwell  demanded    payment    of 


ASSESSMENTS.  513 

assessment  is  an  act  which  may  be  performed  by  any  other 
person  than  the  member.  Its  payment  does  not  necessarily 
depend  upon  his  continued  capacity  or  existence.  Hence,  it 
has  been  held  that,  although  an  insured  was  shortly  prior  to 
the  expiration  of  the  contract  of  insurance,  when  about  to  pay 
the  premium,  rendered  incapable  by  the  act  of  God,  the  bene- 
ficiary was  without  the  rule  which  relieves  a  party  from  the 
consequences  of  an  omission  to  do  an  act  rendered  impossible 
by  omnipotent  power.1  The  friends  and  relations  of  an  in- 
sured may,  and  often  do,  keep  up  his  insurance  for  years. 
The  act  is  not  a  personal  one,  unless  made  so  by  the  terms  of 
the  contract.2  Where  the  contract  provides  that  an  assess- 
ment shall  be  paid  within  thirty  days  from  the  date  of  notice, 
payment  within  that  time  will  preserve  the  validity  of  the 
contract,  though  made  by  the  beneficiary  after  the  death  of 
the  member.3  In  the  absence  of  any  stipulation  to  the  con- 
trary, the  payment  of  assessments  may  be  made  by  the 
beneficiary.4 

§  273.  When  payment  must  he  made  during  the  lifetime 
of  the  member. — A  society  may  in  its  contract  stipulate  that 
it  will  receive  delinquent  assessments  within  a  certain  time 
after  they  are  due  provided  they  are  paid  within  the  lifetime 
of  the  member.  In  such  a  case  the  member  does  not  forfeit 
his  contract  during  the  period  of  leniency  but  carries  it  at  his 
own  risk.  If  he  dies  during  such  period  the  contract  is  not 
binding  upon  the  society.  In  Lantz  v.  Ins.  Co.6  the  contract 
of  the  member  was  to  pay  certain  assessments  at  certain  times 
with  the  further  stipulation  that  if  an  assessment  should  not 
be  paid  when  due  and  within  the  lifetime  of  the  assured,  the 
policy  should  cease  and  determine.  It  was  held  that  a  con- 
tinual  practice  on  the   part  of    the    society   to   accept    past 

1  Howell  v.  Ins.  Co.,  44  N.  Y.  276;  Co.,  39  Fed.  Rep.  752;  Bankers"  Ass'n 

Wheeler  v.  Ins.  Co.,  82  N.  Y.  543;  16  v.  Stapp,  77  Texas  517;  14  8.  W.  Rep. 

Hun   317;     Broom's   Leg.    Max.    6th  168. 

Am.  Ed.  pp.  178  and  179;  see  ^  295.  8Bankers'   Association  v.  Stapp,  77 

•^Worden   v.  Guardian  .Mutual,  3!)  Texas  517;   MS    W.  Rep.  His. 

Sup'r  Ct.   Repts.  p.    317;    Baker  v.  *0'Grady  v.  Knights,  63  Conn,  228; 

Ben. -tit  Ass'n,  27  N.  Y.  Weekly  Dig.  25  Atl.  Rep.  111. 

91;  Kogersv.  Capitol  Life,  1  Weekly  5 130  Pa.  St.   546;  21   Atl.  Rep.  80; 

Notes  of  Cases  588;  Protection  Life  see  Harvey  v.   Grand  Lodge,  50  31o- 

v.  Palmer,  81  111.  88;  Spoeri  v.  Ins.  App.  472. 

33 


51-±  ASSESSMENTS. 

due  assessments  would  not  make  it  liable  on  its  policy 
where  such  an  assessment  was  not  paid  during  the  lifetime 
of  the  member.1  The  language  of  the  contract  may  be  such 
as  to  require  that  the  payment  of  the  assessment  be  made 
during  the  lifetime  of  the  member.  In  Simpson  v.  In- 
surance Co.,2  the  words  of  the  policy  were :  "  Provided  he,  the 
said  insured,  on  or  before  *  *  *  pay  or  cause  to  be  paid 
to  the  defendant  the  annual  premium;  "  and  on  this  point  the 
court  said  :  "  The  policy  was  to  continue,  provided  he,  the 
insured,  paid  the  premium  within  the  twenty-one  days;  and 
this,  we  think,  did  not  give  the  executors  the  right  to  pay  it 
after  his  death."  3 

In  Want  v.  Blunt  et  al.,4  the  covenant  of  the  society  was  to 
pay  an  annuity,  "  If  Want  shall  pay,  or  cause  to  be  paid,  the 
quarterly  premium  on  every  quarter  day  during  the  life  of 
Want,  or  within  such  time  after  as  shall  be  allowed  by  the 
rules  of  the  society  for  that  purpose."  The  rules  of  the 
society  provided  that  if  any  member  should  neglect  to  pay  the 
quarterly  premium  for  fifteen  days  after  the  same  should 
become  due,  the  policy  should  become  void.  The  member 
died  five  days  after  the  premium  was  due,  and  within  the 
fifteen  days  allowed  by  the  society  for  the  payment.  In  con- 
struing this  provision,  the  expression  "during  the  life  of 
Want,"  was  held  to  apply  to  the  latter  part  of  the  sentence, 
and  to  be  the  same  as  if  the  words  "  during  his  life  "  had  been 
repeated  after  the  words  "  within  such  a  time  after,"  i.  e. 
"  within  such  time  after,  during  his  life,"  etc.  The  decision 
was  based  upon  the  particular  words  of  the  contract,  and  would 
seem  to  be  contrary  to  the  established  rules  of  construction 
given  to  clauses  of  forfeiture. 

§  274.  Death  within  thirty  (lays  after  notice.— When,  by 
the  terms  of  a  contract  of  insurance,  an  assessment  is  payable 
at  a  certain  time,  "  or  within  thirty  days  thereafter  during 
the  continuance  of  this  certificate,"  there  can  be  no  forfeiture 

1  See  Yoe  v.  Association,  63  Md.  86;  82C.B.(N.S.)  257. 

Thompson  v.  Insurance  Co.,  104  U.  3See  Pritchard  v. Society,  3  C.  B. 

S.  252;  Insurance  Co.  v.  Eosenberger,  (N.  S.)  622;    Ins.  Co.   v.  Ruse,  8  Ga. 

84    Pa.   St.    373;    Insurance    Co.   v.  53 f. 

Rought,  97  Pa.   St.  415;    Whiting  v.  4  12  East  183. 
Ins.  Co.,  129  Mass.   240;  Giddings  v. 
Ins.  Co.,  102  U.  S.  108. 


ASSESSMENTS.  515 

for  non-payment  until  after  the  expiration  of  the  thirty  days; 
and  if  the  member  dies  after  the  certain  time  fixed,  but  before 
the  expiration  of  the  "  thirty  days  thereafter,"  the  society  is 
liable.1  This  is  not  the  case  of  the  death  of  the  insured  after 
the  premium  was  due,  and  within  the  days  of  grace.  In  such 
case,  it  is  settled  that  the  insured  can  only  take  ail  vantage  of 
the  days  of  grace  at  his  own  risk,  and  if  he  die  before  actual 
payment,  his  beneficiary  can  not  recover.  Where  the  condition 
of  a  contract  is  that  the  assured  shall,  within  thirty  days  from 
the  date  of  notice  pay  an  assessment  levied  upon  him,  the 
society  will  have  no  right  to  declare  a  forfeiture  for  non-pay- 
ment within  the  thirty  days,  even  though  the  member  dies 
within  that  time.'2 

§  275.  Payment  of  an  assessment  after  the  death  of  Uie 
member;  (lays  of  grace. — It  is  clear  that,  in  order  to  hold  the 
society  liable,  the  death  of  the  member  must  take  place  dur- 
ing the  continuance  of  the  contract  of  insurance.3  Where  a 
certain  time  is  set  for  the  payment  of  an  assessment,  and  days 
of  grace  are  given,  in  which  it  may  be  paid,  the  member  may 
take  advantage  of  them,  and  if  it  is  paid  or  tendered  during 
such  days  of  grace,  and  in  the  lifetime  of  the  member,  the  effect 
is  the  same  as  if  it  had  been  paid  or  tendered  when  due.4  But 
it  seems,  he  takes  advantage  of  them  at  his  peril,  and  if  he  dies 
during  such  days  of  grace,  without  having  paid  the  assess- 
ment, his  contract  is  forfeited,  and  his  beneficiary  can  not 
recover.5  But  the  effect  of  the  language  used  in  eiving  the 
days  of  grace,  may  be  such  as  to  absolutely  extend  the  period 
for  the  payment  of  the  assessment,  so  that  if  the  mem  her  shall 

'Rogers  v.  Capitol  Life.  1  Weekly  8  Howell  v.  Ins.  Co.,  11  X.  Y.  276; 

Notes  of  Cases  588;  Baker  v.  N.  Y.  Lockyerv.  Offiey,  1  T.  R.  260;  Perry 

St.    .Mutual.   27  X.  Y.  Weekly   Dig.  v.  Provided  Life,  99  Mass.  162. 

91;    Banker's    Association  v.  Stapp,  *  Campbell  v*  Assurance  Society,  4 

77    Texas    517:  It    8.  W.     Rep.    168;  Bosw.  298. 

Elmer  v.  Association,  19  N.  Y.  Supp.  *  Pritchard  v.  Assurance  Society,  8 

289;  MacKinnon  v.  In;.  Co.,  83  Wis.  C.  B.  (N.  S.)622;  Simpson  v.  Ins.  Co., 

12;  58  X.  W.  Rep.  19;  Wrighl  v.  Su-  89  Bng.  Com.   Law  Repte.  257;  Ruse 

preme  Commandery,  *7  Ga.  426.  v.  Mutual  Ben.  In--.  I  '<<..  28  X.  Y.  516; 

J Protection  Life  v.  Palmer,  81  Til.  Mutual   Ben.    Life  Ins.  Co.  y.   Ruse, 

88;  Ruse  v.  Mutual  Benefit,  26  Barb.  8Ga.534;  Day  v.  Ins.  Co.,   I   McAr- 

556;  Rogers  v.  Capitol  Life,  supra;  thur(D.  C.)41;  8  Ins.  L.  J.  253;  Tarle- 

Wright  v.   Supreme    Commandery,  ton  v.  Staniforth,  5  T.  R.  695, 
87  Ga.  426;  13  S.  East.  Rep.  504. 


516  ASSESSMENTS. 

die  within  the  days  of  grace,  the  society  is  still  bound  to  accept 
the  money.  Such  payment,  to  all  intents  and  purposes,  inures 
as  a  payment  within  the  time  limited,  so  as  to  entitle  the  bene- 
ficiary to  recover  the  benefit  fund,  even  though  the  member 
be  dead  at  the  time  the  assessment  is  paid.  When,  by  the 
terms  of  the  contract  an  assessment  is  payable  at  a  certain 
time,  "  or  within  thirty-five  days  thereafter,"  *  "  or  within  thirty 
days  thereafter,  during  the  continuance  of  this  certificate," 2  or 
when  it  is  payable  within  thirty  days  from  the  date  of  notice 
of  assessment,8  the  risk  is  extended  during  such  days  of  grace, 
and  the  assessment  is  not  due  until  they  expire.  If  a  member 
die  during  the  days  of  grace,  given  by  any  one  of  the  con- 
tracts just  mentioned,  leaving  the  assessment  unpaid,  it  may 
be  paid  by  the  beneficiary  or  some  one  for  him  after  the  death 
of  the  member,  and  within  the  time  limited.  It  is,  perhaps, 
doubtful  whether  the  beneficiary  need,  in  such  a  case,  pay  the 
assessment  to  the  society  4  but  it  is  usually  paid  or  tendered  as 
a  matter  of  precaution.  "Where  a  policy  was  renewable  from 
year  to  year,  but  provided  that  "  no  policy  will  be  considered 
valid  for  more  than  fifteen  days  after  the  expiration  of  the 
period  limited  therein,"  unless  the  premium  should  be  paid,  it 
was  held  that  the  society  was  liable  for  a  loss  occurring  after 
the  end  of  the  year,  and  before  the  expiration  of  the  fifteen 
days,  since  in  effect  the  contract  was  an  insurance  for  a  year 
and  fifteen  days.5 

§  276.  Payment  to  subordinate  lodge — Agency  of  lodges. 
■ — Where  a  local  lodge  admits  a  member  into  a  mutual  benefit 
society,  collects  his  admission  fee  and  all  assessments  levied 
upon  him,  and  remits  such  assessments  to  the  supreme  lodge 
or  directory  of  the  society,  it  is  to  be  regarded  as  the  agent  of 
the  supreme  lodge  or  directory,  at  least  to  this  extent,  that 
payment  of  assessments  to  the  local  lodge  is  a  payment  to  the 

1  Worden  v.  Ins.  Co.,  39  Superior  Bankers  Ass'n  v.  Stapp,  77  Texas  517; 
Ct.  Repts.  317.  14  S.  W.  Sep.  168. 

2  Rogers  v.  Capitol  Life,  1  Weekly  4  Worden  v.  Ins.  Co.,  supra;  Vivar 
Notes  of  Cases  589.  v.  Supreme  Lodge,  52  N.  J.  L.  455; 

3  Elmer  v.  Association,  19  N.  Y.  20  Atl.  Rep.  36;  Illinois  Order  v.  Bes-, 
Supp.  289;  Protection  Life  v.  Palmer,  terfield,  37  111.  App.  522. 

81  111.  88;  Wright  v.  Supreme  Com-       6  McDonnell  v.  Carr,  Hayes  &  Jones 
mandery,  85  Ga.  751;  Baker  v.  Bene-    (Irish),  256. 
fit  Ass'n,  27  N.  Y.  Weekly  Dig.  91; 


ASSESSMENTS.  517 

higher  body  of  the  order.  The  default  of  the  local  lodg-e  in 
paying  over  to  the  higher  body  of  the  order  the  assessments 
paid  to  it  by  its  members,  does  not  affect  the  rights  of  such 
members.1  The  relations  which  local  and  subordinate  lodges 
of  such  societies  shall  bear  to  the  supreme  lodge  or  directory 
and  to  the  members  of  the  order,  are  proper  matters  for  regu- 
lation in  the  by-laws  of  the  society.  Where  the  by-laws  on 
the  subject  are  artistically  and  plainly  drawn,  it  is  not  difficult 
to  determine  these  relations,  but  they  frequently  contain  so 
many  inconsistent  and  vague  provisions  on  the  subject  that  a 
consistent  interpretation  and  construction  of  them  is  impossi- 
ble. A  by-law  of  the  supreme  lodge  of  the  Knights  of  Honor 
provided  that  "  any  lodge  failing,  neglecting  or  refusing  to  for- 
ward the  same"  (the  assessment  laid  upon  it)  "within  thirty 
days  from  the  date  of  said  notice,  shall  stand  suspended,"  and 
that  "  if  a  death  occur  in  said  lodge  during  such  suspension,  no 
death  benefit  shall  be  paid,"  etc.  In  construing  the  meaning 
of  this  by-law  the  supreme  court  of  Indiana  said :  "  This  bv- 
law  contemplates  the  restoration  of  the  delinquent  lodge  on 
the  payment,  after  suspension,  of  the  required  assessment,  for 
it  prohibits  the  payment  of  such  benefits  when  death  occurs 
during  such  suspension.  Now,  the  question  arises,  what  is 
meant  by  the  words  '  if  a  death  occurs  in  such  lodge  during 
such  suspension,  no  death  benefit  shall  be  paid  \ ' 

"  Is  it  meant  by  the  provision  to  cut  off  absolutely,  as  for- 
feited, all  right  to  death  benefits  of  a  member  in  good  stand- 
ing, who  dies  during  the  suspension  of  his  lodge,  and  who  was 
not  in  default  in  the  payment  of  his  dues  or  otherwise,  be- 
cause his  lodge  was  in  default  at  the  time  of  his  death,  though 
his  lodge  afterward  pays  up  and  is  restored  ?  This  would  be 
a  harsh  construction,  and  one  that  can  not  be  adopted,  if  the 
provision  admits  of  any  other  reasonable  interpretation.  For- 
feitures are  not  favored  in  law,  and  instruments  will  be  so 
construed  as  to  avoid  them,  :'f  it  can  be  done  without  doing 
violence  to  the  language  employed.     *     *     We  think  the  pro- 

^chunck  v.  Gegenseitiger  Witt-  App.  127;  seeScheu  v.  Grand  Lodge, 
wen  und  Waisen-Foixl,  II  Wis.  369;  17  Fed.  Rep.  214;  Hall  v.  Supreme 
Erdmann  v.  Mut.  Ins.  Co.,  Order  Lodge,  24  Fed.  Rep.  4.r>0;  Hoffman  v. 
Herman's  Sons,  44  Wis.  376;  Barbaro  Supreme  Council,  35  Fed.  Rep.  262- 
v.  Occidental  Grove,  4  Mo.  App.  429;  Oates  v.  Supreme  Court,  4  Ontario 
Borgraefe  v.  Supreme  Lodge,  22  Mo.    535. 


518  ASSESSMENTS. 

vision,  fairly  construed,  means  that  where  death  occurs  during 
the  suspension  of  the  subordinate  lodge,  no  death  benefit  shall 
be  paid  during  such  suspension,  as  if  it  read  as  follows :  '  If 
a  death  occur  in  said  lodge  during  such  suspension,  no  death 
benefit  shall  be  paid  during  such  suspension.'  This  construc- 
tion seems  to  us  to  be  reasonable  and  well  calculated  to  carry 
out  the  general  purpose  of  the  defendant's  organization. 
When  a  subordinate  lodge  is  thus  suspended,  no  death  benefits 
are  to  be  paid  on  behalf  of  members  dying  during  the  suspen- 
sion. This  is  a  strong  incentive  to  the  delinquent  lodge  to  re- 
spond to  the  calls  upon  it,  and  be  restored.  When  restored, 
the  rights  to  death  benefits,  which  were  suspended  with  the 
suspension  of  the  lodge,  are  restored  with  its  restoration.', ' 
A  member  of  a  society  was  sick  and  unable  to  go  to  the  lodge, 
and  he  handed  the  amount  due  on  an  assessment  to  his  wife, 
and  directed  her  to  give  it  to  E.  to  carry  to  the  lodge.  As 
he  was  not  going,  E.  gave  it  to  the  member's  brother- in-laAv, 
D.  D.  went  into  a  saloon  and  gave  it  to  P.  who  was  the 
janitor  of  the  lodge  rooms,  but  who  had  no  authority  to  receive 
money  for  it.  P.  never  paid  it  to  the  lodge,  and  the  question 
was  as  to  whether  the  payment  to  him  was  sufficient.  The 
court  held  that  P.  was  not  the  agent  of  the  lodge,  but  of  the 
member,  and  that  payment  to  him  was  not  payment  to  the 
lodge.2  The  constitution  of  a  subordinate  lodge  of  a  society 
provided  that  the  secretary  should  receive  assessments  paid  by 
its  members  to  the  society,  and  that  the  lodge  might  per- 
mit him  to  select  an  assistant  for  whose  acts  he  should  be 
responsible.  The  secretary  of  the  lodge  had  no  office,  but  it 
was  the  uniform  practice  of  members  to  pay  assessments  to 
his  wife,  at  his  house,  in  his  absence,  and,  her  authority  to  re- 
ceive them  never  having  been  questioned,  she  was  held  to  be 
his  assistant  to  whom  payments  might  properly  be  made.3 

§  277.    Authority   of   agents  to  collect   assessments. — 
Where  a  person  is  an  agent  of  a  society  for  a  specific  purj)ose 

1  Supreme  Lodge  v.  Abbott,  82  Ind.  2  Fisber   v.  Schiller  Lodge  (Iowa) 

1;  but  see  Peet  v.    Great  Camp,  83  11  Ins.  L.  J.  164. 

Mich.  92,  47  N.  W.  Rep.  119,  where  3  Anderson  v.  Supreme  Council,  135 

the  suspension  of  a  subordinate  lodge  N.  Y.    107;   33  N.   East.    Rep.    1092; 

of  a  society  was  held  to  suspend  a  affirming  16  N.  Y.  Supp.  947, 
member  of  the  lodge  who  had  no 
notice  that  it  was  in  default. 


ASSESSMENTS.  510 

and  is  known  to  be  such  by  those  dealing  with  him,  he  can  not 
bind  the  society  by  an  act  done  without  the  scope  of  his 
authority.  If  his  authority  extends  only  to  the  single  act  of 
collecting  assessments  from  members,  and  he  collects  them 
from  a  stranger,  without  any  notification  from  the  society  that 
he  is  a  member,  he  can  not  thereby  bind  it,  force  upon  it  a 
member  whom  it  has  not  accepted,  and  render  it  liable  for 
benefits.  Authority  to  make  the  collection  or  a  subsequent 
ratification  of  the  unauthorized  act  must  be  shown.'  An 
agent's  authority  can  not  be  shown  by  his  own  declarations, 
and  a  party  who  avails  himself  of  the  act  of  an  agent  must,  in 
order  to  give  in  evidence  his  declarations  to  charge  his  princi- 
pal, prove  the  authority  under  which  the  agent  acted;  the  bur- 
den of  proof  lies  on  him  to  establish  the  agency,  and  the  extent 
of  it."  The  paymaster  of  a  railroad  company,  who  has  nothing 
to  do  with  making  out  the  pay-roll,  is  a  servant,  and  not  an 
agent,  and  has  no  authority  to  deduct  dues  owed  by  an  em- 
ploye to  an  employes'  relief  society,  though  its  constitution 
and  by-laws  authorize  the  company  to  do  so;  and  his  declara- 
tions that  the  deduction  had  been  made  are  inadmissible  in  an 
action  against  the  society.3 

§  278.  A  receipt  for  an  assessment  may  be  contradicted. 
— An  acknowledgment  in  a  certificate  of  membership  that  the 
admission  fee  and  certain  assessments  have  been  paid  may  be 
contradicted  or  explained;  it  is  not  conclusive,  and  does  not 
operate  as  an  estoppel.*  But  where  a  certificate  provided  that 
if  a  "binding  receipt"  should  be  issued,  and  the  "number  of  a 
binding  receipt  is  inserted,  it  becomes  conclusive  evidence  that 

1  Greene  v.  Ins.  Co.,  91  Pa.  St.  387;  is  authorized  to  use  discretion  then 
B.  &  O.  Ass'n  v.  Post,  122  Pa.  St.  he  ceases  to  be  a  servant  and  becomes 
579:  15  Atl.  Rep.  885;  Swettv.  Relief  an  agent.  Those  dealing  with  a  mere 
Society,  78  Me.  541;  7  All.  Rep.  304.  servant,    knowing   him    to   lie   such. 

2  B.  &  O.  Ass'n  v.  Post,  siqjra.  In  know  that,  except  in  the  immediate 
Wharton  on  Evidence,  at  section  discharge  of  a  mechanical  duty,  he 
1182  it  is  said:  "  We  must  rememher  is  not  authorized  to  hind  his  master 
that  a  servant  moves  within  a  limited  hy  Ins  admissions.  Hence,  ordinarily, 
orhit,  one  far  more  limited  than  that  a  master,  except  within  such  range, 
of  an  agent:  and  that  consequently  is  not  so  hound.'*  See  Fairlie  v. 
the.  admissions  of  a  servant  are  more  Hastings,  10  Ves.  126;  see§30l  note. 

jealously  guarded   than   are   those  of        3  B.    &    O.    Relief     Ass"n     v.    Post, 

an  agent.      An  agent  is  authorized  to    supra. 

exercise  discretion.     When  a  servant        4  See  Bliss  on  Life  Ins.  at  £  370. 


520  ASSESSMENTS. 

the  above  amount  has  been  paid,"  and  the  number  of  a  bind- 
ing receipt  was  inserted  in  the  certificate,  it  was  held  that,  as 
against  the  beneficiary,  the  insurer  was  estopped  from  show- 
ing that  the  assessment,  acknowledged  in  the  policy  and  in 
the  "binding  receipt"  to  have  baen  receive!,  had  not  been 
paid.1  Some  authorities  go  so  far  as  to  hold  that,  upon  grounds 
of  public  policy,  an  insurance  company  will  be  estopped  to 
deny,  as  against  its  acknowledgment  in  its  policy,  that  the 
consideration  for  the  policy  has  been  paid.2  But,  according 
to  the  weight  of  authority,  the  recital  in  a  delivered  policy, 
of  the  receipt  of  the  consideration  for  which  it  was  issued,  is 
prima  facie,  and  only  prima  facie  evidence  of  the  fact.3 

§  279.  Tender  of  an  assessment. — The  tender  of  an  assess- 
ment is  just  as  effectual  to  preserve  the  rights  of  a  subordi- 
nate lodge  and  its  members,  or  the  rights  of  a  member  of  a 
mutual  benefit  society,  as  the  payment  of  the  assessment.  For 
the  purpose  of  avoiding  penalties  and  forfeitures,  or  the  loss 
of  an}^  right  or  privilege,  a  tender  is  the  exact  equivalent  of 
payment.  It  does  not  have  to  be  repeated.  After  the  tender 
is  made,  the  burden  is  on  the  creditor  to  act.  He  must  demand 
the  debt,  and  it  is  only  required  of  the  debtor  that  he  be  ready 
to  meet  the  demand.4  In  mutual  benefit  societies,  the  holder 
of  a  certificate  is  entitled  to  notice  of  an  assessment  before  he 
can  be  declared  to  be  in  default  for  its  non-payment,  and,  in 
the  absence  of  notice,  no  tender  of  the  amount  of  such  assess- 
ment is  necessary,  in  order  to  prevent  a  forfeiture  of  member- 
ship.5 If  a  member  who  has  been  expelled  from  a  society  ap- 
peals to  a  higher  tribunal  within  the  order,  or  resorts  to  court 
for  reinstatement  as  a  member,  and,  pending  the  appeal  or 

1  Kline  v.  National  Benefit  Ass'n,  v.  Smith,  3  Whart.  520;  Sheldon  v. 
Ill  Ind.  462;  11  N.  E.  Rep.  620;  Na-  Ins.  Co.,  26  N.  Y.  460;  Baker  v.  Ins. 
tional  Benefit  Ass'n  v.  Jackson,  114  Co.,  43  N.  Y.  283;  Ins.  Co.  v.  Has- 
IU.  533.  brook,  32  Ind.  447. 

2  Provident  Life  v.  Fennell,  49  111.  4  Campbell  v.  Society,  4  Bosworth, 
180;  Teutonia  Life  Ins.  Co.  v.  Ander-  298;  Hall  v.  Supreme  Lodge  K.  of  H., 
son,  77  111.  384;  Grit  v.  National  In-  24  Fed.  Rep.  450;  People  v.  Mutual 
surance  Co.,  25  Barb.  189;  3  Kent's  Life,  92  N.  Y.  105;  Meyer  v.  Ins.  Co., 
Com.  260;  Insurance  Co.  v.  Cashow,  73  N.  Y.  516;  Roeding  v.  Sons  of 
41  Md.  59.  Moses,  11  N.  Y.  Supp.  712. 

3  1  Greenleaf  Ev.  at  section  305;  6  Covenant  Benefit  Ass'n  v.  Spks, 
Ins.  Co.  v.  Carpenter,  4  Wis.  20;  Berg-  114  111.  467. 

son  v.  Ins.  Co.,  38  Cal.   541;   Ins.  Co. 


ASSESSMENTS.  521 

legal  proceedings,  regularly  tenders  his  dues  and  assessments 
until  his  death,  his  beneficiary,  on  a  reversal  of  the  judgment, 
or  upon  a  reinstatement  by  the  court,  after  his  death,  will  be 
entitled  to  the  benefit.1  If  assessments  are  payable  only  after 
notice,  the  member  will  be  under  no  obligation  to  make  the 
tender  until  he  has  been  notified  of  the  assessment.2  Where  a 
society  has  declared  a  contract  forfeited,  and  has  refused  to 
receive  an  assessment  from  a  member,  his  subsequent  failure 
to  tender  assessments  will  not  affect  the  right  to  recover  on  the 
contract.3 

Where  the  constitution  of  a  society  provides  that  the  financial 
reporter  of  a  subordinate  lodge  shall  receive  all  moneys' due 
the  lodge,  and  give  a  bond  for  the  discharge  of  his  duties,  and 
does  not  authorize  any  other  person  to  receive  or  decline  a 
pa}rment  of  an  assessment,  and  a  notice  of  an  assessment  states 
that  it  must  be  paid  to  the  financial  reporter  only,  a  tender  of 
payment  of  the  assessment  to  the  secretary,  an  officer  not 
under  bond,  and  his  refusal  to  accept  it,  on  the  ground  that 
the  member  is  suspended,  are  ineffectual  to  bind  the  society. 
even  though  it  is  customary  for  the  secretary  and  other  officers 
to  receive  payment  of  assessments.4  For  the  accommodation 
of  the  members,  the  various  officers  of  a  lodge  frequently 
accept  dues  and  assessments,  and  pay  them  to  the  proper 
officer.  "While  the  practice  may  be  open  to  objection,  still,  so 
long  as  the  money  is  eventually  paid  into  the  treasury,  no 
harm  results.  But  when  one  of  these  voluntary  messengers 
declines  to  receive  them  from  a  member,  alleging  as  a  ground 
of  such  refusal  that  the  member  has  been  suspended,  it  be- 
comes a  serious  matter,  and  such  a  custom  may  not  be  shown 
to  vary  the  terms  of  the  constitution  or  the  directions  con- 
tained in  the  notice  of  assessment,  especially  where  it  does 
not  appear  that  the  supreme  lodge  had  notice  of  such  custom, 
But  where  a  society  knows  that  its  secretary  habitually 
receives  assessments  from  members  and  pays  them  over  to  it. 
it  is  estopped  to  deny  his  authority  to  receive  them,  uotwith- 

1  Marck  v.  Supreme  Lodge,  29  Fed.  23<i:  Meyer  v.  Ins.  Co..  73  X.  Y.  516; 
Rep.  896.  Miesell  v.  Ins.  Co..  Tii  X.  Y.  1 1:,. 

2  Vivar  v.  Supreme  Lodge  K.  of  P.,  4  Lazcnskv  v.  Supreme  Lodge,  K. 
52  N.  J.  L.  455;  20  Atl.  Rep.  36.  of  H.,  3  X.  Y.   Sup.  52;  lit  N.  V.  St. 

3Girard  Life  v.  Ins.  Co.,  86  Pa.  St.    Rep.  795. 


522  ASSESSMENTS. 

standing  its  by-laws  require  the  treasurer  to  receive  all  money 
clue  to  it.1  The  statement  of  an  officer  of  a  society,  that  a 
past  due  assessment  would  have  been  received  if  it  had  been 
tendered  is  not  competent  evidence.2 

§  280.  Refusal  of  society  to  accept  assessment — Remedy 
of  member. — Where  a  mutual  benefit  society  has  refused  to 
receive  from  the  member  the  amount  of  the  assessment  on  his 
certificate,  basing  such  refusal  on  the  ground  that  the  rights  of 
the  member  had  been  forfeited  by  non-payment  of  the  assess- 
ment at  the  time  stipulated  for  its  payment,  the  member,  if  the 
refusal  is  wrongful,  has  an  election  of  remedies.  He  may,  if  it 
be  practicable  under  the  plan  of  paying  assessments,  tender  the 
assessments  as  they  become  due  until  the  certificate  is  payable, 
and  then  his  beneficiary  may  recover  the  amount  provided  for 
therein  in  an  action  on  the  contract.3  He  may,  in  an  action 
for  the  rescission  of  the  contract,  recover  back  the  assessments 
paid,  with  interest; 4  or  he  may  maintain  an  action  to  obtain 
a  decree  ordering  that  the  certificate  be  continued  in  force 
and  recognized  as  valid  by  the  society.6 

§  281.  Effect  of  the  return  of  assessments  once  paid. — 
When  the  payment  of  an  assessment  has  been  made  within  the 
prescribed  time,  or  has  been  received  by  the  society  under 
such  circumstances  as  to  waive  the  forfeiture  for  failure  to  pay 
it  promptly,  the  return  of  the  money  to  the  member  or  his 
beneficiary  will  have  no  effect  upon  the  rights  of  the  parties." 
After  the  time  had  passed  for  the  payment  of  an  assessment, 
an  agent  of  the  society  called  upon  the  wife  of  a  member  and 
collected  it  from  her,  giving  her  a  receipt  for  it.  The  mem- 
ber had  been  drowned  the  day  before,  but  neither  the  wife  nor 
the  agent  knew  that  fact.  The  officers  of  the  society  learned  of 
the  fact  before  the  money  was  paid  into  the  treasury,  and 
refused  to  receive  it.     The  day  after  the  member  was  buried, 

1  Roeding  v.  Sons  of  Moses,  11  N.  ker,  33  Oh.  St.  459;  Meyer  v.  Knick- 

Y.  Supp.  712.  erbocker  L.  Ins.  Co.,  73 N.  Y.  516;  Day 

2 Painter  v.  Association,  14  Ins.  L.  v.  Conn.  Gen.  L.  Ins.  Co.,  45  Conn. 

J.  556.  480;  May  on  Ins.  at  section  356  et  seq.; 

3  Oates  v.  Supreme  Court,  4  Ontario  N.  Y.  Life  Ins.  Co.  v.  Statham,  93 
535.  U.  S.  24;  Phoenix  Ins.  Co.  v.  Baker,  85 

4  True  v.  Association,  78  Wis.  287;  111.  210. 

47  N.  W.  Rep.  520.  6  Burlington  Relief  v.  White  (Neb.), 

5  Union  Cent.  L.  Ins.  Co.  v.  Pott-   59  N.  W.  Rep.  747. 


ASSESSMENTS.  523 

the  agent  called  upon  the  widow,  and  explained  to  her  the 
facts.  She  took  back  the  money  which  she  had  paid,  and  gave 
up  the  receipt  which  she  had  received  of  him  for  it.  The  court 
held  that  the  widow,  in  taking  back  the  money  which  she  had 
paid  and  in  giving  up  her  receipt  therefor,  did  not  release  her 
rights  in  the  fund — the  consideration,  $1,  the  amount  of  the 
assessment  returned,  being  grossly  inadequate,  as  the  fund 
amounted  to  $264;  that  the  consideration  of  hardship  upon 
the  society  had  no  weight,  as  it  only  lost  the  interest  on  $1  for 
a  few  days,  and  it  might  have  had  the  dollar  at  any  time  by 
asking  for  it.1 

§  282.  Recovery  of  assessments  paid  by  a  member. — The 
provisions  of  a  life  insurance  policy  are  construed  and  applied 
like  the  terms  of  any  other  contract,  and  such  provisions  may 
render  the  policy  void  ab  initio.  The  risk  may  never  have 
attached,  by  reason  of  misrepresentations  or  breach  of  war- 
rant}'' of  the  assured,  without  fraud  on  his  part.  In  such  cases, 
he  may  recover  back  all  the  premiums  he  may  have  paid;  But 
when  the  risk  has  attached,  premiums  paid  during  the  continu- 
ance of  the  policy  can  not  be  recovered.2  These  principles  are 
applicable  to  assessments  in  mutual  benefit  societies.3  "Where 
the  charter  of  a  mutual  benefit  society  provides  that  the  benefit 
fund  shall,  upon  the  death  of  a  member,  be  paid  to  his  widow 
and  children,  they  are  entitled  to  the  fund,  although  another 
person  is  named  in  the  certificate  of  membership  as  the  bene- 
ficiary, and  has  paid  all  the  assessments  upon  the  certificate. 
The  certificate  must  be  construed  in  connection  with  the  char- 
ter as  a  contract  to  pay  to  the  widow  and  children  of  the 
member  the  amount  of  the  insurance.  If  a  certificate  in  such 
a  society  is  made  payable  to  a  creditor  of  the  member,  it  is 
not  void,  but  is  an  existing  contract  in  favor  of  the  member's 
wife  and  children.  As  it  is  not  void,  the  creditor  can  not  re- 
cover of  the  society  the  amount  of  the  assessments  which  he 
has  paid  to  it  in  consideration  of  the  insurance.  Upon  the 
death  of  the  member,  however,  he  is  entitled  to  have  restored 

1  Mutual  Relief  Society  v.  Billau  "Matt  v.  Society,  70  Iowa  465;  30 
(Superior  Court  of  Cincinnati),  8  Am.  N.  W.  Rep.  799:  Gray  v.  Association, 
Law  Record  546.  Ill  Ind.  531;  11  N.  East.  Rep.  477. 

2  May  on  Insurance  at  section  567; 
Bliss  on  Life  Insurance  at  section 
415. 


524  ASSESSMENTS. 

to  him  all  that  he  has  expended  for  the  benefit  of  the  benefi- 
ciaries named  in  the  charter.1  Where  the  provisions  of  an  act 
for  a  relief  fund  by  contributions  from  the  members  of  an 
order,  such  as  a  police  force,  can  not  be  carried  into  effect  with- 
out compulsory  contributions,  and  the  courts  decide  that  such 
contributions  are  not  compulsory  under  the  act,  payments 
made  before  the  decision,  under  the  belief  that  they  were 
compulsory,  or  unwillingly  and  under  protest,  should  be  re- 
funded; the  object  of  the  act  having  failed,  no  benefit  under 
the  act  was  acquired  pending  the  decision.2 

§  283.  Promise  of  the  society  to  receive  a  past  due  as- 
sessment.— The  promise  of  a  society  to  receive  an  assessment 
made  without  any  consideration  and  after  the  assessment  is 
past  due,  is  not  binding  on  it.  The  promise  of  a  society  to 
waive  a  right  of  forfeiture  must  either  be  supported  by  a 
valuable  consideration,  or  it  must  be  made  by  or  on  behalf  of 
the  society  while  the  member  still  has  time  and  opportunity 
to  make  payment/  But  an  agreement  by  the  society  before 
default  to  extend  the  time  of  payment  of  an  assessment  is  sup- 
ported by  a  sufficient  consideration  in  the  fact  that  the  con- 
tract is  thereby  kept  alive  for  the  benefit  of  both  parties.4  It 
has  been  held  that  as  the  acceptance  of  a  premium  after  the 
time  when  it  should  have  been  paid  is  a  waiver  of  the  forfeit- 
ure, precisely  the  same  effect  should  be  given  to  an  agreement 
to  accept  at -a  future  time  such  overdue  premium  and  a  tender 
in  pursuance  of  such  agreement.  In  speaking  of  acts  show- 
ing an  election  to  continue  the  existence  of  a  contract  of  in- 
surance, and  to  waive  a  forfeiture  incurred,  it  was  said  in  one 
case: 5  "  It  is  conceded  that  this  acceptance  of  a  payment  has 

'Gibson    v.    Ky.    Grangers'    Mut.  278;  Underwood  v.  Farmers",  etc.,  Ins. 

Ben.   Society,  8  Ky.   L,  Rep.  (Sup'r  Co.,  57  N.  Y.  500;  Lantz  v.  Ins.  Co., 

Ct.)  520;   Ky.  Grangers'   Mut.   Ben.  139  Pa.  St.  546;  21  Atl.  Rep.  80. 

Soc.   v.    McGregor,   7  Ky.    L.    Rep.  4  Mich.  Mutual  v.  Custer,    128  Ind. 

(Sup'r  Ct.)  750.  25;  27  N.  East.   Rep.    124;  Homer  v. 

2  Murray  v.  Buckley,  1  N.  Y.  Sup-  Ins.  Co.,  67  N.  Y.  478;  Wyman  v. 
plement  247.  As  to  recovery  of  as-  Ins.  Co.,  119  N.  Y.  274;  23  N.  East, 
sessments,  see  U,  S.  Ins.  Co.  v.  Rep.  907;  Ins.  Co.  v.  Tomlinson,  125 
Wright,  33  Oh.  St.  533;  Douglas  v.  Ind.  84;  25  N.  East.  Rep.  126;  Sweet- 
Ins.  Co.,  83  N.  Y.  492;  Knights  v.  ser  v.  Association,  117  Ind.  97;  19  N. 
Burke  (Texas),  15  S.   W.    Rep.   45;  East.  Rep.  722. 

Frain  v.  Ins.  Co.,  67  Mich.  527;  N.  A.  5  Insurance  Company  v.  Norton,  96 
Ins.  Co.  v.  Wilson,  111  Mass.  542.  U.  S.  234. 

3  Marvin  v.  Universal  Life,  85  N.  Y. 


ASSESSMENTS.  525 

this  effect;  and  we  do  not  see  why  an  agreement  to  accept  and 
a  tender  of  payment  according  to  the  agreement  should  not 
have  the  same  effect.  Both  are  acts  equally  demonstrative  of 
the  election  of  the  company  to  waive  the  forfeiture  of  the 
policy." ' 

§284.  Reimbursement  of  one  who  has  paid  assessments 
for  another.- — The  payment  of  assessments  by  a  stranger 
without  any  contract  with  the  member  or  the  person  entitled 
to  the  benefit  of  the  insurance,  gives  him  no  title  to,  or  lien 
on  the  benefit  fund.  In  the  eye  of  the  law,  the  person  mak- 
ing such  payments  is  a  mere  volunteer.  Assessments  volun- 
tarily paid  on  a  contract  of  life  insurance  belonging  to  another 
can  not,  in  the  absence  of  an  agreement,  be  recovered  of  the 
beneficiary;  and  the  person  making  such  payments  has  no  lien 
for  them  on  the  benefit  fund  collected  by  him  as  agent  of  the 
beneficiary.2  Where  by  the  terms  of  the  assignment  by  a 
member  of  a  contract  of  insurance,  to  a  creditor  to  secure 
his  debt,  the  assignee  is  to  pay  the  assessments,  and  these  are 
to  be  repaid  out  of  the  proceeds  of  the  insurance  when  collected, 
the  statutes  of  limitation  do  not  apply  to  assessments  paid 
more  than  six  years  before  the  contract  matured  or  the  suit 
was  commenced  on  it.3 

1  See  Murray  v.  Association,  90Cal.  Muehl,  81  Ky.  336;  National  Mutual 
402;  Viele  v.  Ins.  Co.,  26  Iowa  9;  96  v.  Lupoid,  101  Pa.  St.  Ill;  Gibson  v. 
Am.  Dec.  83;  Queen  Ins.  Co.  v. Young,  Society,  8  Ky.  L.  Rep.  520;  Kentucky 
86  Ala.  424;  Titus  v.  Ins.  Co.,  81  N.  Grangers  v.  McGregor,  7  Ky.  L.  Rep. 
Y.  419;  see  §  307.  750. 

2  Meier  v.  Meier,  15  Mo.  App.  68;  3  Walker  v.  Larkin,  127  Ind.  100; 
affirmed,  88 Mo.  566;  see  Lockwood  v.  26  N.  East.  Rep.  684. 

Bishop,  51  How.  Pr.  221;  Weisert  v. 


CHAPTER  XX. 

ASSESSMENTS. 

§  285,  286.     Forfeiture  for  non-payment  of  an  assessment. 
287,  288.     When  an  affirmative  act  of  the  society  declaring  the  forfeiture 

is  necessary. 
289,  290.     When  an  affirmative  act  of  the  society  declaring  the  forfeiture 

is  not  necessary. 
291-294.     Restoration  after  suspension  or  forfeiture  for  non-payment. 

295.  Excuse  for  non-payment,  insanity,  act  of  God. 

296.  Excuse  for  non-payment,  Sunday,  holiday. 

§  285.     Forfeiture  for  non-payment  of  assessment. — In 

mutual  benefit  societies  provision  is  made  either  in  the  char- 
ter, by-laws,  or  certificates  of  membership  for  assessments 
upon  members  to  pay  death  losses,  and  for  forfeiture  of 
all  rights  of  membership,  in  case  assessments  are  not  paid 
in  accordance  with  the  rules  and  regulations.  As  these  soci- 
eties have  no  means  of  meeting  their  obligations,  except  from 
assessments  on  their  members,  it  is  proper  and  necessary  to 
make  stringent  provisions  for  their  prompt  payment.  Pro- 
visions for  forfeiture  in  case  of  non-payment  within  a  certain 
stipulated  time  have  been  repeatedly  held  to  be  valid  and 
binding  in  ordinary  life  policies,  and  there  are  many  reasons 
why  they  should  be  more  rigidly  applied  in  mutual  assessment 
societies.1  As  has  been  heretofore  stated,  the  levy  of  an 
assessment  by  a  mutual  benefit  society,  as  a  general  rule, 
creates  no  liability  on  the  part  of  the  member  to  pay,  and  it 
is,  therefore,  apparent  that  rigid  and  stringent  provisions  for 
forfeiture  for  non-payment  of  assessments  are  necessary  for 
the  existence  of  such  societies.  A  certificate  of  insurance, 
issued  to  one  of  its  members  by  a  society,  in  which  the  plan  of 
meeting  its  losses  and  expenses  is  by  levying  assessments  upon 
its  members,  is  not  forfeited  or  suspended  by  the  failure  of  a 
member  to  pay  an  assessment  thus  levied,  unless  such  for- 

1  Madeira  v.  Merchants'  Exchange  Mutual,  16  Fed.  Rep.  749. 

(526) 


ASSESSMENTS.  527 

feiture  or  suspension  is  provided  for  as  a  part  of  the  contract 
of  insurance.'  A  contract  provided  that  assessments  should 
be  made  at  stated  times  to  meet  claims  by  death,  and  that  a 
member  failing:  to  receive  a  notice  of  an  assessment  should 
notify  the  home  office  of  that  fact.  This  duty  of  the  member 
was  not  made  a  condition,  the  non-performance  of  which 
would  cause  a  forfeiture  of  membership,  and  his  failure  to 
inform  the  society  that  he  had  not  received  notice  of  an 
assessment  was  immaterial,  and  could  not  excuse  its  failure  to 
give  the  required  notice.2  It  is  sometimes  said  that  forfeitures 
are  odious  in  law,  but  this  expression  is  too  strong.  Forfeit- 
ures are  not  favored,  but  they  will  be  enforced  for  a  breach  of 
the  condition  agreed  upon  when  this  condition  is  clearly  set 
forth  and  the  intention  of  the  parties  is  manifest.  Technical 
constructions  in  aid  of  forfeitures  will  never  be  given,  but,  on 
the  contrary,  an  instrument  will  be  continued  as  binding  if  it 
can  be  done  without  violence  to  its  express  provisions/' 
One  of  the  by-laws  of  a  society  provided  for  giving  written 
notice  to  any  member  in  arrears  six  months  for  dues,  calling 
his  attention  to  the  fact  that  his  name  would  be  stricken  from 
the  roll,  in  case  he  did  not  pay  his  dues.  Another  by-law 
imposed  a  fine  for  an  omission  of  a  member  to  give  notice  to 
the  society  of  a  change  of  residence.  At  the  time  he  was 
admitted,  plaintiff's  intestate  gave  notice  of  his  then  place  of 
residence.  lie  subsequently  changed  his  residence,  but  did 
not  give  notice.  Because  of  failure  to  pay  his  dues,  his  name 
was  stricken  from  the  rolls.  No  notice  was  given  him  ;is  pro- 
vided by  the  by-laws.  In  an  action  brought  after  his  death  to 
recover  the  benefit  fund,  it  was  held  that  plaintiff  was  entitled 
to  recover;  that  the  omission  of  the  deceased  to  give  notice  of 
his  change  of  residence  was  noexcuse  fora  failure  to  give  him 
the  prescribed    notice.4     Where  the  contract  of  insurance  is 

'District  Grand  Lodge  v.  Cohn,  20  Co.,  44  Wis. 876;  Schunck  v.  Society, 

111.   App.  335;    Sanford  v.  CaL   Ens.  M   Wis.  369,  372;  Bates  v.  Ass'n,  51 

Association,  68  Cal.  547;  Mut.  Ben.  Mich,    r>s;;    i    Am.   &    Eng.    Corp. 

Life  Ins.  Co.  v.  French,  30  Ohio  St.  Cases,  L86;  Franklin  Life  v.  Wallace, 

240.  93  tad.  7:  Supreme  Lodge  v.  Abbott, 

•Mutual  Reserve  v.  Hamlin,    L89  B2  Ind.  1:  11  Ins.  L.  J. 907;  Symonds 

U.  S.  297;  11  Sup.  Ct.  Rep.  61  I.  v.  Ins.  Co.,  28  Minn.   191. 

"Miner    v.    Association,   <'.:;    .Midi.  *Wachtel  v.  Widows  and  Orphans' 

338;  29  N.  W.  Rep.  838;  Hull   v.  [ns.  Society,  S4  N.  Y.  28. 
Co.,   39  Wis.  :;'.iT;    Erdmann   v.   Ins. 


528  ASSESSMENTS. 

silent  as  to  whether  a  member  in  default  shall  have  notice  of 
his  proposed  expulsion,  such  notice  must  be  given  in  order 
that  he  may  have  an  opportunity  to  be  heard.1  Where,  by 
the  by-laws,  notice  is  required  to  be  given  to  members  who 
fail  to  pay  their  assessments,  there  can  be  no  forfeiture  with- 
out such  notice.2  A  by-law  of  a  society  is  to  the  effect  that, 
"  when  a  member  neglects  for  six  months  to  pay  his  con- 
tributions, or  the  entire  amount  of  his  entrance,  the  society 
may  strike  his  name  from  the  list  of  members,  and  thereupon 
he  no  longer  forms  part  of  the  association.  To  that  end,  at 
each  regular  general  meeting  the  collectors-treasurers  are 
bound  to  make  known  the  names  of  those  thus  indebted  for 
six  months'  contributions,  or  for  a  balance  of  their  entrance; 
and  thereupon  any  member  may  make  a  motion  that  such 
members  be  struck  from  the  list  of  the  society's  members." 
Under  this  by-law,  a  member  may  not  be  expelled  without 
notice  and  opportunity  to  be  heard  upon  the  subject  of  his 
arrearage.3  Such  a  by-law  does  not  take  from  a  delinquent 
member  either  expressly  or  by  implication,  the  right  to  notice, 
and  this  right  is  valuable,  because,  on  such  notice,  a  member 
may  give  a  sufficient  excuse  for  his  delinquency,  or,  on  hear- 
ing him,  the  society  may  be  inclined  not  to  exercise  rigor  in 
enforcing  the  penalty  of  default. 

A  mutual  benefit  societ}7-  was  organized  for  the  express  pur- 
pose of  becoming  the  successor  of  "  The  Widows'  and  Orphans' 
Mutual  Aid  Society."  A  resolution  of  the  new  society  pro- 
vided for  the  surrender  of  the  old  certificates,  and  the  issue  of 
new  certificates  by  it  as  successor,  and  further  provided  :  "  All 
assessments  made  by  the  old  society  on  its  members,  not  due 
at  the  time  of  transfer  of  the  member  from  the  old  to  the  new 
organization,  shall  become  due  and  payable  to  the  latter  on  the 
day  it  would  become  due  and  payalle  to  the  society,  had  the 
member  not  been  transferred  therefrom."  A  member  surren- 
dered his  old  certificate  and  received  a  new  one  from  the  new 
society.     This  stipulated  for  the  payment  of  a  certain  sum,  and 

1  Fritz  v.  St.  Stephen's  Society,  62  nevolent  Society,  24  How.  Pr.  216; 
How.  Pr.  69;  see  §  61.  Mutual  Reserve  v.  Hamlin,  139  U.  S. 

2  Pulford  v.   Fire  Department,  31    297;  11  Sup.  Ct.  Rep.  614. 

Mich.  458;  Wachtel  v.  Benevolent  3Lapierre  v.  L'Union  St.  Joseph, 
Society,  84  N.  Y.  28;  People  v.  Be-    21  Lower  Canada  Jurist  332. 


ASSESSMENTS.  529 

provided  that  "  a  failure  to  pay  at  the  home  office  any  assess- 
ment made  by  the  society  within  the  prescribed  time,  shall 
work  a  forfeiture  of  this  certificate,  and  the  party  can  only  be 
reinstated  on  terms  as  set  forth  in  the  by-laws."  In  an  action 
on  the  certificate,  the  society  set  up  the  non-payment  by  the 
deceased  member  of  an  assessment  made  against  him  by  the 
old  organization  to  meet  a  death  loss  while  he  was  a  member 
thereof,  and  which  sum,  by  the  terms  of  the  resolution  under 
which  he  was  admitted  to  membership  in  the  new  society, 
became  payable  to  it,  but  it  was  held  that,  under  the  contract, 
a  failure  to  pay  assessments  made  by  the  new  society,  not  by 
the  old,  worked  a  forfeiture.1  Where  the  by-laws  of  a  society 
require  written  notice  of  forfeiture  to  be  given,  proof  of  any 
other  notice  is  properly  excluded.2 

A  certificate  was  issued  to  a  member  in  consideration  of  a 
membership  fee  of  $10  pai'd,  '-and  the  further  payment  of 
one  assessment  within  thirty  days  after  the  date  of  such 
assessment,  whenever  made  in  accordance  with  the  terms  and 
conditions  of  the  constitution  and  by-laws  of  the  association, 
as  they  may  now  exist  or  may  hereafter  be  modified."  A  by- 
law provided  that  "  every  member  failing  to  pay  his  assessment 
within  thirty  da}^s  from  the  date  of  said  assessment,  shall 
stand  suspended  from  all  benefits  and  privileges  of  the  associa- 
tion." A  proper  construction  of  this  contract  is,  that  if  one 
assessment  is  not  paid  within  the  time  as  therein  provided,  it 
shall  be  null  and  void;  but  it  does  not  mean  that  unless  one 
assessment  is  paid,  there  can  be  no  recovery.  There  may  be 
no  assessment  made  after  the  issuing  of  the  certificate  and  be- 
fore the  death  of  the  member,  and  in  that  case  the  beneficiary 
may  recover.' 

§  286.  It  will  not  be  presumed  that  some  other  person  than 
the  member  has  paid  his  assessment,  and  an  averment  that  a 
deceased  member  did  not  pay  an  assessment  within  the  stipu- 
lated time  after  notice  is  good  as  showing  that  it  was  not  in 
fact  paid.  If  it  has  been  paid  by  some  other  person,  such 
payment   may  properly  be   set  up  in  the    pleadings  by  the 

1  Abe  Lincoln  Society  v.  Miller,  23  560;  8  S.  E.  Rep.  27;  see  §61  et  seq. 

111.  App.  34.  »  Stanley  v.   N.  W.  Life  Ass'n,   36 

8  Dial  v.  Valley  Mutual,  29  S.  C.  Fed.   Rep.  75. 
34 


530  ASSESSMENTS. 

plaintiff.'  Under  the  constitution  of  a  society  which  provides 
that  a  member  shall  be  entitled  to  funeral  benefits  if  he  is 
"  not  more  than  three  months'  dues  in  arrears  at  the  time  of 
his  death,"  a  member  whose  dues  are  in  arrears  for  three 
months,  and  who  dies  the  day  before  the  dues  for  the  follow- 
ing month  are  payable,  is  entitled  to  funeral  benefits."  The 
dues  of  members  of  a  lodge  may  accrue  weekly  and  be  paya- 
ble quarterly.  In  such  a  case  a  forfeiture  may  not  be  claimed 
until  after  the  quarterly  installment  has  become  delinquent.3 
Where  the  suspension  of  a  member  is  illegal,  the  refusal  of  the 
subordinate  society  to  credit  him  with  assessments  paid  there- 
after, or  to  give  to  the  proper  officers  the  required  notice  of 
his  death  does  not  prejudice  the  right  of  his  beneficiary  to  re- 
cover on  the  certificate,  when  he  has  done  everything  required 
of  him  by  the  contract.4 

When  by  the  terms  of  a  contract  of  insurance,  an  assess- 
ment is  payable  at  a  certain  time,  "  or  within  thirty  days  there- 
after during  the  continuance  of  this  certificate,"  there  can  be 
no  forfeiture  for  non-payment  until  after  the  expiration  of  the 
thirty  days ;  and  if  the  member  dies  after  the  certain  time 
fixed,  but  before  the  expiration  of  the  "  thirty  days  thereafter," 
the  society  is  liable.5  This  is  not  the  case  of  the  death  of  an 
insured  after  the  premium  for  the  insurance  is  due,  and  within 
the  days  of  grace.  In  the  latter  case,  it  seems  to  be  settled 
that  the  insured  can  only  take  advantage  of  the  days  of  grace 
at  his  own  risk,  and  if  he  dies  before  actual  payment,  his  ben- 
eficiary can  not  recover.6  A  waiver  of  forfeiture  on  the  part 
of  the  society,  procured  by  false  representations,  is  void.7 
Punctuality  in  the  payment  of  assessments  is  of  the  very  es- 
sence of  the  contract,  and,  when  payment  is  not  made  within 
the  stipulated  time,  the  society  may  forfeit  the  contract.  The 
burden  is  upon  the  society  to  establish  the  failure  of  the  mem- 
ber to  pay  an  assessment  within  the  stipulated  time.8    A  mem- 

1  Gray  v.  Supreme  Lodge,  118  Ind.  6  Protection  Life,  etc. ,  v.  Palmer,  81 
293;  20  N.  East.  Rep.  833.  111.  88;  Rogers  v.  Capitol  Life,  1  Week- 

2  Sherry  v.  Union,  139  Pa.  St.  470;  ly  Notes  of  Cases  589:  Baker  v.  N.  Y. 
20  Atl.  Rep.  1062.  St.  Mutual,  27  N.  Y.  Weekly  Dig.  91; 

3  Strasser  v.  Staats,  13  N.  Y.  Supp.  see  §  274. 
167.  6  See  §  275. 

4  Spoeri  v.   Ins.  Co.,  39  Fed.  Rep.       1  Harris  v.  Society,  64 N.  Y.  196. 
752.  8Tobin  v.  Society,  72  Iowa,  261;  33 


ASSESSMENTS.  531 

ber  is  in  good  standing  in  a  mutual  benefit  society  so  long  as 
he  faithfully  performs  his  duty  as  a  member  of  the  society  and 
regularly  pays  or  tenders  his  dues  and  assessments.  The  so- 
ciety can  not  deprive  him  of  any  rights  by  wrongfully  refusing 
to  accept  dues  and  assessments  tendered  by  him  under  the  con- 
tract of  insurance.  A  member  of  a  subordinate  court  of  the 
supreme  court  of  the  Independent  Order  of  Foresters  was  in- 
sured under  the  endowment  provisions  thereof,  for  $1,000. 
This  court  left  the  order  in  a  body,  and  was  consequently 
suspended.  By  the  rules  of  the  order  members  of  suspended 
courts  in  good  standing  at  suspension  were,  on  application 
within  thirty  days  to  the  supreme  secretary  and  payment  of 
a  fee  of  $1,  to  receive  a  card  of  membership  and  be  entitled  to 
the  endowment,  provided  they  paid  all  assessments  as  they 
fell  due,  and  affiliated  with  another  lodge  of  the  order ;  but,  if 
after  thirty  days,  they  must  pass  a  medical  examination.  The 
member,  ascertaining  that  his  court  had  been  suspended  from 
the  order  and  being  then  in  good  standing,  applied  within 
thirty  days,  to  the  supreme  secretary  of  the  order  for  his  card 
of  membership,  tendering  $1,  and  assessments  due,  which 
were  refused  on  the  ground  that  a  medical  certificate  was  nec- 
essary. The  member,  by  reason  of  his  not  having  the  card, 
was  prevented  from  affiliating  with  another  court,  though  he 
endeavored  to  do  so.  lie  regularly  tendered  his  monthly 
assessments  until  he  died.  It  was  held,  on  these  facts,  that  he 
died  in  good  standing,  and  that  his  beneficiary  was  entitled  to 
the  benefit  fund.1 

When  under  the  laws  of  a  society  a  subordinate  lodge  may 
be  suspended  and  during  such  suspension  no  member  of  the 
lodge  is  entitled  to  benefits  unless  he  takes  out  a  special  certif- 
icate from  the  society  within  thirty  days  after  the  suspension, 
a  member  of  the  lodge  is  not  entitled,  in  the  absence  of  a 
special  provision  in  the  contract,  to  notice  of  its  suspension, 
but  he  must  take  notice  of  it.  It  is  not  unreasonable  to  pre- 
sume that  each  member  of  the  lodge  will  at  once  know  of  its 
suspension.'     Non-payment  of  an  assessment  during  sickness 

N.  W.  Rep.  663;  Hodsdon  v.  Ins.  Co.,  ers,  4  Ontario  535;  see  Peet  v.  Great 

97   Mass.    144;    Scheufler    v.    Grand  Camp,  83   Mich.   92;  47  N.  W.  Rep. 

Lodge,  45  Minn.  256;  47  N.  W.  Rep.  119. 

799.  2  Peet  v.  Great  Camp.,  83  Mich.  92; 

1  Oates  v.  Supreme  Court  of  Forest-  47  N.  W.  Rep.  119. 


532  ASSESSMENTS. 

will  not  forfeit  a  contract  of  insurance  where  the  laws  of  the 
society  provide  that  it  shall  not.1 

§  287.  When  an  affirmative  act  of  the  society  declaring 
the  forfeiture  is  necessary. — In  order  to  work  a  forfeiture 
of  the  rights  of  a  member,  the  society  must,  as  a  general 
rule,  take  definite  action  upon  the  default  of  the  mem- 
ber and  declare  the  contract  at  an  end.  By  the  express 
and  unequivocal  terms  of  the  contract  the  default  of  the 
member  may  of  itself  work  a  forfeiture,  but  a  construction 
which  will  summarily  cut  off  the  substantial  rights  of  a  mem- 
ber is  never  favored.  The  society  at  large,  or  the  proper  tri- 
bunal of  the  society  to  which  the  requisite  authority  has  been 
distinctly  given  by  the  terms- of  the  contract,  must  suspend  the 
member  or  declare  the  contract  forfeited.2  Where  the  laws  of 
a  society  require  the  payment  of  an  assessment  within  thirty 
days  after  the  date  of  the  notice  on  penalty  of  suspension, 
and  provide  that  the  time  for  considering  the  subject  of  the 
suspension  of  a  delinquent  member  shall  be  fixed  by  a  vote 
of  the  society,  an  order  of  an  officer,  suspending  a  member  for 
non-payment  of  an  assessment,  without  the  required  vote  is  in- 
operative.3 Where  it  is  provided  that  any  member  who  shall 
not  pay  within  a 'certain  time  "  shall  forfeit  his  claim  to  mem- 
bership and  have  his  name  stricken  from  the  roll,"  this  provision 
is  not  self-executing,  but  requires  affirmative  action  on  the 
part  of  the  society  declaring  the  forfeiture  in  order  to  ter- 
minate his  membership.4  The  society  must  ascertain  the  fact 
of  delinquency  and  impose  the  penalty,  and  until  that  is  done, 
his  membership  is  not  terminated. 

The  charter  of  a  society  provided :  "  Should  any  member 
neglect  to  pay  his  arrearages  for  three  months,  he  shall  be  ex- 
pelled." In  construing  this  provision,  the  court  said  :  "  There 
must  be  some  act  of  the  society  declaring  the  expulsion,  and 
this  can  not  be  done  without  a  vote  of  expulsion,  after  notice 
to  the  member  supposed  to  be  in  default.  For  it  may  be  that 
he  may  either  prove  that  he  is  not  in  arrears,  or  give  such 
reason  for  his  default  as  the  society  may  think  sufficient.     If 

1  Grand  Lodge  v.  Brand,  29  Neb.  Supreme  Lodge  v.  Kalinski,  57  Fed. 
644.  Rep.  348. 

2  See  §  67  et  seq.  *  N.   W.   Association    y.    Schauss, 

3  Knights  of     Honor  v.  Wickser,  148  111.  304;  35  N.  East.  Rep.  747. 
72  Texas  257;  12  S.  W.  Rep.  175;  see 


ASSESSMENTS.  533 

he  is  present  when  the  subject  is  taken  up,  and  willing  to  enter 
into  the  inquiry  immediately,  there  is  no  occasion  for  further 
notice.  But  no  man  should  be  expelled  in  his  absence  without 
notice.  It  appears  that  Hansell  was  present,  but  no  question 
was  made,  nor  any  vote  taken  on  his  expulsion.  He  had  an 
excuse  to  offer,  viz.,  that  the  society  was  indebted  to  him  for 
his  services  as  secretary  in  a  larger  sum  than  the  amount  of 
the  arrears  of  his  monthly  contribution.  And  had  he  urged 
this  defense  when  the  question  of  his  expulsion  was  put,  there 
is  no  saying  what  influence  it  might  have  had  on  the  vote.  Be 
that  as  it  may,  he  ought  to  have  had  the  opportunity.  The 
terms  of  the  charter  have  not  been  complied  with."  '  The 
constitution  of  an  incorporated  voluntary  society,  after  provid- 
ing that  every  member  shall  pay  into  the  treasury  a  designated 
annual  contribution  to  become  due  and  payable  on  January  1 
of  each  year,  declares  that  if  the  contribution  is  not  paid  by 
the  first  meeting  in  April,  thereafter,  the  defaulter  shall  forfeit 
his  membership,  and  his  name  shall  be  stricken  from  the  roll 
of  members,  "  and  of  this  he  shall  be  duly  notified  by  the  secre- 
tary;" and  imposes  upon  the  treasurer  the  duty  of  serving,  on 
or  about  March  1,  of  each  year,  upon  every  member  in  arrears, 
a  written  notice,  calling  his  attention  to  the  foregoing  require- 
ment. It  is  further  declared  that  "  the  first  regular  meeting 
in  April  of  each  year  shall  be  the  regular  meeting  for  the 
revision  of  the  roll  of  members,"  at  which  the  treasurer  is 
required  to  report  "  the  names  of  all  members  whose  dues  for 
the  year  have  not  been  paid,"  and  all  such  names  "  shall  be 
immediately  stricken  from  the  roll."  The  treasurer  is  declared 
to  be  "  personally  responsible  to  the  society  for  the  dues  of  all 
defaulting  members  not  so  reported." 

It  further  provides  that  the  treasurer  "  shall  report  to  the 
society,  at  the  annual  meeting  for  the  revision  of  the  roll,  a 
written  statement  of  the  names  of  members  who  are  in  ar- 
rears for  the  dues  of  the  year,  so  that  they  may  be  stricken 
from  the  roll;  but  this  written  statement  shall  not  be  spread 

'Commonwealth  V.Pennsylvania  Scheufler  v.  Grand  Lodge,  46  Minn. 

Beneficial  Institution.  2  Ser.  &  Raw.  ',>r>6;  47  N.  W.  Rep.  799;  Backdahlv. 

141;  see  also  Sibley  v.  Carteret  Club,  Grand    Lodge,    46  Minn.    61;  48   N. 

40  N.  J.  L.  296;  Gray  v.  Society,  137  W.  Rep.  464;    N.  W.  Association  v. 

Mass.    829;    McDonald    v.   Supreme  Schauss,  148111.  304;  35  N.  East.  Rep. 

Council,  78  Cal.  49;  20Pac.  Rep.  41;  747. 


534  ASSESSMENTS. 

upon  the  minutes."  Another  article  provided  in  detail  for  the 
order  of  business  at  what  is  designated  as  "  the  regular  meet- 
ing for  the  revision  of  the  roll,"  specifying  inter  alia,  "  the 
treasurer's  report  of  members  in  arrears  "  and  the  "  revision 
of  the  roll  by  the  secretary."  It  is  also  declared  that  "  any 
one  of  these  orders  of  business  may  be  suspended  at  any  time 
by  the  vote  of  a  majority  of  the  members  present  at  any 
meeting."  In  construing  these  several  provisions  in  pari  ma- 
teria, as  they  should  be  construed,  the  supreme  court  of  Ala- 
bama held  that  the  non-payment  of  annual  dues  by  a  member, 
by  the  first  meeting  in  April,  is  not,  ipso  facto,  a  forfeiture  of 
membership,  but  only  a  ground  of  forfeiture,  in  the  nature  of 
a  judgment  nisi,  to  be  made  final  by  the  vote  of  the  society; 
that  where  no  statement  or  report  had  been  made  by  the  treas- 
urer at  the  regular  meeting  in  April,  as  required  by  the  con- 
stitution, and  no  vote  of  the  society  had  been  taken  on  the 
subject,  the  mere  reading,  at  that  meeting,  of  the  name  of  a 
member  from  a  book  as  a  delinquent,  did  not  operate  to  forfeit 
his  membership;  that  the  action  of  a  society  at  a  subsequent 
meeting,  of  which  such  delinquent  had  no  notice,  actual  or 
constructive,  declaring  a  forfeiture  of  his  membership  for  non- 
payment of  dues,  was  irregular  and  not  binding  on  him,  and 
that  on  his  application,  mandamus  would  lie  to  vacate  it  and 
restore  him  to  membership.1  The  law  of  a  society  provided 
that  members  should  pay  their  assessments  within  thirty  days 
after  notice,  and  the  records  of  the  society  showed  a  suspen- 
sion before  the  expiration  of  that  time.  There  was  no  other 
evidence,  and  the  court  held  that  such  suspension  afforded  no 
proof  of  the  non-payment  of  an  assessment,  or  of  any  default  of 
the  member.  There  being  no  evidence  of  the  non-payment  of 
an  assessment,  the  member  could  not  be  held  to  be  in  default  by 
reason  of  having  made  no  application  for  reinstatement,  under 
rules  wholly  applicable  to  suspension  for  the  non-payment  of 
assessments.2 

§  288.     Forfeiture  of  membership  for  non-payment  of  an 
assessment  can  not  be  declared  nunc  pro  tunc  after  the  loss,  if 

1  Medical  Society  v.  Weatherly,  75  v.  Musical  Union,  47  Hun  273;  People 
Ala.  248.  v.  Protective  Union,  118  N.  Y.  101; 

-  Lazensky  v.  Supreme  Lodge  K.  23  N.  East.  Rep.  129. 
of  H.,  31  Fed.  Rep.  592;    see  People 


ASSESSMENTS.  585 

the  policy  was  in  force  when  the  loss  took  place,  and  a  mem- 
ber can  not  be  suspended  after  his  death  for  non-payment  of 
an  assessment  so  as  to  avoid  a  policy  in  force  at  the  time  of 
his  death.1  The  charter  of  a  society  provided  that,  if  a  mem- 
ber did  not  pay  his  assessment  within  thirty  days  after 
demand,  his  insurance  might  be  suspended  by  the  secretary  or 
board  of  directors,  but  if  suspended  by  the  secretary,  appeal 
might  be  made  to  the  board  of  directors  when  in  session,  and 
it  was  held  that  such  forfeiture  could  not  properly  be  imposed 
as  an  ex  parte  result  of  mere  default  in  payment,  and  without 
giving  the  assured  an  opportunity  for  hearing.2  S.  was  a  mem- 
ber of  a  subordinate  lodge  of  Independent  Foresters,  and  by  the 
terms  of  its  constitution  and  by-laws,  became  a  member  of  the 
grand  lodge.  The  death  assessments  were  required  to  be 
collected  by  the  subordinate  lodge,  and  forwarded  to  the 
grand  lodge,  the  subordinate  lodge  being  compelled  to  account 
for  these  assessments,  and  pay  them  to  the  grand  lodge,  unless 
the  member  had  been  expelled  or  suspended.  The  assessment 
of  S.  was  paid  by  the  subordinate  lodge  to  the. grand  lodge, 
but,  at  the  time  of  his  death,  had  not  been  paid  by  him  to  the 
subordinate  lodge.  The  by-laws  provided  that  "any  member 
failing  to  pay  his  assessment  within  thirty  days  shall  be  sus- 
pended,'' and  also  provided  that  notice  should  be  given  to  the 
grand  secretary  of  the  grand  lodge.  On  the  death  of  S.  his 
widow  brought  suit  for  the  amount  due  from  the  grand  lodge, 
and  the  court  held  that  the  mere  non-payment  of  assessment 
did  not  of  itself  operate  as  a  suspension,  nor  did  the  clerical 
act  of  the  secretary  in  marking  S.'s  account  suspended.  The 
suspension  must  be  by  some  affirmative  act  of  the  lodge. 
Such  suspension  maybe  waived  by  the  lodge,  either  expressly, 
or  by  failure  to  act.  The  grand  lodge  having  received  the 
assessment,  was  liable  to  the  widow/ 

In  an  action  against  a  society,  where  the  certificate  is  made 
payable  upon  condition  that  the  insured  is  in  good  standing 
in  the  society  at  his  death,  and  the  constitution  provides  that 

1  Olmstead  v.  Farmers'  Mutual,  50  Ins.  Co.  v.  McLennon,  6  Ins.  L.   J. 

Mich.  200;  Baker  v.  Citizens' Mutual,  124. 
51  Mich.  243.  Scheu  v.  Grand   Lodge,   17  Fed. 

'Olmstead    v.     Farmers'    Mutual,  Rep.  214;  Bee  Hall  v.  Supreme  Lodge 

etc.,  50  Mich.  200;  but  see  Equitable  K.  of  H.,  24  Fed  Rep.  450. 


53G  ASSESSMENTS. 

upon  clue  trial  and  conviction  of  unbecoming  conduct  a  mem- 
ber shall  be  reprimanded,  suspended  or  expelled,  the  loss  of 
good  standing  can  only  be  shown  by  proof  of  some  official 
action  by  the  society,  and  oral  evidence  thereof  is  not  admis- 
sible.1 

§  289.  When  an  affirmative  act  of  the  society  declaring 
a  forfeiture  is  not  necessary. — However  abhorrent  it  may  be 
to  all  reason  to  permit  the  expulsion  of  a  member  without 
notice  and  hearing,  or  opportunity  to  be  heard,  for  an  alleged 
violation  of  his  duty  as  a  citizen  or  a  corporator,  and  notwith- 
standing the  fact  that  a  by-law  providing  that  on  such  charges 
a  member  may  be  expelled  by  a  vote  of  the  society  in  his 
absence  and  without  notice  is  illegal  and  invalid,  it  may  be 
laid  down  as  certain  that,  from  the  very  nature  of  the  plan  of 
mutual  assessment  insurance,  it  is  proper  for  mutual  benefit 
societies  to  provide  that  non-payment  of  an  assessment  within 
a  specified  time  after  notice  shall,  ipso  facto,  work  a  forfeiture 
of  the  insurance  and  an  expulsion  of  the  defaulting  member. 
It  is  true  that  where  such  stringent  clauses  of  forfeiture  are 
made  a  part  of  the  contract,  they  are  usually  accompanied  by 
provisions  for  the  reinstatement  of  the  delinquent  member 
upon  equitable  terms,  but  such  provisions  are  not  necessary  to 
the  validity  of  the  terms  of  forfeiture.  These  societies  depend 
exclusively  upon  the  payment  of  assessments  to  meet  their 
losses  and  expenses,  and  only  by  the  prompt  payment  of 
assessments  by  their  members  can  they  maintain  their  solvency 
and  responsibility.  The  only  practical  way  which  they  have 
of  enforcing  payment  of  their  assessments  is  by  forfeiting 
insurance  contracts  and  expelling  the  delinquent  members  for 
non-payment,  and  this  power  is  necessary  for  the  existence  of 
such  societies.  To  hold  that  specific  notice  to  the  member 
must  be  given  of  the  time  and  place  at  which  he  will  be  cailed 
upon  to  answer  the  charge  of  having  failed  to  pay  his  assess- 
ment within  the  stipulated  time,  and  that  a  judicial  act  of  the 
society,  expelling  the  delinquent  member  is  necessary  in  order 
to  terminate  his  rights  under  the  contract,  and  to  hold  further 
that  such  proceedings  may  not  be  waived  by  express  contract 
of  the  parties,  would  be  to  extend  unduly  the  period  of  insur- 

JHigh  Court  v.  Zak,  136  111.  185;  26  N.  East.  Rep.  593;  distinguishing 
Royal  Templars  v.  Curd,  111  111.  284. 


ASSESSMENTS.  537 

ance  beyond  the  time  for  which  a  consideration  had  been  paid, 
would  offer  encouragement  to  careless  members,  and  greatly 
impair  the  ability  of  the  societies  to  carry  on  the  work  for 
which  they  are  organized. 

While  it  is  competent  for  a  member  of  a  voluntary  society 
to  bind  himself  by  an  agreement  that  his  membership  and 
insurance  shall  be  forfeited,  in  case  he  shali  not  pay  his  assess- 
ment within  a  stipulated  time,  and  that  such  forfeiture  si i all 
take  effect  at  the  expiration  of  that  time,  without  special  or 
personal  notice  to  him,  and  without  any  act  on  the  part  of 
the  society  declaring  the  forfeiture,  a  construction  leading  to 
such  a  result  will  not  be  adopted  by  the  courts  unless  the 
intention  to  waive  such  notice  and  judicial  act,  is  clearly 
expressed  in  the  most  unambiguous  and  explicit  language.  As 
observed  in  The  People  v.  The  Medical  Society  of  the  County 
of  Erie,1  "  the  general  policy  of  the  law  is  opposed  to  sharp 
and  summary  judgment,  where  the  party  whose  rights  are 
in  jeopardy  has  no  opportunit}7  to  be  heard  in  his  own  defense." 
Where  the  charter  of  a  society  provides  for  strict  forfeiture 
of  membership  and  the  benefits  arising  therefrom,  upon  the 
failure  of  a  member  to  pay  his  dues  or  assessment,  there  is< 
nothing  to  be  done  by  the  society  in  order  to  give  effect  to 
the  failure  to  pay  them.  While  the  conduct  of  the  society 
may  be  such  as  to  waive  the  forfeiture,  the  forfeiture  takes 
effect  unless  it  is  waived.  Under  a  law  of  a  mutual  benefit 
society,  which  makes  the  non-payment  of  assessments  for  a 
given  period  of  time  after  notice  operate  ;is  an  expulsion,  ipso 
facto,  of  the  delinquent  member  and  a  forfeiture  of  his  rights 
in  the  benefit  fund,  it  is  not  necessary  that  the  expulsion  and 
forfeiture  should  be  judicially  determined  by  any  judicatory  of 
the  society.  Where  the  by-laws  of  a  society  provide  that  each, 
member  snail,  within  thirty  days  after  notification,  pay  the 
secretary  the  amount  of  the  assessment,  and  that  if  any  mem- 
ber shall  neglect  to  pay  any  assessment  within  thai  time, 
"then  and  in  such  case  such  membership  shall  cease  and 
determine  at  once  without  notice,  and  all  claims  be  forfeited 
to  the  association."  the  neglect  to  pay  an  assessment  forthirty 
days  after  notice  thereof,  ipso  facto,  determines  the  member- 
ship of  the  delinquent.8 

1  32  N.  Y.  187.  238:    McDonald    v.    Ross-Lewin.    29 

8  Pendleton  v.  Ins.  Co.,  5  Fed.  Rep.    Hun  (N.  Y.)  87;  Backdahl  v.  Grand 


538  ASSESSMENTS. 

Where  the  charter  of  a  society  provides  that  on  non-pay- 
ment of  an  assessment  the  officers  may  forfeit  the  contract  of 
insurance,  the  society  may  provide  that  such  non-payment 
within  a  certain  time  shall  work  a  forfeiture;  and  in  case  such 
a  provision  is  inserted  in  the  contract,  no  action  of  the  officers 
will  be  necessary  to  terminate  the  rights  of  the  member.1  A 
provision  in  a  certificate  of  membership  that,  upon  failure  to 
pay  an  assessment  within  thirty  days  from  the  date  of  the 
notice,  it  shall  be  void,  can  not,  in  the  absence  of  qualifying 
expressions,  be  construed  to  render  it  voidable,  at  the  option  of 
the  society.  In  such  a  case  there  is  nothing  to  construe,  and 
the  parties  will  be  taken  to  have  meant  what  they  said. 
There  must  be  some  other  language  in  the  certificate,  or 
articles  of  incorporation,  or  by-laws  of  the  society,  which 
bears  materially  upon  the  subject,  or  which  qualifies  or  re- 
strains the  meaning  of  the  word  "  void  "  as  used  in  the  certifi- 
cate, in  order  that  it  shall  be  construed  to  mean  "  voidable  " 
merely,  at  the  election  of  the  society.2  Where  a  certificate 
stipulates  that  if  assessments  shall  not  be  paid  at  certain  times, 
and  within  the  lifetime  of  the  member,  the  contract  shall 
cease  and  determine,  the  death  of  the  member  while  in  default 
of  payment  terminates  the  contract,  and  no  formal  forfeiture 
is  required.3  Where  it  is  provided  in  the  contract  that  "  any 
member  failing  to  pay  such  assessment  within  thirty  days 
from  date  of  notice  shall  stand  suspended,  and  shall  not  there- 
after be  entitled  to  the  benefits  of  the  mutual  aid  fund  until 
he  has  been  reinstated  according  to  the  laws  of  the  order,"  no 
act  on  the  part  of  the  society  declaring  the  suspension  is  nec- 
essary.4 

§  290.  A  contract  provided  that  any  member  who  should 
violate  his  pledge  of  total  abstinence  from  intoxicating  liquors 
should  be  by  the  very  act  suspended  from  membership  in  the 

Lodge,  46  Minn.  61;  48  N.  W.  Rep.       3Lantz  v.  Ins.  Co.,  139  Pa.  St.  546; 
454;   Scheufler  v.   Grand  Lodge,  45   21  Atl.  Rep.  80. 

Minn.  256;  47  N.  W.  Rep.   799;  Yoe       4  Illinois  Order  v.  Besterfield,  37  111. 
v.  Association,  63  Md.  86.  App.  522;  Hansen  v.  Supreme  Lodge, 

1  Equitable  Ins.  Co.  v.  McLennon,  40  111.  App.  216;  Supreme  Lodge  v. 
6  Ins.  L.  J.  124;  but  see  Olmstead  v.  Keener  (Texas),  25  S.  W.  Rep.  1084; 
Farmers'  Mutual,  50  Mich.  200,  which  distinguishing  Supreme  Lodge  v. 
is  distinguishable  from  this  case.  Wickser,  72  Texas  257;  12  S.  W.  Rep. 

2  Bosworth  v.  Western  Mutual,  75    175. 
Iowa  582;  39  N.  W.  Rep.  903. 


ASSESSMENTS.  539 

society,  and  it  was  held  that  the  drinking  of  whisky  by  a 
member  was  a  self-executing  suspension  of  membership,  which 
took  away  his  good  standing  and  precluded  a  recovery  on  his 
certificate  of  insurance  after  his  death.1 

The  beneficiary  of  a  member  who,  at  the  time  of  his  death, 
stood  suspended  for  non-payment  of  assessments  by  operation 
of  the  laws  of  the  society,  can  not  recover  on  the  benefit  cer- 
tificate on  the  ground  that  a  subordinate  lodge  of  the  society, 
of  which  he  was  a  member,  had  continued  to  treat  him  as  a 
member,  and  to  treat  his  unpaid  dues  to  the  supreme  lodge  as 
dues  payable  to  the  subordinate  lodge  for  which  it  had  extended 
him  credit.2  Where  the  by-laws  of  a  society  provide  that,  in 
case  of  failure  or  neglect  of  a  member  to  pay  an  assessment 
within  a  stipulated  time,  "  his  name  shall  be  erased  from  the 
roll  of  members,  and  he  shall  forfeit  all  claims  upon  the  asso- 
ciation," and  a  member  does  not  pay  within  the  time  limited, 
he  at  once  ceases  to  be  a  member  and  forfeits  all  claim  upon  the 
society  by  operation  of  the  by-law."  "Where  the  laws  of  a 
society  provide  that,  if  a  member  neglects  or  refuses  to  pay 
an  assessment  within  a  specified  time,  he  shall  cease  to  be  a 
member,  and  the  secretary  shall  strike  his  name  from  the  roll, 
such  laws  are  self-executing,  and  the  member  so  omitting  to 
pay  loses  his  right  as  a  member,  although  the  secretary  does 
not  strike  his  name  from  the  roll.4  The  provision  in  the  char- 
ter of  a  mutual  benefit  society,  that,  "any  member  failing  to 
pay  his  annual  due  or  assessment  within  thirty  days  after 
notice  has  been  served  on  him,  or  sent  to  him,  shall  forfeit  Ins 
membership  and  all  benefits  arising  therefrom"  is  not  self- 
executing  in  the  sense  that  the  failure  to  pay  is  equivalent  toa 
formal  withdrawal  <>r  resignation  at  the  expiration  of  the 
thirty  (lavs  next  after  notice  t<>  pay  an  assessment  and  a  sev- 

1  Royal  Templars  v.  Curd,  111  III.  for  local  expenses;  and  tin-  dues  \>< 

284;    Smith    v.  Knights   of    Father  the  supreme  lodge  were  nol  paid  by 

Mathew,  86  Mo.  App.  184;  Bogins  v.  the  subordinate  lodge  for  the  de< 

Supreme  Council,  76  CaL  109;  18  Par.  member. 

Rep.  126.  3Yoe  v.  Association.  63  Md.  Ml. 

"Borgraefe  v.  Supreme  Lodge,  22  'Rood  v.  Association,  81  Fed.  Rep, 

Mb.  A|)|>.  137.     Id  this  case  the  dues  62;  Gmnther  v.   Association,  40  La. 

payable  to  the  supreme  lodge,  the  Ann.  777:  •">  s<>.  Rep.  »'m:   Maginnis' 

mutual  benefit  society,  were  for  in-  Estate  v.   Association,  \'-)  La.  Ann. 

surance  purposes,  while  those  pay-  113(3;  10  So.  Rep.  180. 
ably  to  the  subordinate  lodge  were 


540  ASSESSMENTS. 

erance  of  all  relations  between  the  member  and  the  society, 
•which  precludes  a  waiver  of  the  forfeiture.  In  such  a  case, 
the  society  may  waive  the  forfeiture.1 

Where  a  certificate  of  membership  in  a  society  requires  the 
member  to  pay  all  assessments  against  him  within  ten  days 
after  notice  thereof,  or  the  certificate  shall  be  null  and  void, 
and  the  by-laws  of  the  society  provide  that  a  member  failing  to 
pay  his  assessments  within  ten  days  after  notice  shall  forfeit 
his  membership  and  all  benefits  therefrom,  and  a  member 
in  his  application  for  membership  agreed  to  be  bound  by 
the  rules  and  regulations  of  the  society,  a  failure  or  a  neg- 
lect to  pay  an  assessment  within  ten  days  after  notice 
of  the  same  will  prevent  any  recovery  upon  the  certificate 
after  his  death.2  AVhere  a  certificate  of  membership  pro- 
vides that  the  benefit  fund  shall  be  paid  to  the  benefi- 
ciary, in  case  of  the  member's  death,  on  condition  "  that  he 
has  complied  with  the  by-laws  of  the  society,"  and  the  by-laws 
provide  that  members  shall  forfeit  their  membership  if  they 
fail  to  pay  their  assessments  within  thirty  days  after  publica- 
tion of  notice,  and  where  it  appears  from  the  evidence  that 
the  assured  had  failed  to  pay  an  assessment  within  the  time 
specified,  and  that  it  remained  unpaid  at  the  time  of  his  death, 
the  assured  has  forfeited  his  membership,  and  the  benefiiciary 
can  not  recover  under  his  certificate."  In  a  certificate  the 
member  agreed  "  to  make  a  deposit  of  twelve  dollars  (two 
assessments),  and  renew  the  same  when  said  deposit  has  been 
consumed  within  thirty  days  from  date  of  written  notice,  de- 
posited in  the  postoffice,  in  the  city  of  New  Orleans,  state  of 
Louisiana,. addressed  in  conformity  with  his  written  address, 
filed  with  the  secretary  of  the  association."  After  the  death 
of  the  member,  an  action  was  brought  on  the  contract  of  in- 
surance, and  the  testimony  of  the  secretary  and  treasurer 
clearly  established  the  fact  that  notices  were  sent  through 
the  postoffice,  according  to  the  terms  of  the  agreement,  inform- 
ing the  deceased  member  of  the  consumption  of  his  deposit, 
and  calling  on  him  to  renew  the  same,  and  that  the  member 

1  American  Mutual  v.  Quire  (Ky.),       3  Madeira  v.  Society,  16  Fed.  Rep. 
8  Ky.  L.  Rep.101:  Johnson  v.  South-   749. 

ern  Mutual,  79  Ky.  404. 

2  Benevolent  Society  v.  Baldwin,  86 
111.  479. 


ASSESSMENTS.  541 

failed  to  renew  the  deposit,  within  thirty  days  from  date  of 
Avritten  notice.  Upon  these  facts  the  court  held  that  the  fail- 
ure to  renew  the  deposit  in  accordance  with  the  contract  for- 
feited the  "good  standing"  of  the  member  in  the  society,  and 
constituted  a  sufficient  defense  to  the  action.1 

In  McMurray  v.  Supreme  Lodge,2  it  was  held  that  "good 
standing,"  within  the  meaning  of  the  laws  of  the  Knights  of 
Honor,  implies  a  f  ull  and  fair  compliance  with  those  laws,  in 
the  payment  of  assessments  and  dues;  that  a  member  who  is 
largely  in  arrears  for  assessments  and  dues,  is  not  "  in  good 
standing,"  within  the  meaning  of  his  benefit  certificate,  and 
if  he  die,  when  so  in  arrears,  his  beneficiary  is  not  entitled  to  the 
I  >ayment  of  the  benefit.  Decision  No.  20,  made  by  the  supreme 
dictator  of  the  Knights  of  Honor  in  1879,  held  that,  if  a  member 
fails  to  pay  an  assessment,  within  thirty  days  allowed  by  the 
constitution,  and  dies  between  the  expiration  of  the  thirty  days 
and  the  next  meeting  of  the  lodge,  his  family  or  heirs  would  be 
entitled  to  the  death  benefit;  that  a  member  must  be  suspended 
in  order  to  forfeit  his  death  benefit,  and  can  not  be  suspended 
after  his  death.  In  McMurray  v.  Supreme  Lodge,  supra,  the 
court  held  that  this  decision  did  not  apply  where  the  death  of 
the  delinquent  member  took  place  after  the  next  meeting  of 
his  lodge;  that  the  assured,  having  been  in  arrears  for  eight 
assessments  at  the  time  of  his  death,  was  not  in  good  stand- 
ing, and  that  his  beneficiary  could  not  recover.  This  decision 
seems  to  be  contrary  to  the  principles  governing  the  forfeiture 
of  rights  of  membership.  According  to  the  decided  weight 
of  authority,  some  act  of  the  society,  judicially  declaring  the 
forfeiture,  was  necessary  under  the  contract.  The  contract 
provides,  as  such  contracts  usually  do,  that  certain  benefits 
will  be  paid  to  the  beneficiary  of  the  member,  "  providing  he 
is  in  good  standing  when  he  dies."  The  laws  of  the  order 
contain  the  following  provisions  upon  the  payment  of  dues, 
assessments,  etc.:  "Any  member  who  may  become  in  arrears 
for  dues  or  fines  to  this  lodge  shall  not  be  entitled  to  vote, 
hold  office,  nor  shall  he  be  entitled  to  benefits;  and  when  six 
months  in  arrears  for  dues  or  fines,  or  when  he  fails  to  com  pi  v 
with  section  3  of  law  XV,  he  shall  be  suspended  from  the 

■Ziegler  v.   Ins.   Co.,    1    McGloin       s  20  Fed.  Rep.  107. 

(La.)  284. 


542  ASSESSMENTS. 

lodge."  Law  XV,  Sec.  3 :  "  Each  member  shall  pay  the 
amount  due,  on  the  notice  of  the  reporter  of  his  lodge,  within 
thirty  days  from  the  date  of  such  notice,  and  any  member 
failing  to  pay  such  assessment  within  thirty  days,  shall  be  sus- 
pended from  his  lodge.'"  Under  the  authorities  cited  in  the 
preceding  paragraphs,  notice  to  the  member,  and  a  declaration 
of  forfeiture  for  the  non-payment  of  assessments  were  neces- 
sary to  terminate  the  "  good  standing  "  of  a  delinquent  mem- 
ber. 

§  291.  Restoration  after  suspension  or  forfeiture  for 
non-payment.1 — When  a  society  is  composed  of  one  grand  or 
central  body,  and  many  subordinate  and  local  councils  or 
lodges,  these  local  organizations  must,  for  most  purposes,  be 
regarded  as  the  representatives  and  agents  of  the  society,  not 
of  the  members  insured  by  it.  And  although  a  local  council 
is  bound  to  conform  all  of  its  proceedings  to  the  requirements 
of  the  constitution  and  by-laws  of  the  society,  yet  the  insured 
member  is  not  to  be  held  responsible  for  such  irregularities  of 
procedure,  as  the  local  council  may  commit  in  adjudicating  or 
determining  upon  his  rights  under  the  contract  of  insurance. 
When  a  local  council  is  authorized  by  the  constitution  and  by- 
laws of  a  society  to  receive  and  pass  upon  applications  for 
restoration  or  re-admission  to  membership  in  the  society,  and 
when,  acting  upon  such  authority,  such  council  does  consider 
and  adjudicate  upon  an  application  for  restoration  or  re-ad- 
mission, restores  or  re-admits  the  applicant,  and  afterward 
supplements  this  action  by  renewing  its  calls  upon  the  restored 
or  re-admitted  member  for  assessments  and  by  accepting  such 
assessments,  these  acts  of  the  society  constitute  an  estoppel, 
prohibiting  the  society  from  denying  the  legality  of  the  mem- 
ber's restoration  or  re-admission  and  subjection  to  new  assess- 
ments. It  can  not  with  plausibility  or  any  degree  of  liberality 
be  contended  that  the  local  council  of  the  society  is  bound,  at 
the  peril  of  a  member  who  has  been  suspended,  or  who  has 
forfeited  his  membership,  to  conduct  its  proceedings  for  his 
restoration  or  re-admission  strictly  in  accordance  with  the  man- 
ner prescribed  in  the  constitution  and  by-laws  of  the  society; 
that  if  it  fail  strictly  to  observe  the  routine  thus  prescribed, 
the  suspended  or  dropped  member  is  responsible  for  the  irreg- 

1  See  §  162a. 


ASSESSMENTS.  543 

ularity;  and  that,  if  the  local  council  varies  at  all,  in  its  pro- 
ceedings for  restoration  or  re-admission,  from  the  details  of 
procedure  set  forth  in  the  constitution  and  by-laws,  then, 
the  restoration  or  re-admission  shall  be  null  and  void.1 

By  the  rules  of  a  society,  if  a  member  fail  to  pay  his  assess- 
ment on  or  before  the  tenth  day  of  the  following  month  after 
notice,  he  shall  stand  suspended  from  all  rights  and  privileges 
in  the  society  from  that  time.  He  may,  however,  within  three 
months,  make  application  in  writing  signed  by  him  for  resto- 
ration, to  be  presented  at  a  meeting  of  his  lodge,  accompanied 
by  a  sum  equal  to  all  his  dues  and  assessments,  and  be  restored 
by  a  majority  vote  of  the  members  of  his  lodge  present  at  such 
meeting.  A  member  was  in  default  for  not  paying  two  as- 
sessments on  or  before  August  10, 1885,  and  he  was  suspended 
by  his  lodge  on  August  15,  and  so  reported  to  the  grand  lodge  of 
the  society.  On  September  5,  his  lodge  passed  a  resolution  that 
he  be  restored  on  payment  of  the  dues  and  assessments  charged 
against  him.  On  September  20,  he  caused  the  full  amount 
of  his  dues  and  assessments  up  to  that  date  to  be  paid  to  his 
lodge,  and  died  on  the  following  day.  The  societ}r  refused  to 
pay  the  fund  to  his  beneficiary,  because  he  had  not  presented 
to  his  lodge  an  application  in  writing  signed  by  him,  etc.  In 
passing  upon  this  question,  the  supreme  court  of  New  York 
said :  "  This  (the  formality  prescribed)  has  relation  only  to  the 
manner  of  bringing  his  case  before  the  meeting  of  the  lodge. 
Its  purpose  evidently  is  to  require  action  to  be  taken.  "With- 
out such  application  the  duty  would  not  be  imposed  upon  it  to 
act  in  the  matter.  But  the  lodge,  having  the  power  to  restore 
him  to  his  relation  of  member,  might,  it  would  seem,  doit  with- 
out the  formality  of  a  written  application,  as  it  would  contain 
nothing  essentially  relating  to  the  inquiry  whether  or  not  he 
should  be  reinstated.  It  may  be  that  the  subordinate  lodge 
may  not  waive  the  observance  of  any  regulation  of  the  grand 
lodge,  which  in  its  nature  or  effect  is  substantial.  But  those 
things  which  are  merely  formal  and  incidental  to  the  exercise 
of  the  power  vested  in  the  subordinate  lodge  may  not  require 
strict  observance  to  render  its  action  effectual.     To  that  extent 

1  Hoffman  v.  Supreme  Council.  35  nelly  v.  Association.  58  Conn.  550 :  20 
Fed.  Rep.  252;  2  Herman  on  Estop-  Atl.  Rep.  671;  L'ha^e  v.  Cheney,  58 
pel,  Sec.  1214  and  cases  cited;  Con-   111.  509. 


5J4  ASSESSMENTS. 

waiver  is  incident  to  the  exercise  of  power  possessed  in  sup- 
port of  action  taken."  The  court  held  that,  upon  complying 
with  the  requirements  of  the  resolution  of  the  lodge,  the  mem- 
ber became  again  entitled  to  the  enjoyment  of  all  his  rights, 
as  such,  and  that,  upon  his  death,  his  beneficiary  was  entitled 
to  the  fund.1 

But  the  society  may  refuse  to  recognize  or  pass  upon  an 
application  for  reinstatement  to  membership  where  the  appli- 
cant has  not  complied  with  the  reasonable  by-laws  governing 
the  reinstatement  of  suspended  members.  The  widow  of  a 
deceased  member  sued  a  mutual  benefit  society  for  the  benefit 
fund.  It  was  proved  in  defense  that  the  member  had  been 
regularly  suspended  for  non-payment  of  assessments;  that  the 
by-laws  of  the  society  required  that  a  member  so  suspended 
should  be  reinstated  within  six  months,  provided  he  appeared 
in  person,  or  applied  in  writing,  and  paid  up  all  dues  to  date  of 
re-admission;  that  within  said  time  deceased  had  sent  the 
money  to  pay  up  his  dues,  but  that  it  had  not  been  accepted 
by  defendant,  and  that  deceased  had  never  appeared  in  person, 
or  applied  in  writing  for  his  reinstatement  as  a  member.  It 
was  held  that  the  defense  Avas  sufficient.  The  society  was 
not  obliged  to  accept  the  money  sent  by  the  member  as  long 
as  he  did  not  appear  in  person,  or  apply  in  writing.  He  was 
required  to  do  one  or  the  other  in  addition  to  the  payment  of 
his  dues  to  terminate  his  suspension  and  secure  his  re-admis- 
sion. The  court  had  no  power  to  relieve  the  member  from  the 
observance  of  this  condition,  and  his  suspension,  therefore, 
continued  to  the  period  of  his  decease,  and  necessarily  forfeited 
all  his  rights  and  privileges  as  a  member  of  the  society,  except 
that  of  being  reinstated  upon  complying  with  the  by-laws. 
The  membership  of  the  deceased  was  subject  to  the  operation 
and  effect  of  the  by-laws  of  the  society,  and  as  they  were  rea- 
sonable, it  was  the  duty  of  the  court  to  protect  the  corporation 
in  enforcing  them." 

§  292.  Where  the  suspended  member  applied  for  reinstate- 
ment and  his  medical  certificate  stated  that  he  was  of  the 

1  Gaige  v.  Grand  Lodge,  15  N.  Y.  Supreme  Assembly,  153  Mass.  83;  26 
St.  Reporter,  455;  48  Hun  137.  N.  East.  Rep.  236;  Supreme  Council 

2  Lehman  v.  I.  O.  B'nai  Brith,  23  v.  Connema,  3  Oh.  Cir.  Ct.  130; 
N.  Y.  Weekly  Dig.  409;  see  Wells  v.  Grand  Lodge  v.  Jesse,  50  111.  App. 
Society,    17  Ontario    317;    Lyon  v.  101. 


ASSESSMENTS.  515 

same  age  as  shown  by  a  certificate  given  more  than  a  year 
prior,  and,  on  objection  to  the  certificate,  the  societ}7  and  the 
applicant  agreed  that  no  further  action  should  be  taken  until 
inquiry  could  be  made  as  to  his  age,  and  he  died  before  the 
ballot  was  taken  in  the  society  as  provided  in  the  by-laws,  he 
was  not  at  the  time  of  his  death  restored  to  membership  or  in 
good  standing.1 

Where  a  member  had  been  suspended  for  non-payment  of 
an  assessment,  and  he  had  neglected  during  his  lifetime  to 
secure  his  reinstatement  in  accordance  with  the  terms  of  his 
certificate  by  paying  arrearages  while  in  good  health  and 
within  a  certain  time,  his  restoration  to  membership  can  not 
be  effected  after  his  death  by  payment  by  another  person 
within  the  time  limited  of  the  sum  due  from  him  at  the  time 
of  his  death.2  The  constitution  of  a  society  provided  for  the 
reinstatement  of  a  member  who  had  been  suspended  for  non- 
payment of  an  assessment,  on  his  making  a  written  applica- 
tion, and  on  his  paying  arrears  of  dues  and  assessments,  if  a 
majority  of  the  ballots  cast  on  the  vote  to  be  taken  by  the 
members  of  his  lodge  on  the  question  were  in  favor  of  his  re- 
instatement. After  default  and  suspension  the  insured  paid 
his  assessment,  but  the  collector  received  it  under  protest. 
The  formal  paper  requesting  reinstatement  was  demanded  of 
him,  and  no  vote  was  taken  by  his  lodge.  The  supreme  secre- 
tary wrote  him  that  his  lodge  could  not  reinstate  him  without 
a  medical  examination,  and,  on  this  letter,  his  name  was 
dropped  from  the  roll  of  members.  It  was  held  that  the 
ruling  of  the  supreme  secretary  was  not  in  accordance  with 
the  laws  of  the  society,  and  that  the  suspended  member  had 
been  deprived  of  a  right  to  a  ballot  and  to  reinstatement,  with- 
out good  cause.3  This  condition  in  respect  to  good  health  was 
not  in  the  rule,  and  the  officers  had  no  right  to  add  it  to  the  rule.4 

1  Supreme    Council    v.    Connema,  733;  see  Harvey  v.  Grand  Lodge,  50 

sujva;  see  Taylor  v.  Grand  Lodge,  Mo.  App.  472. 

29  N.  Y.  Supp.  773.  3  Ingrain   v.    Supreme  Council,  14 

*  Modern   Woodmen    v.    Jameson  N.  Y.  St.  Reporter  600. 

(Kansas),  29  Pac.  Rep.  473.     On  a  re-  4  Dennis  v.  Benefit  Association.  120 

hearing  of  this  case  the  court  held  N.  Y.  496;  14  N.  Y.  St.  Reporter  605; 

that  the  member  had  not  in  fact  been  see  also  Van  Houten  v.  Pine,  38  N.  J. 

suspended.     See  48  Kan.  718;  30  Pac.  Eq.  72. 
Rep.  460;  49  Kans.  677;  31  Pac.  Rep. 
35 


546  ASSESSMENTS. 

The  society  is  not  the  ultimate  judge  of  the  sufficiency  of  a 
certificate  of  health,  and  where  such  a  certificate  is  presented 
and  rejected  as  insufficient  by  the  officers  of  the  society,  the 
courts  will,  nevertheless,  examine  it  and  pass  upon  its  suffi- 
ciency. The  right  to  reinstatement  upon  a  certificate  depends 
upon  its  sufficiency  in  fact.1  Unless  it  is  otherwise  stipulated 
in  the  contract,  the  right  of  a  member  to  reinstatement  is  to 
be  determined  on  the  facts  as  they  existed  when  the  applica- 
tion was  made  or  sent  to  the  society,  irrespective  of  subsequent 
events.  Thus  certain  by-laws  provided  that  within  six  months 
after  a  forfeiture,  the  defaulting  member  might  be  reinstated 
by  paying  all  arrearages,  and  furnishing  a  satisfactory  certif- 
icate of  health.  After  the  assessment  for  which  a  forfeiture 
was  claimed,  several  notices  of  subsequent  assessments  were 
sent  to  the  assured,  each  accompanied  by  a  reinstatement  con- 
tract for  her  to  sign.  She  received  the  last  of  these  notices 
on  January  27th,  and  on  February  12th  she  signed  the  appli- 
cation for  reinstatement,  inclosed  it,  together  with  money 
for  all  arrearages,  and  a  certificate  showing  her  health  to  be  as 
good  as  when  she  first  entered  the  association,  and  carried  the 
package  to  the  postoffice.  "While  doing  so  she  caught  a  cold, 
and  died  the  next  day.  The  company  received  the  package 
the  day  after  her  death,  and  after  knowledge  thereof,  returned 
it  to  her  address.  It  was  held  that  her  death  was  not  a  good 
cause  for  rejecting  her  application  for  reinstatement,  since  her 
right  to  reinstatement  accrued,  if  at  all,  when  the  application 
was  mailed  to  the  societ}\2 

§  293.  "When  a  member  has  done  all  that  he  is  required  to 
do,  under  the  contract  of  insurance,  to  entitle  him  to  restora- 
tion to  membership  or  to  a  vote  upon  the  question  of  his  res- 
toration he  may  not  arbitrarily  be  refused  re-admission.  The 
courts  will  protect  his  rights  during  his  life,  and  those  of  his 
beneficiary  after  his  death.  The  by-laws  of  a  society  provided 
that  a  member  who  should  fail  to  pay  an  assessment  should  be 
suspended,  but  that  a  payment  within  three  months  should 
reinstate  him.     Another  article   of  the  by-laws  provided  for 

1  Miesell  v.  Ins.    Co.,  76  N.  Y.  115;  2  Jackson  v.  Association,  78  Wis. 

Jackson  v.  Association,   78  Wis.  463;  463;  47  N.  W.  Eep.  733;  see  Marckv. 

47  N.  W.    Rep.  733;  Van  Houten  v.  Supreme  Lodge,  29  Fed.  Rep.  896. 
Pine,  supra. 


ASSESSMENTS.  54:7 

the  action  of  the  society  in  cases  where  members  delinquent 
for  more  than  three  months  should  desire  to  pay  arrearages 
and  obtain  restoration  of  their  rights.  A  member  delinquent 
for  less  than  three  months,  paid  an  assessment  while  on  his 
death  bed.  and  it  was  held  that  his  rights  were  thus  restored 
without  action  on  the  part  of  the  society.1  If  the  laws  gov- 
erning a  society  do  not  impose  other  conditions  of  reinstate- 
ment than  the  payment  of  the  money  due,  that  is  to  say.  if 
they  do  not  require  a  certificate  of  good  health,  or  a  re-elec- 
tion, an  acceptance  by  the  society  of  the  money  due  will  oper- 
ate as  a  reinstatement  of  the  delinquent  member.2  The  by- 
laws of  a  society  provided  that  a  member  failing  to  pay  an 
assessment  within  thirty  days  should  be  suspended  by  his  coun- 
cil at  its  next  meeting;  that  any  member  so  delinquent  should 
forfeit  all  rights  to  benefits  under  the  relief  fund  laws,  should 
be  reported  suspended  by  the  secretary  to  the  supreme  treas- 
urer, and  should  stand  so  suspended  until  payment  of  arrear- 
ages and  compliance  with  the  other  laws  governing  reinstate- 
ments. It  was  held  that  compliance  with  "  the  other  laws 
governing  reinstatements/'  which  required  a  certificate  of 
good  health  and  a  re-election  was  not  necessary  where  no  sus- 
pension had  been  declared  by  the  council.3  Where  the  by- 
laws provide  for  reinstatement  of  a  delinquent  member,  if 
he  is  in  good  health,  the  society  may  not  refuse  to  reinstate 
him  while  in  good  health  because  he  has  passed  the  age  at 
which  it  would  insure  him,  and  such  a  refusal  is  a  breach  of  the 
contract,  for  which  he  may  recover/ 

A  certificate  provided  that  any  member  who  had  forfeited 
his  contract  of  insurance  might  be  again  restored,  at  any  time 
within  six  months,  by  furnishing  proofs  of  good  health  and 
paying  the  lull  amount  of  arrears.  In  an  action  on  the  certifi- 
cate, the  defense  of  the  society  was.  as  to  all  but  $168.78,  that, 
at  the  time  of  the  reinstatement  of  the  member,  the  beneficiary 

1  Manson  v.  Grand  Lodge,  80  Minn.  'McDonald  v.   Supremo  Council, 

509:    McDonald  v.  Supreme  Council  supra. 

78  Cal.  49;  20  Pac.    Rep.    41;  Millard  4  Lovick  v.  Association.  110   N.  C. 

v.  Supreme  Council,   81   Cal.  340;  22  93;  14  S.  E.  Rep.  506.     In   this  case 

Pac  Rep.  864.  the  court  gave  judgment  for  the  ag- 

*  McDonald    v.   Supreme    Council  gregate  Bum  of  the  assessments  paid 

Order  of  Chosen  Friends,  78  Cal.  49;  with  interest. 
20  Pac.  Rep.  41. 


548  ASSESSMENTS. 

had  stipulated  that,  if  his  death  should  take  place  within  sixty 
days  from  that  date,  she  should  be  entitled  only  to  the  money 
actually  paid  by  him  on  assessments;  that  as  he  had  died 
within  sixty  days  after  the  date  of  his  reinstatement,  she  was 
only  entitled  to  the  amount  of  such  paid  assessments,  to  wit, 
$168.78.  The  court  said:  "This  was  a  mere  nudum  pactum. 
To  etfect  a  reinstatement,  no  consent  on  the  part  of  the  society 
was  necessary.  Only  two  things  were  required,  viz.,  furnish- 
ing a  certificate  of  the  good  health  of  the  assured,  and  the 
payment  of  arrears.  These  were  done,  and  thereupon  the  as- 
sociation was  bound  under  its  contract  to  reinstate  him,  and 
had  no  right  to  impose  any  other  condition.  Neither  the 
promise  to  do  a  thing,  nor  the  actual  doing  of  it,  will  be  a  good 
consideration,  if  it  is  a  thing  which  the  party  is  bound  to  do 
by  a  subsisting  contract  with  the  other  party,  at  least  unless 
done  as  a  compromise  of  a  bona  fide  dispute  with  reference  to 
the  obligations  or  rights  of  the  parties  under  the  contract, 
of  which  there  is  no  claim  in  this  case." 1 

A  notification  to  a  member  that  his  contract  had  lapsed,  but 
that  the  society  would  reinstate  him  if  he  would  remit  his  check 
for  a  specified  amount,  does  not  make  the  reinstatement  de- 
pend on  the  receipt  and  payment  of  the  check,  but  such  rein- 
statement becomes  complete  by  the  mailing  of  the  letter  con- 
taining the  check  on  the  day  the  notification  was  received; 
hence,  the  member  may  recover  benefits  for  accidental  injuries 
sustained  by  him  while  the  letter  was  in  transit,  and  before  it 
reached  the  society.2 

§  294.  Reinstatement  to  membership  in  a  mutual  benefit 
society,  effected  by  concealment  of  the  fact  that  the  suspended 
member  was  dying,  is  fraudulent  and  void.3  The  contract  of 
insurance  is  essentially  one  of  good  faith,  and  a  reinstatement 
obtained  by  false  and  fraudulent  representations  does  not  bind 
the  society.  The  fact  that,  after  the  reinstatement  of  a  member 
on  his  false  representations,  his  subordinate  lodge  allowed  him 
sick  benefits  under  its  by-laws  and  paid  his  assessments  for 
him,  does  not  preclude  the  society  from  setting  up  the  defense 

1  Davidson  v.  Society,  39  Minn.  303;  3  Marshall  v.  Accident  Co.,  11  N.  Y. 
39  N.  W.  Rep.  803.  Supp.  700. 

2  Calvin  v.  Association,  21  N.  Y. 
Supp.  734;  see  Tayloe  v.  Ins.  Co.,  9 
How.  390. 


ASSESSMENTS.  5-iO 

of  fraud  in  obtaining  reinstatement,  when  it  had  no  knowledge 
of  the  fraud.' 

By  reinstating  a  suspended  member  with  full  knowledge  of 
the  untruthfulness  of  his  answers  in  his  application  for  mem- 
bership, a  mutual  benefit  society  waives  the  benefit  of  a  con- 
dition of  forfeiture  in  the  policy."  Restoration  to  membership 
is  not  the  making  of  a  new  contract,  but  is  simply  the  cancel- 
lation of  the  forfeiture  whereby  the  person  is  restored  to  mem- 
bership under  the  original  contract  and  with  his  original  rights.3 

One  who  is  no  longer  recognized  by  the  society  as  a  contin- 
uing member  does  not,  by  merely  applying  for  reinstatement, 
waive  such  rights  as  he  may  in  fact  have  as  a  member.  lie 
may  in  any  controversy  with  it  attempt  to  avoid  litigation, 
and  his  application  will  be  considered  as  an  attempt  to  have 
his  rights  recognized  by  the  society.  The  question  is  whether 
his  rights  have  been  forfeited.  This  will  depend  upon  the 
facts  of  the  case  and  the  contract  of  the  parties,  not  upon  the 
act  of  one  of  the  parties  in  attempting  to  adjust  the  contro- 
versy.4 But  where  the  petition  for  reinstatement  recites  that 
he  has  been  suspended  for  non-payment  of  a  certain  assess- 
ment, and  asks  that  he  be  reinstated  under  certain  by-laws 
which  provide  for  the  restoration  of  delinquent  members,  the 
petition  is  evidence  of  a  waiver  of  any  formal  defects  in  the 
notice  of  that  assessment.5 

It  is  the  duty  of  a  person  who  has  been  expelled  from  a 
society,  or  whose  contract  of  insurance  is  no  longer  recognize  I 
by  the  society  to  be  in  force,  and  who  claims  that  he  is  still  a 
member  and  entitled  to  the  benefits  of  membership,  to  disaf- 
firm the  act  of  expulsion  or  the  forfeiture  within  a  reasonable 
time,  and  in  some  appropriate  and  distinct  manner,  under  the 
circumstances  of  the  case,  and  this  is  true  even  when  the  ex- 
pulsion is  null  and  void,  and  when  the  forfeiture  is  without 
any  good  foundation.     The  rights  of  a  member  of  a  mutual 

'Grand  Lodge  v.  Cressey,   t~  111.  rensky  v.  Supreme  Lodge  K.  of  H.. 

App.  616.  31  Fed.   Rep.  592;    i  Greenl.   Ev.  at 

2  Hoffman  v.  Supreme  Council,  section  171.  .As  to  declarations  and 
supra.  admissions  of  a  member,  Bee  §  836. 

3  See  $  102a.  'Hansen   v.   Supreme   Lodge,  1 10 
*  Mutual  Reserve  v.  Hamlin,  189 U.    111.  801;  39  N.  Bast.  Rep.  L121;  Grand 

S.  297;  11  Sup.  Ct.  Rep.  fill;  Dodge  Lodge  v.  Cressey,  47  III.  App.  (316. 
v  Freedmans  Co.,  93  U.  S.  379;  La- 


550  .       ASSESSMENTS. 

benefit  society  rest  merely  in  contract,  and  hence,  his  expul- 
sion or  the  forfeiture  of  his  contract  of  insurance  is  no  more 
than  the  breach  of  a  contract,  and  although  void  for  want  of 
jurisdiction,  or  for  want  of  proper  foundation  in  fact,  it  is  no 
more  than  an  act  which  is  void  in  the  sense  of  being  voidable 
at  the  election  of  the  member.  He  may,  at  his  election,  affirm 
or  disaffirm  it.  Where  he  takes  no  steps  of  any  kind  to  secure 
his  reinstatement,  permits  dues  to  remain  unpaid  which  had 
accrued  and  were  payable  prior  to  the  date  of  his  expulsion, 
does  not  tender  them,  or  any  which  accrue  subsequently,  and 
does  not  pay  or  tender  subsequent  assessments  of  which  he 
had  notice,  he  must  be  taken  to  have  acquiesced  in  and  con- 
sented to  the  sentence  of  expulsion  or  the  asserted  forfeiture 
of  his  contract,  and  no  recovery  may  be  had  for  benefits  de- 
pendent upon  his  continued  membership.1  But  where,  as  in 
one  case,2  he  resists  the  expulsion,  though  without  appeal,  and 
fails  for  a  year  to  pay  subsequent  dues  which  were  not 
demanded  of  him,  it  may  be  regarded  that  he  has  sufficiently 
manifested  his  disaffirmance  of  the  sentence  of  expulsion;  and 
where,  as  in  another  case,3  he  continues  to  tender  all  dues 
when  payable,  this  is  clearly  so. 

§  295.  Excuse  for  non-payment,  insanity,  act  of  God. — 
Where  there  is  no  provision  of  the  contract  of  insurance, 
which  declares  either  expressly  or  by  necessary  implication 
that  sickness,  insanity  or  similar  incapacity  shall  excuse  the 
non-payment  of  an  assessment  on  the  day  it  is  due,  the  courts 
can  not  grant  relief  against  such  contingencies.4  As  we  have 
seen,6  the  payment  of  an  assessment  is  not  a  personal  service, 
but  may  be  made  by  any  person  on  behalf  of  the  insured.  It 
may  be  made,  even  though  the  insured  know  nothing  about  it 
or  be  incapable  of  knowing  anything.  It  may  not,  therefore, 
be  said  that  his  incapacity  makes  payment  impossible.  Courts 
will  sometimes  relieve  against  absolute  impossibilities,  as 
where  the  subject-matter  of  a  contract  is  destroyed  without 
the  fault  of  the  party  asking  for  relief,  but  they  will  not 

1  Glardon  v.  Supreme  Lodge,  5  Mo.  4  Klein  v.  Ins.  Co.,  104  XJ.  S.  88; 
App.  45;  see  §  58.  Thompson  v.  Ins.  Co.,  104  U.  S.  252; 

2  Mulroy  v.  Supreme  Lodge,  28  Mo.  Wheeler  v.  Ins.  Co.,  82  N.  Y.  543;  16 
App.  463.  Hun  317;  Carpenter  v.    Association, 

3  Hoeffner  v.  Grand  Lodge,  41  Mo.  68  Iowa  453;  27  N.  W.  Eep.  456. 
App.  359,  367.  5  §  272. 


ASSESSMENTS.  551 

relieve  in  cases  where  ordinary  prudence  might  have  averted 
the  calamity.  It  is  the  duty  of  the  insured  to  make  known  to 
the  proper  persons  the  conditions  of  his  insurance,  and  to  pro- 
vide for  the  prompt  payment  of  assessments  as  they  become 
due. 

The  case  of  Hillyard  v.  Mutual  Benefit  Life  Insurance  Com- 
pany,1 holds  that  a  failure  to  pay  a  premium  on  the  day  fixed 
may  be  excused,  if  the  failure  occurred  through  no  fault  of  the 
insured,  but  by  the  act  of  the  law,  or  the  act  of  God.  But 
this  doctrine  is  not  in  harmony  with  the  adjudicated  cases 
upon  this  subject.2  AVhile  it  is  the  general  rule  that  sickness, 
insanity  or  similar  incapacity  on  the  part  of  the  member  will 
not  excuse  the  non-payment  of  an  assessment  within  the  stip- 
ulated time,  yet  the  charter,  by-laws  or  certificate  of  member- 
ship may  contain  provisions  qualifying  the  rule,  although  not 
stating  the  qualification  in  express  language  bearing  upon 
that  point.  Thus,  a  rule  of  a  society  forfeiting  the  contract 
of  insurance  for  non-payment  of  an  assessment  within  thirty 
days  after  mailing  of  notice  also  provided  that  "for  valid 
reasons  to  the  officers  of  the  association  (such  as  a  failure  to 
receive  notice  of  an  assessment)  he  (the  defaulting  member) 
may  be  reinstated  by  paying  the  amount  of  arrearages."  On 
February  12,  1886,  the  deceased  received  notice  of  an  assess- 
ment to  be  paid  on  or  before  March  15th.  On  March  8th, 
while  apparently  in  good  health,  he  was  suddenly  stricken 
with  apoplexy,  rendering  him  immediately  speechless  and 
insensible.  He  never  regained  consciousness,  and  died  on 
March  19th  without  having  paid  the  assessment.  It  was  held 
that  his  sudden  illness  did  not  excuse  the  non-performance  of 
the  condition  of  the  contract,  but  that,  by  reason  of  the  law 
of  the  society  providing  for  the  reinstatement  of  a  member 
"for  v;i lid  reasons  to  the  officers  of  the  association,"  it  was  a 
question  of  fact  for  the  jury,  whether  the  excuse  was  sufficient, 
and  that  the  right  of  the  decedent  to  have  that  question  deter- 
mined by  a  jury  passed  to  his  beneficiary  upon  his  death.3 

1  85  N.  J.  Law  415.  111.   App.  101:  Bee  Bliss  on  Life  In- 

2Hawkshaw  v.  Supreme  Lodge.  29    suranee    at    section    179;     see     also 

Fed.    Rep.    770;    Yoe   v.    Benevolent    Howell   v.  Knickerbocker  Life  Ins. 

Association,  63  Md.   80:    Ingram   v.    Co.,  44  N.  Y.  276. 

Supreme  Council,    14  X.  Y.  St.  Re-       3Dennis  v.  Association,  120  N.  Y. 

porter  600;  Grand  Lodge  v.  Jesse,  50  496;  24  N.   Ea.st.   Rep.  843;  atlirming 


552 


ASSESSMENTS. 


§  296.     Excuse    for  non-payment,  Sunday,   holiday . — Tf 

the  time  for  the  payment  of  an  assessment  expires  on  Sunday, 
at  noon,  and  the  member  dies  on  Sunday  afternoon,  the  society 
is  liable,  since  the  assessment  is  not  payable  until  the  follow- 
ing Monday.1  A  contract  of  insurance  provided :  "  This  policy 
will  not  be  considered  in  force  if  the  premium  remains  unpaid 
beyond  thirty  days  after  becoming  due."  The  thirty  days 
expired  on  Sunday  and  the  premium  was  tendered  on  Monday. 


47  Hun  338;  14  N.  Y.  St.  Reporter, 
605.  The  word  "valid"  as  used 
above  is  equivalent  to  "  good,"  "  suf- 
ficient" or  "  satisfactory."  The  offi- 
cers may  not  arbitrarily  reject  an  ex- 
cuse, under  such  a  provision,  but  the 
manner  in  which  they  exercise  their 
power  under  it  is  open  to  review  in 
the  courts.  "That  which  the  law 
will  say  a  contracting  party  ought  in 
reason  to  be  satisfied  with,that  the  law 
will  say  he  is  satisfied  with."  Mie- 
sellv.  Ins.  Co.,76N.Y.  115;  Boiler  Co. 
v.  Garden,  101  N.  Y.  387;  4  N.  East. 
Eep.  749;  Folliard  v.  Wallace,  2 
Johns.  395;  City  of  Brooklyn  v.  R.  R. 
Co.,  47  N.  Y.  475;  Braunstein  v.  Ins. 
Co.,  1  Best  &  S.  782;  Moore  v.  Wool- 
sey,  4  El.  &  Bl.  243;  Van  Houten  v. 
Pine,  38  N.  J.  Eq.  72;  Jackson  v.  As- 
sociation, 78  Wis.  463;  47  N.  W.  Rep. 
733. 

1  Hammond  v.  American  Mutual, 
10  Gray  306;  20  Law  Reporter  273; 
Howland  v.  Continental  Ins.  Co.,  121 
Mass.  499;  Taylor  v.  Germania  Ins. 
Co.,  2  Dillon  282;  Sands  v.  Lyon,  18 
Conn.  69;  Salter  v.  Burt,  20  Wend. 
205;  Holbrook  v.  Ins.  Co.,  86  Iowa 
255;  53  N.  W.  Rep.  229.  In  Ham- 
mond v.  American  Mutual,  etc., 
supra,  it  is  said  :  "  The  only  question 
in  the  case  seems  to  be  whether  Sun- 
day is  to  be  excluded  as  a  day  of  pay- 
ment, and  the  payment  properly  post- 
poned till  Monday,  or  whether  the 
party,  to  save  his  policy  from  being 
forfeited,  must  make  his  quarterly 
payment  on  or  before  Saturday,  when 


the  quarter  day  falls  on  Sunday. 
We  have  on  the  one  hand  the  rule  as 
to  commercial  paper,  or  negotiable 
notes  payable  with  grace  requiring 
payment  to  be  made  on  Saturday 
where  the  third  day  of  grace  falls  on 
Sunday:  and  on  the  other  a  rule 
generally  adopted  as  to  other  con- 
tracts to  pay  money,  or  perform 
other  specific  duties  on  a  certain  day 
named,  that  if  such  day  falls  on  Sun- 
day, the  day  of  performance  is  post- 
poned till  Monday.  In  reference  to 
notes  payable  on  a  certain  day,  but 
entitled  to  three  days'  grace,  it  is 
said  that  in  such  case  the  note  by  its 
terms  would  be  due  and  \  ayable  two 
days  earlier  than  Saturday,  and  that 
what  was  originally  a  mere  indul- 
gence to  casualty  or  oversight  should 
not  be  extended,  and,  therefore,  if 
the  last  of  three  days  of  grace  falls 
on  Sunday,  the  payment  must  be 
made  on  Saturday,  and  that  it  was 
more  reasonable  to  take  from,  than 
to  add  to,  a  period  of  time  thus  orig- 
inally allowed  as  mere  grace  and 
favor.  But  as  to  other  contracts, 
which  by  the  face  of  the  instrument 
required  a  payment  on  a  day  which 
proves  to  be  Sunday,  to  discharge 
literally  the  promise  or  duty,  the  law 
seems  to  sanction  the  postponement 
of  the  time  for  doing  the  same  till  the 
Monday  following.  In  other  words, 
Sunday  is  not  a  legal  day  for  the  per- 
formance of  contracts  and  doing  secu- 
lar business." 


ASSESSMENTS.  553 

The  court  held  that  the  tender  was  made  in  time,  and  said : 
"  The  court  is  warranted  in  saying,  that  when  from  accident 
or  mutual  error,  the  day  of  fulfilling  an  agreement  falls  upon 
Sunday,  there  is  enough  of  principle  and  authority  to  justify 
the  party  in  deferring  his  performance  to  the  Monday  ensuing, 
without  impairing  a  right  or  incurring  a  forfeiture.' 

A  statute  of  Kentucky  provides  that  Thanksgiving  day  shall 
be  treated  as  Sunday,  as  to  the  presentment,  acceptance  and 
protesting  of  notes  and  bills.  The  court  of  appeals  of  that 
state  held  that  this  statute  did  not  apply  to  other  business 
transactions  and  contracts,  and  that  the  payment  of  an  assess- 
ment should  be  made  on  Thanksgiving  day,  if  so  contracted, 
notwithstanding  the  statute.2  The  statutes  of  the  different 
states  must  be  consulted  in  order  to  determine  whether  a  legal 
holiday  will  excuse  the  non-performance  of  a  contract  to  pay 
an  assessment  falling  due  on  that  clay. 

1  Campbell  v.  International  Life,  4  2  National  Mutual  v.  Miller,  85  Ky. 
Bosw.  298.  88;  2  S.  W.  Rep.  900. 


CHAPTER  XXI. 

ASSESSMENTS. 

§  297.    "Waiver  of  forfeiture,  agreement  of  officers,  printed  prospectus. 
298,  299.     Waiver  of  forfeiture,  custom  of  society. 
300,  301.     "Waiver  of  forfeiture,  receipt  of  assessments,  estoppel  in  pais. 

302.  Waiver  of  forfeiture,  assessments  retained  by  the  society. 

303,  304.     "Waiver    of    forfeiture,    conditional   acceptance  of    past  due 

assessments. 

305,  306.     "Waiver  of  forfeiture,  the  levy  of  an  assessment  on  a  delin- 
quent member. 

307.     "Waiver  of  forfeiture,  attempt  to  collect  assessments. 

§  207.  Waiver  of  forfeiture,  statements  and  agreements 
of  officers  of  the  society,  printed  prospectus  of  the  soci- 
ety.— -Where  the  officers  of  a  society  circulate  a  pamphlet 
among  its  members,  stating  that  thirty  days  of  grace  will  be 
given  for  the  payment  of  dues  and  assessments,  the  society  is 
estopped  to  claim  a  forfeiture  on  account  of  the  failure  to  pay 
on  the  day  stipulated,  where  the  member .  relies  upon  such 
statement,  and  fails  to  pay  promptly.1  Where  a  member  of  a 
mutual  benefit  society,  relying  on  the  promise  of  its  manager 
to  draw  on  him  for  assessments,  and  being  misled  by  the  fact 
that  such  drafts  had  been  twice  made  on  him,  is  suspended  be- 
cause of  non-payment  of  an  assessment  for  which  no  draft  was 
made,  and  is  unable  to  be  reinstated  for  the  reason  that  his 
health  hfis  become  impaired,  the  society  is  estopped  from  in- 
sisting upon  a  forfeiture.2  A  director  of  a  society  called  upon  a 
sick  member  who  was  insured  in  the  society.  The  sick  member 
said  to  him  that  an  assessment  was  due  on  the  following  Fri- 
day, that  he  could  send  out  and  borrow  the  money  to  pay  it,  but 
that  he  expected  some  money  on  the  following  Monday,  and  did 
not  like  to  borrow  it.     He  asked  the    director  to    pay  the 

'Fowler  v.    Metropolitan  L.    Ins.       sMcCorklev. Association, 71  Texas 
Co.,   41   Hun  357;    Ruse  v.   Mutual    149;  8  S.  W.  Rep.  516. 
Co.,  24  N.  Y.  653;  Howell  v.  Knick- 
erbocker Co.,  44  N.  Y.  276. 

(554) 


ASSESSMENTS.  555 

assessment  for  him,  promising  to  repay  him  on  the  following 
Monday.  The  director  assured  him  that  he  would  pay  it  for 
him  at  once,  but  neglected  to  do  so,  and  the  society  claimed 
that  his  rights  were  forfeited.  The  court  held  that  the  prom- 
ise of  the  director  was  one  upon  which  the  member  had  a 
right  to  rely,  and  that  the  member  should  be  reinstated.1 

The  statement  of  the  secretary  of  a  mutual  benetit  society 
to  the  insured  member  that  he  need  not  pay  his  dues  until 
certain  charges  then  pending  against  him,  which  if  true  made 
the  policy  forfeitable,  were  disposed  of,  is  one  upon  which  the 
insured  has  a  right  to  rely,  and  will  excuse  the  non-payment 
of  assessments  until  that  time.2  The  by-laws  of  an  unincor- 
porated mutual  benefit  society  provided  that,  in  case  a  mem- 
ber for  failure  to  pay  an  assessment  promptly  had  been  dropped 
from  the  society  by  the  secretary,  the  board  of  directors  should 
have  power  to  reinstate  him  on  his  presenting  to  them  a  reason- 
able excuse  for  such  failure,  and  paying  the  sum  in  arrears. 
A  member,  being  delinquent,  appeared  before  them,  and  of- 
ferred  a  sufficient  reason  for  his  delinquency,  and  the  board 
refused  to  reinstate  him  because  they  alleged  his  health  was 
precarious.  He  died  very  soon  afterward.  The  court  after 
his  death,  inquired  into  and  determined  the  adequacy  of  the 
reason  so  offered,  and  compelled  the  society  to  pay  the  amount 
of  insurance  to  which  such  delinquent's  widow  was  entitled." 
A  person  having  notice  that  an  agent  with  whom  he  is  deal- 
ing is  acting  beyond  the  scope  of  his  authority,  can  not  hold 
the  principal.  The  promise  of  an  agent  of  a  mutual  benefit 
society  to  a  member  whom  he  owes,  that  he  will  pay  such  as- 
sessment as  may  be  made  by  the  society  and  become  debtor 
therefor  to  the  society,  is  of  itself  notice  that  the  agent  is  acting 
outside  of  his  authority;  and  the  society  is  not  bound  to  ac- 
cepl  the  agent  instead  of  the  member  as  his  debtor  unless  it, 
with  full  knowledge  of  what  the  agent  has  done,  affirms  or 

1  Van  Houten  v.  Pine,  9  Stew.  Eq.  3  VanHouten  v.  Pine,  38  N.  J.  Eq. 

133;  38  N.  J.  Eq.  78.  72;  it  stew.  Eq.  L8S.    The  excuse  w  as 

9  National  Mutual  v.  Jones,  84  Ky.  that  a  director  <>f  the  society   had 

110;  3  S.  W.  Rej>.  447:  Robertson  v.  promised   and  assured  the  member 

Ins.  Co.,  47  N.  Y.  Superior  Ct.  377;  that  he  himself  would  pay  the  assess- 

Loughridge  v.  Association.  M   Iowa  rncnt    due    the   next    Friday,  in  oon- 

141;  50  N.  W.  Rep.  508;  Mallory  v.  sideration  of  the  promise  of  the  mem- 

.Ins.  Co.,  90  Mich.  112;  51  N.  W.  Rep,  ber  to  repay  him  the  amount  of  such 

188.  assessment  on  the  Monday  following. 


556  ASSESSMENTS. 

ratifies  it.1  A  printed  prospectus  is  inadmissible  to  control 
the  terms  of  a  certificate.2 

Where  a  member  was  misled  by  the  statements  of  an  officer 
of  the  society  and  was  by  such  statements  induced  to  refrain 
from  paying  assessments  which  he  otherwise  would  have  paid, 
his  beneficiary  is  entitled  to  recover  on  the  contract  after  his 
death,  upon  payment  of  such  assessments  and  al]  others  which 
may  be  due. 3 

§298.  Waiver  of  forfeiture^  custom  of  the  society. — 
While  it  is  sometimes  said  that  custom  is  never  permitted  to 
overcome  the  express  terms  of  a  contract,  yet  a  custom  may 
change  the  express  provisions  of  a  contract,  where  it  has  the 
necessary  elements  of  an  estoppel.  If  a  society  continually 
waives  a  forfeiture,  and  this  fact  is  known  to  the  public  and 
to  the  member,  it  is  bound  by  the  custom  in  that  regard. 
Such  a  custom  must  be  clearly  established,  and  its  uniformity 
and  duration  shown.  When  it  is  urged  that  a  society  in  each 
particular  case  has  waived  the  prompt  payment  of  the  assess- 
ment, the  question  is  whether  the  custom  or  usage  of  the 
society  in  this  respect  was  so  general  and  usual  as  to  estop  it 
from  asserting  that  there  was  a  forfeiture  in  the  particular 
case  at  bar.  Isolated  instances  of  waiver  of  forfeiture  are 
insufficient  to  prove,  a  custom,  and  can  not  be  shown  to  over- 
come or  change  the  express  provisions  of  the  contract  of 
insurance.4  Knowledge  of  the  custom  on  the  part  of  the 
member  must  be  shown  in  order  to  be  binding  on  the  society, 
and  where  all  that  was  shown  in  regard  to  the  extent  of  a  mem- 
ber's knowledge  that  the  society  waived  prompt  payment,  was 
that  he  had  paid  twenty -three  assessments,  one  five  days  after 
maturity,  and  four  from  one  to  three  days  after  maturity,  it 
was  held  that  the  evidence  did  not  tend  to  show  that  the 

1  Co-operative  Association  v.  Mc-  30  Iowa  133;  Smith  v.  Ins.  Co.,  2 
Connico,  53  Miss.  233.  Tenn.  Ch.  727;  Ball  v.  N.W.  Asso- 

2  Ruse  v.  Ins  Co.,  23  N.  Y.  516;  Mu-  ciation(Minn.),  57  N.  W.  Rep.  10  3. 
tual  Benefit  v.  Ruse,  8  Ga.  534;  Smith  3  Colby  v.  Life  Indemnity  Co. 
v.  Ins.  Co.,  103  Pa.  St.  177;  Fowler  v.  (Minn.),  59  N.  W.  Rep.  539. 

Ins.   Co.,  116  N.  Y.  389;  Ins.  Co.  v.  4  Willcut  v.  N.  W.  Mutual,  81  Ind. 

Bratt,  55  Md.  200;  Union  Central  v.  301;  Crossman,  Adm'x,  v.  Mass.  Ben., 

Cheever,  36  Oh.  St.  201;  Continental  143  Mass.  435;  9  N.  E.  Rep.  753;  111. 

Ins.  Co.  v.  Hamilton,  41  Oh.  St.  274;  Masons'  Benevolent  Soc.  v.  Baldwin, 

contra,  see  Southern  Mutual  v.  Mon-  86  111.  479. 
tague,  84  Ky.  653;  Walsh  v.  Ins.  Co., 


ASSESSMENTS.  00 1 

member  had  had  knowledge  of  any  custom  of  the  society  in 
that  respect.1 

The  by-laws  of  a  society  provided  for  payment  of  assess- 
ments within  thirty  days  after  proper  notice,  and,  in  default 
thereof,  for  forfeiture  of  the  rights  of  membership.  A  mem- 
ber failed  to  pay  an  assessment  and  died.  In  a  suit  on  the 
certificate,  it  was  shown  that  it  was  the  custom  of  the  society, 
if  a  member  failed  to  pay  his  assessment  after  one  notice,  to 
give  him  a  second  one,  requiring  him  to  pay  within  ten  days, 
and  that  the  deceased  member  had  not  been  given  a  second 
notice.  The  evidence  did  not  establish  any  knowledge  of  such 
a  custom  on  the  part  of  the  deceased  and  was  held  insufficient.2 
While  a  custom  may  not  be  urged  to  affect  the  terms  of  a 
contract  to  the  extent  of  enlarging  or  abridging  it,  yet  it  may 
interpret  it.3 

Where  it  is  shown  that  a  large  number  of  assessments  on 
members  were  accepted  by  a  society  after  they  were  due,  and 
it  is  claimed  that  a  waiver  of  forfeiture  should  be  implied 
therefrom,  but  no  practice  is  shown  of  receiving  past  due  as- 
sessments from  sick  members,  such  waiver  does  not  extend  to  a 
member  who  was  sick  at  the  time  his  past  due  assessment  was 
tendered  to  the  society.4  In  an  action  on  a  certificate  on 
which  the  society  denies  liability  because  of  the  non-payment 
of  an  assessment,  evidence  is  inadmissible  that  it  was  defend- 
ant's custom  to  reinstate  members  on  payment  of  delinquent 
assessments,  as  a  matter  of  course,  if  no  other  charges  were 
preferred  against  them.5  In  a  suit  upon  a  certificate  of  insur- 
ance it  was  held  that,  even  though  a  custom  of  leniency  to  its 
members  in  receiving  assessments  after  the  stipulated  time, 
were  thoroughly  established,  there  was  nothing  in  such  a  cus- 
tom which  would  prohibit  either  an  inquiry  by  the  society  as 
to  the  health  of   the   member   who  desired   to   take  advan- 

■Bosworth  v.  Western  Mutual,  7.">  Germania  L.  Ins.  Co.,  18  Minn.  44S; 

Iowa  582;  39  N.  W.  Rep.  908;  Mars-  A.lams  v.  Otterback,     15  Bow.   539; 

ton  v.  Ins.  Co.,  59  N.  H.  92;  Gater-  Taylor  v.  .Ktn.i  L.  Ins.  Co.,  13  Gray 

man  v.    Ins.    Co.,    1   Mo.  App.   300;  434. 

Lantz  v.  Ins.  Co.,    139  Pa.  St.  546;  *Rappv.  Palmer,  3  Watts  178. 

20  Atl.  Rep.  80;  McGowan  v.  Asso-  •'Schmidt  v.  Modern  Woodmen,  84 

ciation,  28  N.  Y.  Supp.  177.  Wis.  101;  54  N.  W.  Rep.  264. 

*  National  Mutual  v.  Jones,  84  Ky.  'Dickinson    v.  Grand    Lodge  (Pa. 

110;  2  S.  W.  Rep.  447;  Schwarz    v.  St.).  88  Atl.  Rep.  293. 


558  ASSESSMENTS. 

tage  of  the  custom,  or  the  refusal  of  the  money  when  ten- 
dered, if  the  health  of  the  applicant  was  so  impaired  as  to 
increase  the  risk.1  But  in  Stylow  v.  Wisconsin  Odd  Fellows,2 
the  language  of  the  court  might  be  construed  as  favoring  the 
opposite  doctrine.  In  that  case,  the  by-laws  of  the  society 
provided  that  membership  should  be  forfeited  by  failure  to 
pay  an  assessment  within  sixty  days  after  notice,  but  that  re- 
instatement might  be  had,  the  company  reserving  the  right  to 
exact  a  physician's  certificate  of  good  health.  In  an  action  on 
a  certificate  issued  by  the  society,  it  was  shown  that  at  the 
death  of  the  member  holding  the  certificate,  sixty-seven  assess- 
ments had  been  made  against  him.  Of  these  the  last  three 
had  not  been  paid— Nos.  17,  18  and  19.  The  evidence  dis- 
closed the  fact  that  the  society  made  assessment  No.  19  against 
the  deceased  two  days  after  he  was  in  default  for  assessment 
No.  17.  for  the  non-payment  of  which  the  society  claimed  he 
forfeited  all  rights  under  his  contract  with  the  society.  Of 
the  remaining  sixty-four  but  one  assessment  had  been  paid 
within  the  sixty  days  and  all  payments  had  been  received 
without  demand  for  a  physician's  certificate,  though  some 
payments  were  made  one  hundred  days  late.  The  court  said  : 
"  The  assured  had  every  reason  to  believe  that  the  company 
would  accept  the  payment  of  these  assessments  as  it  accepted 
the  payment  of  all  others,  within  a  reasonable  time  after 
they  became  due,  without  making  any  question  as  to  his  state 
of  health.  *  *  We  are  of  opinion  that  after  the  constant 
course  of  conduct  of  the  company  with  the  assured,  as  shown  by 
the  evidence  in  this  case,  the  only  way  the  company  could  in- 
sist upon  a  forfeiture  for  non-payment  within  the  time  fixed 
by  the  by-laws  would  be  by  giving  the  assured  personal 
notice  that  thereafter  punctual  payment  would  be  required."  3 
Where  a  certificate  provided  that  it  should  be  void  if  an 
assessment  were  not  paid  within  ten  days  after  due  no- 
tice, but  it  appeared  that  the  society  had  been  accustomed  for 
two  years  to  receive  payments  from  the  member  if  made  within 

1  National  Mutual  v.  Miller,  85  Ky.       2  69  Wis.  224;  34  N.  W.  Rep.  151 . 
88;  2  S.  "W.  Rep.  900;  see  also  Lewis       3See  Insurance  Co.  v.  Hinesley,  75 
v.  Phcenix  Mutual,  44  Conn.  72;  Mu-    Ind.  1. 
tual  Life  v.  Ins.  Co.,  100  Pa.  St.  172; 
Crossman  v.  Association,  143  Mass. 
435;  9  N.  East.  Rep.  753. 


ASSESSMENTS.  559 

sixty  days  from  the  time  he  received  the  notice,  and  the  cer- 
tificate remained  uncanceled  at  the  death  of  the  member 
within  that  time,  the  society  was  estopped  to  claim  a  forfeiture 
for  non-payment  of  an  assessment  within  the  ten  days.1 

Where  a  contract  provides  for  a  forfeiture  unless  an  assess- 
ment is  paid  by  a  certain  time,  but  the  society  has  accepted  pay- 
ment of  more  than  half  of  such  assessments  after  they  were 
due,  without  warning  of  any  possible  forfeiture  in  the  future, 
if  the  last  assessment  be  paid  or  tendered  within  the  same 
time  after  maturity  as  the  majority  of  the  previous  ones,  the 
society  is  estopped  from  asserting  a  forfeiture,  though  the 
insured  died  before  it  was  paid  or  tendered.2  A  general  prac- 
tice and  course  of  business  which  will  naturally  lead  a  mem- 
ber to  rely  upon  the  acceptance  of  payment  for  assessments, 
after  failure  to  pay  in  the  time  prescribed  by  the  policy,  will 
operate  as  a  waiver  of  the  forfeiture.  Insurance  companies 
can  not  lead  customers  to  rely  upon  their  usages,  course  of 
business,  and  the  declarations  of  their  officers,  which  disarm 
vigilance,  overcome  watchfulness,  and  remove  stimulus  to 
promptness  in  payments  provided  by  their  policies,  and  then 
rigidly  enforce  the  conditions  of  payment.  They  must  give 
to  the  customers  the  indulgence  which  they  thus  promise. 
Forfeitures  on  account  of  omissions  to  pay  sums  provided  by 
the  policies  will  be  regarded  as  waived  by  such  usages,  course 
of  business,  and  declarations  of  officers.3 

§  299.  Where  the  uniform  custom  of  the  society  has  been 
to  give  notice  of  the  time  when  assessments  fall  due,  and  to 
collect  the  same  at  the  residence  of  the  member  through  a 
local  agent  residing  in  his  neighborhood,  good  faith  requires 

1  Odd  Fellows'  Mutual  v.  Sweetser,  Rep.  443;  Pittsburgh  Boat- Yard  Co. 

117  Ind.  97;  1!)  N.  East.  Rep.  722.  v.  Western  Assur.    Co.,    118   Pa.  St. 

*Spoeri  v.  Ins.   Co.,  89   Fed.    Rep.  415;  11  Atl.  Rep.  801;  Tripp  v.  Insur- 

752;  Hanley  v.    Association,  69  Mo.  ance  Co.,  55  Vt.  100:  Marston  v.  In- 

380;  Goedeeke   v.    Ins.    Co.,   30  Mo.  surance  Co.,  59  N.  H.  92;  Insurance 

App.  608;  Boutonv. Ins.  Co.,  35€k>nn.  Co.  v.  Lester,  62  Ga.  247:  Insurance 

542;  Illinois  Ins.  Co.  v.   Stanton.  57  Co.  v.  Garmany,  74  Ga.  51;  Thomp- 

111.  354;  White  v.  Ins.  Co..  120  Mass.  son  v.  Insurance  Co.,  52  Mo.  4(59:  In- 

330:  Meyer  v.  Ins.  Co.,  51  How.  267;  surance  Co.  v.  Scheidle,  L8    Neb.  195; 

Alabama  Gold  Ins.  Co.  v.  Garmany,  25  N.  W.  Rep.    620;  Loughridge   v. 

74  Ga.  51.  Association,  84  Iowa.  141;  50   X.  W. 

3  Mayer  v.  Insurance  Co.,  38  Iowa,  Rep.    568;  but  see  Richardson  v.  Ins. 

304;  Unsell  v.  Insurance  Co.,  32  Fed.  Co.  (Ky.),  18  S.  W.  Rep.  165. 


560  ASSESSMENTS. 

that  this  mode  of  collecting  should  not  be  discontinued,  and 
payment  required  at  the  office  of  the  society,  without  notice 
to  the  insured.1  But  it  has  been  held  that  where  the  exact 
time  of  payment  is  fixed  by  the  contract,  and  the  society  has 
been  accustomed  to  notify  the  insured  in  advance  of  that  date, 
and  to  urge  him  to  be  punctual,  it  may,  nevertheless,  cease  to 
give  such  notice  at  any  time,  without  informing  him  that  such 
notice  will  no  longer  be  given.2  If  the  practice  of  a  society 
and  its  course  of  dealing  with  its  members,  known  to  the  in- 
sured, have  been  such  as  to  induce  a  belief  that  so  much  of  the 
contract  as  provides  for  a  forfeiture  in  a  certain  event,  will  not 
be  insisted  on,  the  society  will  not  be  permitted  to  set  up  such 
forfeiture,  as  against  one  in  whom  their  conduct  has  induced 
such  belief.3  Where  a  party  to  a  contract,  who  is  entitled  to 
a  forfeiture  in  case  of  the  non-performance  by  the  other  party 
of  a  condition  therein,  by  his  own  act  induces  such  other  to 
omit  strict  performance  within  the  time  limited,  he  can  not 
exact  the  forfeiture  if  the  party  in  technical  default,  with  rea- 
sonable diligence  thereafter,  performs  or  offers  to  perform  the 
condition.4  It  is  a  well  settled  and  salutary  rule  of  law,  that 
a  party  can  not  insist  upon  a  condition  precedent,  when  its 
non-performance  has  been  caused  by  himself.5  Between  August 
17, 1883,  and  February  27,  1885,  fifteen  assessments  were  made 
by  a  society  on  a  member  residing  in  Watertown,  JN".  Y.,  and 
ail  of  them  were  paid  by  the  member  by  his  sending  to  the 
society,  at  its  place  of  business  at  Cincinnati,  Ohio,  by  mail, 

1  Ins.  Co.  v.  Bernard,  33  Ohio  St.  Co.  v.  Eggleston,  96  U.  S.  572;  Ins. 
459;  Seamans  v.  N.  W.  Mut.  Life,  3  Co.  v.  Pierce,  75  111.  426;  Bradwell  v. 
Fed.  Rep.  325;  Hanley  v.  Life  Ass'n,  Ins.  Co.,  75  N.  C.  8;  Thompson  v.  Ins. 
etc.,  69  Mo.  380;  Illinois  Ins.  Co.  v.  Co.,  52  Mo.  469. 

Stanton,  57  111.  354;  Bouton  v.  Mut.       4Kenyon  v.  Association,  122  N.  Y. 

Life,   etc.,   25  Conn.   542;  White  v.  247;  25  N.   East.  Rep.  299;    48  Hun 

Conn.  Ins.  Co.,  120  Mass.  330;  Meyer  278;  17  N.  Y.  St.  Rep.  925;  Leslie  v. 

v.  Knickerbocker  Life,  51  How.  267;  Ins.  Co.,  63  N.  Y.  27;  True  v.  Asso- 

Truev.  Association,  78  Wis.  287;  47  N.  ciation,  78  Wis.  287;  47  N.  W.  Rep. 

W.  Rep.  520.  520;  Penn.  Mutual  v.  Keach,  134  111. 

2  Thompson  v.  Ins.  Co.,  104  U.  S.  583;  26  N.  East.  Rep.  106;  Thompson 
252;  Mutual  Fire  Ins.  Co.  v.  Miller,  v.  Ins.  Co.,  52  Mo.  469;  Unsell  v.  Ins. 
58  Md.  463;  Mandego  v.  Life  Asso-  Co.,  32  Fed.  Rep.  443. 

ciation,  64  Iowa  134,  distinguishing  6  Young  v.    Hunter,  6  N.  Y.  207; 

Phoenix  Mut.  v.  Doster,  106  U.  S.  30.  Ins.   Co.  v.  Eggleston,  96  U.  S.  572; 

3  Ins.  Co.  v.  McCain,  96  U.  S.  84;  Wyman  v.  Ins.  Co.,  119  N.  Y.  274. 
In3.   Co.  v.   Wolff,  95  TJ.  S.  326;  Ins. 


ASSESSMENTS.  561 

his  check  on  the  "Watertown  National  Bank,  pavable  to  the 
order  of  its  secretary.  On  March  27,  1885,  the  assessment  in 
question  was  made.  It  was  for  $4.75.  On  April  4,  1885,  the 
member  sent  his  check  for  that  sum  precisely  as  he  had  paid 
all  the  former  assessments.  On  April  10,  a  second  notice  was 
sent  to  him,  asking  him  to  remit  by  check,  postal  order,  or  ex- 
press order,  to  which  he  replied  that  he  had  paid  that  assess- 
ment April  4,  and  had  the  receipt  of  the  society  for  it.  On 
April  15  the  societ}'  replied  that  there  must  be  a  mistake  some- 
where, as  its  officers  had  the  receipt  and  could  find  no  trace  of 
having  received  a  remittance  for  the  payment  of  such  assess- 
ment, and  requested  him  to  return  the  receipt  he  held,  that 
they  might  trace  the  matter  up,  promising  to  return  it  to  him. 
Before  the  receipt  of  this  letter  the  member  died.  His  death 
was  sudden  and  unexpected.  There  was  a  sufficient  fund  in 
bank  to  meet  this  check.  The  first  notice  of  assessment  re- 
quested the  member  to  remit  the  amount  by  sight  draft  on  a 
Cincinnati  or  New  York  bank,  or  by  an  express  money  order. 
On  these  facts  the  court  held  that  the  member  was  justified, 
by  the  course  of  dealing  between  the  parties,  in  regarding  the 
sending  of  his  check  as  equivalent  to  sending  a  draft  or  order, 
and  that  the  society  was  estopped  by  its  acts  and  course  of 
dcding  with  him  from  claiming  that  such  check  was  not  equiv- 
alent to  a  sight  draft,  at  least  so  far  as  to  prevent  it  from 
claiming  that  the  certificate  was  forfeited  by  reason  of  the 
non-payment  of  that  assessment.1 

The  fact  that  by  the  charter  of  a  mutual  benefit  societv  a 
particular  method  of  giving  notice  of  assessments  as  they  fall 
due  is  declared  to  be  sufficient  and  binding  on  all  members 
does  not  exempt  the  corporation  from  the  operation  of  the  prin- 
ciples of  equitable  estoppel,  which  apply  to  all  other  persons. 
natural  or  juridical.  The  charter  of  a  society  provided  that 
notices  of  assessments  posted  in  the  rooms  of  the  cotton  ex- 
change should  be  deemed  proper  notices  to  all  members. 
.Members  were  required  to  be  members  or  employes  of  the 
exchange,  but  it  was  also  provided  that"  any  member  may 
withdraw  from  the  cotton  exchange  without  severing  his  con- 
nection with  this  association,"  and  in  course  of  time  a  class  of 

1  Kenyon  v.  Association,  supra. 
36 


562  ASSESSMENTS. 

members  arose,  who  had  ceased  to  be  members  of  the  ex- 
change, and  had  lost  the  privilege  of  access  to  its  rooms,  and 
the  society  adopted  the  custom  of  sending  by  mail  written 
notices  of  assessments  to  all  such  members,  and  even  to  others 
who  requested  it.  A  member  of  the  society  had  ceased  to  be 
a  member  of  the  exchange,  and  notices  had  been  sent  to  him 
for  several  years.  He  failed  to  receive  notice  of  one  assess- 
ment, and  was  thereupon  suspended.  As  soon  as  the  default 
became  known,  payment  of  all  assessments  due  was  tendered, 
and  reinstatement  demanded,  but  the  society  insisted  that  all 
his  rights  were  forfeited.  It  was  held  that  the  society  was 
estopped  to  claim  that  the  member  was  entitled  to  no  other 
notice  than  the  posting  in  the  cotton  exchange,  and  the  court 
said:  "  We  can  discover  no  possible  reason  why  the  defend- 
ant should  be  exempt  from  the  application  of  the  principles 
of  equitable  estoppel  which  operate  upon  all  other  persons, 
natural  and  juridical,  nor  why  the  mere  fact  that  there  was  a 
contract  should  bar  their  application.  In  matters  affecting  the 
execution  of  contracts,  there  would  never  be  any  occasion  for 
invoking  the  doctrine  of  estoppel  if  the  party  had  complied 
with  the  terms  of  his  contract,  because  such  compliance  would 
be  of  itself  a  sufficient  basis  for  his  legal  right.  It  is  only  when 
the  terms  have  admittedly  not  been  complied  with  that  the  ques- 
tion arises  whether  the  other  party  has,  by  his  representations 
or  conduct,  estopped  himself  from  setting  up  such  non-com- 
pliance as  a  ground  of  forfeiture.  *  *  There  can  be  no 
doubt  that  the  long-continued  practice  of  the  defendant  com- 
pany to  send  to  (the  member)  prompt  notice  of  every  assess- 
ment as  soon  as  made,  justified  him  in  believing  that  he  would 
receive  such  notices,  and  in  acting  on  the  belief  that,  by  pay- 
ing when  so  notified,  his  rights  would  be  protected." !  In 
Helme  v.  Phila.  Life  Ins.  Co.,''  plaintiff  offered  on  the  trial  to 
prove  a  custom  among  life  insurance  companies,  to  allow 
thirty  days  of  grace  for  payment  of  premiums,  even  where  a 
clause  of  forfeiture  for  non-payment  on  a  time  certain  existed, 
and  the  court  held  that   the   testimony  should   have  been  ad- 

1  Gunther  v.    N.    O.    Cotton    Ex-  Fitzpatrick  v.  Ins.  Co.,  25  La.   Ann. 

change  Mut.  Aid  Ass'n,  40  La.  Ann.  443;  see  §  300;    True  v.  Association, 

777;  5  Southern  Rep.  65,  citing  Bige-  78  Wis.  287;  47  N.  W.  Rep.  520. 

low  on  Estoppel,  Introduction,  p.  64;  2  61  Pa.  St.  107. 


ASSESSMENTS.  5G3 

mitted.1  The  contrary  doctrine  has  been  held  in  several  cases.2 
A  condition  in  the  contract  of  insurance  issued  I  >y  a  mutual 
benefit  society,  providing  that  a  failure  to  comply  with  the 
rules  of  the  society  as  to  payments  shall  render  the  certificate 
void,  is  not  waived,  as  to  future  payments,  by  the  fact  that  the 
officers  have  reinstated  the  insured  member  when  he  has  failed 
to  make  payment  according  to  the  rules  of  the  society;  espe- 
cially when  another  rule,  which  is  a  part  of  the  contract,  per- 
mits the  officers  to  so  reinstate  a  member,  on  payment  of 
arrears,  for  any  valid  reason.3 

"Where  unknown  to  the  supreme  lodge,  a  custom  had  grown 
up  in  a  subordinate  lodge  for  the  latter  to  pay  one  assessment 
for  a  member,  in  case  he  failed  to  pay  it,  the  custom  is  not 
binding  on  the  supreme  lodge.4 

§300.  Waiver  of  forfeiture,  receipt  of  assessments, 
estoppel  in  pais. — The  doctrine  of  estoppel  in  pais  is  based 
upon  a  fraudulent  purpose  or  fraudulent  result.  If  the  ele- 
ment of  fraud  is  wanting,  there  is  no  estoppel,  as  where  both 
parties  were  equally  cognizant  of  the  facts,  and  the  declara- 
tions or  silence  of  the  one  party  produced  no  change  in  the 
conduct  of  the  other,  he  acting  solely  on  his  own  judgment. 
There  must  be  deception  and  change  of  conduct  in  consequence 
of  it.6  The  mere  act  of  receiving  or  collecting  assessments  by 
a  society  with  knowledge  of  an  existing  right  of  forfeiture  will 
not  estop  the  society  from  setting  up  such  forfeiture,  unless  the 
member  when  he  paid  the  assessments  had  reason  fairly  to 
conclude  from  the  acts  and  declarations  of  the  association  that 
the  forfeiture  had  been  or  would  be  waived,  or  unless  the  pay- 
ment was  made  in  a  reliance  upon  the  validity  of  the  contract 
of  insurance,  induced  by  the  acts,  declarations  or  silence  of 
the  society.  Thus,  in  one  case  *  the  member  informed  the  c<  >m- 
pany  that  he  had  changed  his  occupation  from  clerking  to 
braking  upon  a  railroad,  and  asked  what  change,  if  any,  was 

'  Ruse  v.  Mut.  Hen.,  26  Barb.  (N.  Y.)  4  Grand  Lodge  v.  Jesse,  50  111.  App. 

656;  24  N.  Y.  658;  Mayers  v.  Ins.  Co.,  101. 

38  Iowa  304;  Girard  Life  v.   Mutual  b  Davidson  v.  Young,  38  111.  152. 

Life,  97  Pa.  St.  1.  6  N.  W.  Mutual  v.    Amerman,   119 

'Mutual  Benefit  v.  Ruse,  8  Ga.  534;  111.    329;  10  N.  East.  Rep.   225;  over- 
Ins.  Co.  v.  Sefton,  58  Ind.  380;  Lewis  ruling  16  111.  App.  528. 
v.  Phoenix  Mutual,  41  Conn.  72. 

3  Grossman     v.     Association,     143 
Mass.  435;  9  N.  East.  Rep.  753. 


564  ASSESSMENTS.. 

necessary  in  his  policy.  The  company  informed  him  by  letter 
that  it  could  not  issue  a  permit  for  his  occupation  as  brakeman, 
but  advised  him,  as  he  did  not  expect  to  be  in  that  business 
long,  to  pay  the  premium  on  his  policy,  so  as  to  have  it  in 
force  when  he  should  stop  braking,  and  to  take  out  an  acci- 
dent policy  on  his  life,  while  in  that  business.  The  assured 
paid  the  premium,  and  was  killed  soon  afterward  while  at 
work  as  conductor  of  a  freight  train,  having  been  promoted 
from  brakeman  to  that  position.  The  court  held  that  the 
doctrine  of  estoppel  was  not  applicable  to  the  receipt  of  the 
premium  by  the  company  under  these  circumstances,  and  that 
the  company  was  not  liable.  Where  membership  in  a  mutual 
benefit  society  is,  by  the  by-laws,  made  to  depend  upon  contin- 
uance of  membership  in  a  particular  organization,  withdrawal 
from  membership  in  such  organization  forfeits  all  rights  in  the 
society;  and  the  subsequent  levy  and  collection  of  assessments 
by  the  society  from  one  who  had  withdrawn  from  member- 
ship in  such  organization,  does  not  continue  his  right  of  mem- 
bership in  such  society.  The  member  is  as  much  bound  by 
the  by-laws  as  the  society,  and  he  can  not  claim  a  waiver  of 
their  requirements.1  By  the  constitution  of  a  mutual  benefit 
society,  no  person  could  be  a  member  of  it  unless  he  was  a 
member  of  the  Improved  Order  of  Ked  Men,  and  on  failing 
to  pay  his  dues  to  the  I.  O.  K.  M.,  he  ceased  to  be  a  member 
of  the  benefit  society.  The  two  societies  were  independent, 
and  had  different  officers.  It  was  held  that  the  receipt  of 
assessments  by  the  mutual  benefit  society  in  ignorance  that 
the  person  paying  them  had  ceased  to  be  a  member  of  the  Eed 
Men  by  reason  of  non-payment  of  dues,  was  not  an  acquies- 
cence in,  or  waiver  of  the  fact  that  he  was  not  a  member  in 
good  standing  in  the  societ}r;  that  to  constitute  a  waiver  it 
should,  at  least,  appear  that  the  officers  of  the  society  knew, 
or  had  notice  of  the  fact,  that  the  person  had  ceased  to  be  a 
member  of  his  tribe  when  they  received  his  subsequent  assess- 
ment.2 A  waiver  of  a  right  presupposes  a  knowledge  of  the 
right  waived,  and  is  not  to  be  inferred  from  a  merely  negligent 

1  Burbank  v.  Boston  Police  Relief   ciation,  5  Oin.  Law  Bull.  516;  Ellerbe 
Association,  144  Mass.  434.  v.  Faust  (Mo.),  25  S.  W.  Rep.  390. 

8  Springmier  v.    Benevolent  Asso- 


ASSESSMENTS.  565 

act,  or  from  one  clone  under  a  misapprehension  of  the  real  con- 
dition of  the  rights  of  the  parties  at  the  time.1 

It  has  been  held  in  some  cases  that  knowledge  on  the  part 
of  a  society  that  a  statement  warranted  in  the  application  to 
be  true  is  false  and  the  subsequent  collection  of  assessments 
will  not  estop  it  from  insisting  upon  a  forfeiture  of  the  con- 
tract for  breach  of  the  warranty.2  It  has  also  been  held  that 
an  untrue  or  fraudulent  statement  by  the  member  in  his  appli- 
cation, of  a  fact  material  to  the  risk,  will  not  prevent  a  recoverv, 
if  the  society  knew  the  truth  in  regard  to  the  fact  when  it 
issued  the  contract  of  insurance  and  received  assessments  upon 
it;3  and  it  may  be  broadly  laid  down  as  the  general  rule  that 
where,  after  discovering  that  a  member  has  made  misrepre- 
sentations in  his  application,  a  society  continues  to  collect 
assessments,  it  thereby  waives  its  right  to  declare  invalid  the 
contract  obtained  by  such  misrepresentations.4  Knowledge  on 
the  part  of  the  society  of  a  breach  of  one  of  the  conditions  of 
the  contract  by  the  member,  and  the  subsequent  collection  of 
assessments,  is  a  waiver  of  the  right  to  forfeit  the  contract  for 
that  cause.6  Knowledge  on  the  part  of  the  society  and  the 
waiver  of  the  forfeiture  must  be  pleaded  to  be  made  available.0 

If  the  society  accept  payment  of  an  assessment  after  it  has 

1  Diehl  v.  Ins.  Co.,  58  Pa.  St.  443;  Ins.  Co.,  33  La.  Ann.  1353;  Day  v. 
Leonard  v.  Lebanon  Mutual,  3  W.  N.  Ins.  Co.,  1  McArthur  41;  iEtna  Life 
C.  527;  Lyon  v.  Supreme  Assembly,  v.  France,  91  U.  S.  510:  Jeffries  v. 
158  Mass.  83;  26  N.  East.  Rep.  236;  Ins.  Co.,  22  Wall.  47:  Morris..,,  v.  Ins. 
Wells  v.  Society,  17  Ontario  317.  Co.,  59  Wis.  163;  18  N.  W.  Rep.  13; 

2  Kenyon  v.  Association,  122  N.  Y.  Fitzpatrick  v.  Ins.  Co.,  56  Conn.  116. 
247;  25  N.  East.  Rep.  299;  Barteau  v.  insurance  Co.  v.  Hazelett.  105  Ind, 
Ins.  Co.,  67  N.  Y.  595;  Vose  v.  Ins.  312;  4  N.  East.  Rep.  582;  Newman  v. 
<  'ii..  0  Cush.  (Mass.)  42;  Smith  v. Ins.  Association,  76  Iowa  56;  Walsh  v. 
Co.,  24  Pa.  St.  820;  Galbraith'sAdm'r  Ins.  Co.,  30  Iowa  183;  McDonald 
v.  Ins.  Co.,  12  Hush  (Ky.)  29.  v.   Supreme  Council.  7s  Cal.   49;    20 

» Miller  v.  Ins.  Co.,  81  Iowa  816.  Pac.  Rep.  41;   Association  v.   Beck, 

1  Schwarzbachv.  Protective  Union,  77    Ind.    203;    Modem  Woodmen  v. 

25  W.Va.  622;  Watson  v.  Association,  Jameson,  48  Kan.  718;  80  Pac  Rep. 

21  Fed.   Rep,    698;   Hoffman   v.    Su-  460:  81  Pac.  Rep.   788;  4!)  Kan.  677; 

preme  Council,  35  Fed.  Rep.  252:  Ball  Daniher  v.  Grand  Lodge  (Utah).  87 

v.   Association,  (14  N.   H.   291;  9   Atl.  Pac.  Rep.  215. 

Rep.  103;  Warnebold  v.  Grand  Lodge,  6 Schwarzbachv.  Protective  Union, 

83  Iowa  2:::    is  x.   W.    Rep.    1071;  mpra;  Texas  Mutual  v.  Davidge,  51 

Humphreys    v.   Association.    189  Pa.  Texas.  244;  Matt  v.  Society,  70  Iowa 

St.  264;  20  Atl.  Rep.    1047:  Campbell  455. 

v.  Ins.  Co.,  98  Mass.  381;  Hartwell  v. 


5  60  ASSESSMENTS. 

notice  of  a  change  in  the  habits  of  the  assured,  which  by  the 
terms  of  the  policy  would  cause  a  forfeiture,  it  thereby  waives 
the  forfeiture.1  Where  it  was  known  to  the  society  that  the 
member  was  addicted  to  the  use  of  intoxicating  liquors,  and 
it  accepted  assessments  until  his  death,  it  can  not  set  up  the 
forfeiture.2  The  demand  and  receipt  of  assessments  by  a  so- 
ciety with  full  knowledge  of  the  facts  is  a  distinct  act  of  af- 
firmance of  the  contract  by  the  party  entitled  to  avoid  it,  and 
will  constitute  a  waiver  of  the  right  to  annul  it.3  Where  a 
society,  which  has  issued  a  certificate  conditioned  that  it  shall 
be  void,  if  the  beneficiary  is  not  a  "  natural  heir  "  of  the  mem- 
ber, continues  to  collect  assessments  after  knowledge  that  the 
beneficiary  named  is  not  related  to  the  member,  there  is  a 
waiver  of  the  condition.4  Where  the  society  retains  and  con- 
tinues to  collect  assessments  after  its  secretary  has  knowledge 
of  a  false  statement  in  the  application  as  to  the  age  of  the  mem- 
ber  insured,  it  waives  the  forfeiture  of  the  contract.5  But  when 
a  member  has  in  his  application  made  statements  as  to  his 
age,  and  his  local  lodge  has  instituted  inquiries  as  to  the  truth 
of  his  statements,  the  levy  and  collection  of  assessments  by  the 
secretary  of  the  society  in  ignorance  of  the  fact  that  the  state- 
ments were  untrue,  do  not  waive  the  forfeiture  of  the  contract 
on  account  of  the  false  statements.6  Where  a  member  of  a 
mutual  benefit  society  has  made  false  statements  as  to  his  age 
in  his  application  for  membership,  and  has  never  stated  his 
true  age,  the  fact  that  pending  an  investigation  of  the  matter 

1  Phoenix  Mutual  v.  Roddin,  120  U.  Wall.  404;  Ins.  Co.  v.  Stockbower,  26 
S.  183;  7  Sup.  Ct.  Rep.  500;  Lindsey  Pa.  St.  199;  North  Berwick  v.  N.  E. 
v.  Society,  84  Iowa  734;  50  N.  W.  Ins.  Co.,  52  Me.  336;  Viele  v.  Ger- 
Rep.  29.  mania  Ins.  Co.,  26  Iowa  9;    May  on 

2  Grand  Lodge  v.  Brand,  29  Neb.  Ins.,  section  507;  Cotten  v.  Ins.  Co., 
644;  46  N.  W.  Rep.  95.  41  Fed.  Rep.  506. 

3  Frost  v.  Saratoga  Ins.  Co.,  5  Denis  4  Lindsey  v.  Society,  84  Iowa  734; 
516;  Viall    v.  The    Genesee    Mutual,  50  N.  W.  Rep.  29. 

19  Barb.  440;  Gans  v.    St.    Paul  Ins.  5  Morrison  v.  Odd  Fellows,  59  Wis. 

Co.,  43  Wis.  108;    Masonic  Mutual  v.  162;    see    Mtna    Life    v.    Hanna,  81 

Beck,  77  Ind.  203;  Watson  v.  Centen-  Texas  487;  17  S.  W.  Rep.    35;  Cotten 

nial  Mutual,  21   Fed.    Rep.    698.     To  v.  Ins.  Co.,  41  Fed.  Rep.    506;  Miller 

same  effect  see  Commercial  Ins.  Co.  v.  Ins.  Co.,  31  Iowa  216;   Coolidge  v. 

v.    Spankneble,  52  111.  53;  Lycoming  Ins.  Co.,  1  Mo.  App.  109. 

Ins.    Co.    v.    Barringer,   73   111.    230;  6  Preuster  v.  Supreme  Council,  15 

Mtna,  Ins.  Co.  v.  Maguire,  51  111.  342;  N.  Y.  Supp.  41. 
Phoenix    Ins.    Co.    v.    Slaughter,  12 


ASSESSMENTS.  507 

by  the  society,  which  investigation  is  carried  on  with  reason- 
able diligence,  and  results  in  his  expulsion,  assessments  are 
levied  against  and  paid  by  him,  does  not  constitute  a  waiver  of 
the  right  to  expel  him  for  his  false  statements,  where,  up  to 
the  time  of  his  expulsion,  the  society  had  no  legal  proof  that 
his  age  had  been  falsely  stated.1 

In  an  action  on  a  certificate  of  membership,  the  society 
defended  on  the  grouud  that  the  deceased  member  had  stated 
in  his  application  that  he  was  fifty-nine  years  of  age,  when,  in 
fact,  he  was  sixty-four  years  of  age.  It  was  claimed  by  plaint- 
iff that  the  society,  by  its  treasurer,  had  received  of  plaintiff, 
after  her  husband's  death,  two  as3e33ments  against  him,  made 
just  before  he  died,  and  that,  at  that  time,  the  treasurer  and 
some  of  the  other  officers  had  information  of  his  true  age. 
Upon  these  facts,  it  was  contended  that  the  society  had  ratified 
the  contract,  or  was  estopped  from  setting  up  such  defense. 
The  court  said  :  "  We  think  this  ground  untenable.  There 
is  no  evidence  that  the  directors  had  knowledge  of  Swett's 
true  age,  prior  to  their  action  rejecting  the  plaintiff's  claim  in 

1  Preuster  v.  Supreme  Council.  135  80  Mich.  332;    Luthe  v.    Ins.  Co.,  55 

N.Y.  417;  32  N.  East.  Rep.  135;  affirm-  Wis.  543.     Evidence  of  age  of  mem- 

ing  15  N.   Y.  Supp.  41.     Statements  ber:  his  statements   made  some  time 

made  by  a  member  as  to  his  age.  before  or  some  time  after  the  issuing 

yEtna  Ins.  Co.  v.    France,   91   U.  S.  of  the  contract  are  not  admissible. 

510;  Linz  v.  Ins.  Co.,  8  Mo.  App.  3G3;  Valley   Mutual    v.    Teewalt,    79  Va. 

Alabama  Ins.  Co.  v.  Ins.  Co.,  81  Ala.  421;  Westropp  v.  Bruce,  Batty  (Irish 

329;  Swett  v.  Society,   78  Me.  541;  7  Rep.)  155.     It  is  improper  to  pen  nit  a 

Atl.  Rep.  394;  Gray  v.   Association,  witness  to  give  in   evidence  his  opin- 

111  Ind.  531;    11  N.   East.   Rep.  477;  ion  of  the  age  of  a   person    from  the 

Low  v.  Ins.  Co.,   6  Cin.  L.  Bull.  0(>(>;  appearance  of  the  Latter.    Valley  Mu- 

Southern  Lif e  v.   Wilkinson,   53  Ga.  tual  v.  Teewalt,   supra;  but   see  Ma- 

535:   Vivar   v.    Supreme    Lodge,    52  baney  v.  Association,  69  Hun   12;  22 

N.  J.  L.  455;  20  Atl.  Rep.  86;  Ball  v.  N.Y.   Supp.   213.    An   entry  in  the 

Association,  (It  N.    H.    291;    Hani'  v.  minute-hook  of  a  lodge  of  which  the 

Association,  70  Wis.   450;   45  N.  W.  deceased  was  a   member  made  prior 

Rep.  315;  Preuster  v.  Supreme  Coun-  to   the  issue   of  the  certificate  and 

oil.  185  X.  V.  417;    82   N.  East.  K<'|>.  showing    his    age   as   recorded    by 

135;  15  X.  Y.  Supp.  41;   Mahaney  v.  the  secretary  in   the   usual   manner 

Ass'n,  28  X.  Y.  Supp.  318;    McCoy  v.  of  keeping  its  records,  isnotadmis- 

Ins.  Co.,  152  Mass.    272;    25  X.  Bast  sible   a^   evidence   of     his   age;  it   is 

Rep.  289.     Member  beyond  the  age  mere    hearsay,     Conn.    Mutual    v. 

limited    in    the    charter    or    by-laws.  Scliwenk.  94  U,  S.  598;     see  McQuirk 

McCoy  v.  Ins.  Co.,  152  Mass.  272;  25  v.  Mutual  Benefit  Life,  20  X.  Y.  Supp. 

N.  East.  Rep.  289;    Morrison    v.  odd  908. 
Fellows,  59  Wis.  162;  Smith  v.  Pinch, 


568  ASSESSMENTS. 

July,  1S83.  ]STor  is  there  any  evidence  that  the  treasurer  or 
any  other  officer  of  the  corporation,  acquired  any  knowledge 
or  information  of  the  fact,  while  in  the  discharge  of  any 
official  duty.  But  assuming  that  the  treasurer  acquired  notice 
of  the  fact  when  he  received  the  assessments,  he  had  no  power 
to  ratify  the  invalid  contract.  He  could  not  admit  a  member, 
and  thereby  make  a  contract  of  insurance,  and,  if  he  had  no 
power  to  make  such  a  contract  for  the  corporation,  he  had  no 
power  to  validate  a  void  contract  by  any  ratification.1 

§  301.  The  act  of  the  financial  officer  of  a  subordinate 
lodge,  who  is  not  an  officer  of  the  supreme  lodge,  in  receiving 
past  due  assessments,  does  not  bind  the  society.  To  establish 
a  waiver  as  to  such  act,  knowledge  and  acquiescence  on  the 
part  of  the  managing  officers  of  the  supreme  or  central  body 
must  be  shown.2  The  unauthorized  acts  of  the  ministerial 
officers  of  a  subordinate  lodge  can  not  operate  to  dispense  with 
a  member's  duty  to  comply  with  the  laws  of  the  supreme 
lodge  in  regard  to  the  prompt  payment  of  assessments.  A 
benefit  society  is  not  estopped  from  enforcing  a  forfeiture  of 
a  policy  for  non-payment  of  an  assessment  by  the  fact  that 
one  of  its  sub-agents,  without  special  authority  for  the  act, 
accepted  payment  of  the  assessment  after  it  was  due.3  Where 
a  member  falsely  states  and  warrants  in  his  application  that 
the  appointed  beneficiary  is  his  niece,  the  society  is  not 
estopped  from  showing  that  this  statement  is  untrue  by  the 
fact  that  one  of  its  officers  who  witnessed  the  application,  but 
was  not  charged  with  the  duty  of  ascertaining  the  qualification 
of  a  beneficiary  named,  had  heard  before  that  time  that  the 
person  so  appointed  was  not  the  niece  of  the  member,  but  had 
no  personal  knowledge  on  the  subject,  and  testified  that  he 

1  Swett  v.  Society.  78  Me.  541;  7  Life  Ins.  Co..  2  Lansing  480;  Bou- 
Atl.  Rep.  394;  see  §  97.  ton  v.  American  Mutual,  25  Conn. 

2  Eaton  v.  Supreme  Lodge,  22  Cent.  542;  Ryan  v.  The  World  Mutual,  41 
Law  Jour.  560;  Painter  v.  Associa-  Conn.  168;  Catoir  v.  American  Life, 
tion,  14  Ins.  Law  Jour.  556.  33  N.  J.  L.  487;  Wall  v.  Home  Ins. 

3  Illinois  Mason's  Ben.  Soc.  v.  Bald-  Co.,  8  Bosw.  597;  Franklin  Life  v. 
win,  86  111.  479;  Borgraefe  v.  Su-  Sefton,  53  Ind.  380;  Wells  v.  Society, 
preme  Lodge,  K.  of  H.,  22  Mo.  App.  17  Ontario  317;  State  v.  Society.  4  2 
127;  Leonard  v.  The  Lebanon  Mu-  Mo.  App.  485;  Brown  v.  N.W.  Legion, 
tual,  3  Weekly  Notes  of  Cases  527;  81  Iowa  400;  Harvey  v.  Grand  Lodge, 
see    also    as    sustaining    this    prop-  50  Mo.  App.  472. 

osition,    Koelges    v.    The  Guardian 


ASSESSMENTS.  5G0 

did  not  recollect  having  paid  any  attention  to  the  statement 
in  the  application  that  she  was  the  niece  of  the  member.' 

When  a  certificate  has  become  void  through  non-payment 
of  an  assessment,  and  it  provides  that  agents  may  not  make, 
alter  or  discharge  contracts  or  waive  forfeitures,  or  receive 
assessments  in  arrears,  except  upon  a  written  application  in 
prescribed  form  for  a  revival,  which  must  be  acted  on  by  the 
society  itself,  and  when  there  is  no  evidence  that  the  agent 
actually  possessed,  or  ever  before  attempted  to  exercise  the 
power  to  waive  a  forfeiture  or  revive  a  lapsed  certificate,  it  is 
error  for  the  court  to  refuse  to  charge  the  jury  that  a  collect- 
ing agent  had  no  power  to  waive  the  forfeiture  or  to  bind  the 
society  by  receipt  of  the  assessments  in  arrear,  without  any 
application  for  revival,  and  for  the  court  to  charge  that  pay- 
ment by  the  member,  and  receipt  by  the  agent  of  the  assess- 
ments in  arrear  for  the  purpose  of  revival,  would  warrant  a 
recovery  on  the  lapsed  certificate.2 

Where  there  is  a  schism  in  a  mutual  benefit  society  and  a 
division  takes  place,  some  of  the  members  remaining  in  the 
original  society,  and  others  forming  another,  it  is  competent, 
unless  the  law  of  either  society  forbids  it,  for  a  person  to  be- 
long to  both  organizations.  If,  after  a  person  has  been  ad- 
mitted to  membership  in  both  societies,  one  of  them  passes  a 
resolution  making  it  a  forfeiture  of  membership  for  any  of  its 
members  to  continue  in  fellowship  with  the  other,  it  must  be 
shown  that  this  resolution  was  known  to  the  person  against 
whom  a  forfeiture  on  that  ground  is  claimed,  and  if  the  officers 
of  this  society  afterthe  passageof  the  resolution  have  received 
dues  and  assessments  from  him  with  notice  that  he  had  not 
severed  his  connection  with  the  other,  it  is  estopped  from 
insisting  on  his  failure  to  do  so  as  a  ground  of  forfeiture.3 

Where  a  contract  provides  that  if  assessments  are  not   paid 

■Supreme   Council   v.    Green,  71  to  local,  but  not  t<>  general  agents. 

Md.  263;  17  Atl.  Rep.  10-18.  The  latter  arc  presumed  t.>  possess 

'  Metropolitan  Ins.  Co.  v.  McGrath,  authority   to    transact    the    genera] 

52  N.  .!.   I-  858;    19  Atl.    Rep.  886;  business  of  the  company.     Eartford 

Catoir  v.  Trust  Co.,  88  X.  J.  L.  487;  Life  v.  Hayden,  90  Kv.  89;  18  s.  W. 

Lewis  v.  Ens.  Co.,  44  Conn.  72.    The  Rep.  585;   Carrigan  v.    Ins.  Co.,  58 

term  "agent"  in  a  contract   of  in-  Yt.  418;  Ins.  Co.  v.  Booker,  9  Heisk. 

surance    providing  that  agents  are  806;   Marcus    v.  Ins.  Co.,  68  N.  Y. 

not  authorized  to  vary  the  terms  of  625;  see  §277. 

the  certificate,  to  receive  dues,  or  to  'Warnebold   v.   Grand   Lodje 

accept  assessments  in  arrear,  applies  Iowa   28;   48  N.  W.   Rep.  1069;  dis- 


570  ASSESSMENTS. 

when  due,  and  within  the  lifetime  of  the  member,  and  that 
the  acceptance  of  any  assessment  after  maturity  shall  not  be  a 
waiver  of  prompt  payment  of  future  assessments,  the  accept- 
ance of  three  previous  assessments  after  maturity,  and  the 
promise  after  the  maturity  of  another  assessment  to  accept  it  if 
paid  before  a  certain  date  constitute  no  waiver  of  the  forfeit- 
ure incurred  by  the  failure  to  pay  at  maturity.  Where  the 
member  died  without  having  paid  the  last  mentioned  assess- 
ment, the  contract  was  held  to  be  void.1  A  by-law  providing 
that  if  a  member  is  in  arrears  when  taken  sick  he  shall  not  be 
entitled,  by  paying  such  arrearages,  to  benefits  during  such 
sickness,  is  not  waived  by  the  acceptance  of  arrearages  from  a 
member  after  he  has  taken  sick.2  If  the  society,  without  any 
inquiry  as  to  the  health  of  the  member,  accepted  past  due 
assessments  from  him  while  he  was  suffering  from  a  fatal  ill- 
ness, it  can  not  avoid  liability  on  the  contract  of  insurance  on 
the  ground  of  fraudulent  concealment  in  the  failure  of  the 
member  to  voluntarily  disclose  his  condition.3  Where  a  soci- 
ety receives  from  a  member  payment  of  an  assessment  while  a 
subsequent  assessment  is  past  due,  it  waives  the  right  to  claim 
a  forfeiture  on  the  ground  that  such  subsequent  assessment 
was  not  paid  within  the  time  stipulated  in  the  contract.4 

§  302.  Waiver  of  forfeiture — Assessments  retained  by 
the  society. — A  society  may  not  retain  the  assessment  paid 
before  the  death  of  a  member,  and  refuse  to  pay  the_  insurance 
to  the  beneficiary  of  the  certificate,  on  the  ground  that  it 
was  not  paid  within  the  time  stipulated  in  the  contract.5 
Where,  in  an  action  on  a  contract  of  insurance,  it  is  shown 
that  the  society  knew  for  eighteen  months  after  proof  of 
death  that  the  deceased  member  had  misrepresented  his  age 
in  his  application  for  membership,  but  had  never  at  any  time 
offered  to  rescind  or  cancel  the  contract  sued  on,  or  to  refund 

tinguishing  Bock  v.  A.  O.  U.  W.,  75  4De  Frece  v.    Ins.    Co.,    19  N.  Y. 

Iowa,  462;  39  N.  W.  Rep.  709.  Supp.    8;   see  Menard  v.  Society,  63 

*Lantz  v.  Ins.  Co.,  139  Pa.  St.  546;  Conn.  172;  27  Atl.  Rep.  1115. 

21    Atl.  Rep.  80;  Want   v.  BJunt,    12  5  Underwood   v.   Iowa    Legion  of 

East.  183;    Harvey  v.  Grand  Lodge,  Honor,  66  Iowa  134;  Shea  v.  Associa- 

50  Mo.  App.  472.  tion,  160  Mass.  289;  35  N.  East.  Rep. 

2  Nagel  v.  Glasburger,  10  N.  Y.  855;  Spitz  v.  Association,  25  N.  Y. 
Supp.  503.  Supp.  469. 

3  Spitz   v.    Association,    25    N.   Y. 
Supp.  469;  5  Misc.  Rep.  245. 


ASSESSMENTS.  571 

the  money  it  had  received,  it  will  be  held  to  have  ratified  and 
confirmed  the  contract,  and  is  estopped  from  asserting  the 
misrepresentation  as  a  defense  to  the  action.1  "Where  a  mem- 
ber of  a  mutual  benefit  society  fails  to  pay  his  assessments 
during  a  certain  year,  and  the  society,  not  discovering  such 
failure,  demands  and  receives  subsequent  assessments,  and 
retains  them  until  after  the  death  of  the  member,  it  will  be 
held  to  have  waived  the  forfeiture  for  non-payment,  and  is 
liable  for  the  amount  due  on  the  certificate.2  Assessments 
may  be  retained  by  the  society  in  such  a  manner,  and  under 
such  circumstances,  as  to  constitute  an  act  of  affirmance  of 
the  contract  of  insurance  after,  as  well  as  before,  the  death  of 
the  member  whose  life  was  insured.3  A  society  after  demand- 
ins:,  receiving  and  retaining  until  after  the  death  of  a  member 
the  amount  of  an  assessment  due  from  him,  can  not  claim  that 
the  money  was  demanded  and  received  by  mistake,  and  that 
the  certificate  is  forfeited/  The  right  to  a  certain  benefit 
fund  was  forfeited,  in  case  the  assured  at  his  death  had  not 
paid  all  assessments  against  him,  but  after  his  death  all  assess- 
ments against  him  were  paid  for  him  in  pursuance  of  authority 
granted  and  a  request  made  during  his  lifetime,  and  were  by 
his  local  lodge,  which  was  defendant's  agent  in  the  collection 
of  assessments,  received  and  forwarded  to  defendant,  and  by  it 
accepted  and  retained  until  after  commencement  of  a  suit 
for  the  benefit  fund.  These  assessments  were  accepted  and 
retained  with  knowledge,  on  the  part  of  both  the  local  lodge 
and  the  defendant  corporation,  of  the  death  of  the  assured, 
and  the  court  held  that  the  forfeiture  for  non-payment  in  the 
lifetime  of  the  assured  had  been  waived,  and  that  the  defend- 
ant corporation  was  liable.8  In  Jolitfe  v.  Madison  Mut.  Ins. 
Co.,"  it  was  held   that  an  acceptance  by  the  insurer  of  part 

1  Gray  v.  National  Ben.  Ass'n,  111  *  Bailey   v.  Association,    71     Iowa 

Lad.  531;  11  N.  E.  Rep.  477.  689;  27  N.  W.   Rep,  770;  Millard  v. 

Tui.ii.   v.   Society,   72  Iowa  361 ;  Supreme  Council,  81  Cal.  840;  22  Pac. 

33  N.  W.  Rep.   663;  Roswell  v.  Aid  Rep.864;  Menardv. Society, 6 iConn. 

Union,  18  Fed.  Rep.  840.  172;  21  Atl.  Rep.  1115. 

Masonic    Mutual  v.  Beck,  77  Ind.  6  Enlmann  v.  .Mut.  Ins.  Co.  of  Order 

203;  Joliffe  v.    Madison    Mutual.  89  of  Herman's  Sons,  II  Wis.  876. 

Wis.  Ill;  Grand   Lodgev.  Cotan,  20  6  39  Wis.  111. 
111.   App.   835;  Erdmann   v.    Mutual 
Ins.  Co.,  44  Wis.    376;  Gotten  v.  Ins. 
Co.,  41  Fed.  Rep.  506. 


572  ASSESSMENTS. 

of  the  premium  on  a  fire  insurance  policy,  with  knowledge 
that  the  property  had  been  destro}^ed,  was  a  waiver.  In 
the  opinion,  the  court  alludes  to  the  peculiar  terms  of  the  con- 
tract; but  the  waiver  is  put  distinctly  and  clearly  on  the  ground 
that,  as  the  company  had  accepted  the  cash  premium  after  the 
default  and  notice  of  loss,  this  operated  as  a  waiver  of  the 
suspension  clause  in  the  policy.  In  another  case  of  mutual 
fire  insurance,  it  was  held  that  where  a  society  imposes  a  for- 
feiture of  the  contract,  in  case  of  loss  while  its  assessment  is 
unpaid,  but  its  local  agent  receives  the  past  due  assessment 
with  knowledge  of  a  loss,  and  forwards  it  to  the  society  with- 
out notifying  its  officers  of  the  facts,  and  the  officers  receive 
the  assessment,  and  two  or  three  weeks  afterward  order  the 
loss  to  be  paid  when  adjusted,  they  can  not  afterward  refuse 
payment  on  the  ground  of  the  dela}r  in  paying  the  assessment, 
since  they  have  waived  that  by  receiving  it  when  overdue  and 
by  ordering  payment.1 

Whether  assessments  have  been  retained  an  unreasonable 
length  of  time,  and  under  such  circumstances  as  to  waive  a 
forfeiture,  is  a  question  for  the  jury  to  determine.  In  the 
absence  of  evidence  showing  that  an  administrator  of  a  deceased 
member  had  been  appointed  and  qualified  to  receive  payment 
of  assessments  paid  by  the  deceased,  and  that  the  society 
retained  such  assessments  for  an  unreasonable  time  after  such 
appointment  of  an  administrator,  and  after  learning  the  facts 
on  which  it  claims  the  policy  to  be  void,  the  forfeiture  is  not 
waived.2  The  forfeiture  of  a  contract  for  non-payment  of  an 
assessment  may  be  waived  by  the  subsequent  acceptance  of  it  ; 
but  where  the  society  within  a  reasonable  time  refuses  to 
accept  and  retain  the  amount  of  a  delinquent  assessment,  and 
returns  it  to  the  member  or  his  representative,  no  forfeiture  is 
waived.  A  certificate  of  membership  in  a  mutual  benefit  soci- 
etv  was  subject  to  a  by-law  providing  that,  if  any  assessment 
was  not  paid  within  thirty  days  after  notice,  it  should  be  for- 
feited. Several  assessments  were  permitted  to  remain  unpaid 
long  after  the  thirty  days,  and  on  the  day  of  the  member's 
death,  the  person  to  whom  the  notices  of  assessments  had  been 
sent  called  on  the  local  agent  of  the  society,  and  offered  to  pay 

'Farmers'  Mutual  v.  Bowen,  40  ■  Matt  v.  Society,  70  Iowa  455;  30 
Mich.  147.  N.  W.  Rep.  799. 


ASSESSMENTS.  573 

the  amount  of  such  assessments.  The  agent,  who  had  no 
authority  to  make  arrangements  in  regard  to  the  standing  of 
members  agreed  to  accept  the  money  and  forward  it  to  the  so- 
ciety, whose  office  was  twenty-eight  miles  distant,  subject  to  its 
action  in  the  matter.  In  his  report  he  said  :  "  If  money  is  not 
received,  must  be  refunded."  About  ten  days  afterward,  the 
society  gave  notice  through  the  agent  that  the  payment  would 
not  be  accepted,  and  offered  to  return  the  money.  It  was  held 
that  the  court  did  not  err  in  leaving  it  to  the  jury  to  say 
whether  the  delay  in  refusing  the  money  amounted  to  a  waiver 
of  the  forfeiture.1  Where  a  member  failed  to  meet  the  assess- 
ments made  upon  him,  but  subsequently  transmitted  to  the 
secretary  an  amount  of  money  in  payment  of  all  dues  which 
had  been  demanded  of  him,  which  sum  the  society  retained  for 
four  months  and  until  after  his  death,  without  notifying  him 
whether  the  payment  was  satisfactory  or  not,  such  retention 
of  the  amount  by  the  society  was  a  waiver  of  the  default,  and 
restored  him  to  membership.2  The  grand  lodge  of  a  mutual 
benefit  association,  by  accepting  and  retaining  the  dues  of  an 
applicant  for  a  beneficiary  certificate,  with  knowledge  of  the 
facts,  waives  all  irregularities  in  the  organization  of  the  subor- 
dinate lodge  and  in  the  admission  of  the  applicant  to  its  mem- 
bership.3 

§  303.  Waiver  of  forfeiture — Conditional  acceptance  of 
past-due  assessments. — When  a  contract  of  insurance  has 
been  forfeited  for  non-payment  of  an  assessment,  it  is  at  an 
end,  and  unless  its  provisions  confer  upon  the  member  some 
right  to  revive  it,  it  can  only  be  revived  by  some  act  of  the 
society.  The  society  may  be  willing  to  revive  it  only  on  cer- 
tain conditions,  and  since  such  conditions  are  the  terms  of  a 
new  contract,  they  may  be  accepted  or  refused  by  the  member. 
If  they  are  accepted  by  him,  he  is,  of  course,  bound  by  them. 
The  receipt  of  a  past-due  assessment  on  the  written  condition 
that  the  member  is  of  temperate  habits,  and  in  as  good  health 
as  when  the  certificate  was  issued,  otherwise  the  payment, 
receipt,  and  certificate  to  be  void,  is  of  no  effect  against  the 

1  United  Brethren  v.  Schwartz,  120  3  Perine  v.  Grand  Lodge,  48  Minn. 
Pa.  St.  (not  reported);  13  Atl.  Rep.  82:  50  N.  W.  Rep.  1022;  8.  C,  53  N. 
769;  12  Cent.  Rep.  728.  W.  Rep.  367. 

9  Georgia  Masonic  Mutual  v.  Gib- 
son, 52  Ga.  640. 


574  ASSESSMENTS. 

society,  if  lie  is  not  of  temperate  habits  and  is  not  in  such  a 
state  of  health.1  A  receipt  given  for  the  payment  of  an  as- 
sessment which  is  past  due  will  naturally  express  the  terms  of 
the  waiver,  or  the  conditions  of  reinstatement,  or  whatever 
else  is  essential  to  give  renewed  life  to  the  old,  or  to  create  a 
new  contract,  and  a  delinquent,  whose  past-due  assessment  is 
accepted  as  a  matter  of  favor,  is  bound  by  the  terms  of  such  a 
receipt,  whether  he  reads  it  or  not.2  A  member  of  a  society 
forfeited  his  certificate  by  failing  to  pay  an  assessment  due 
December  7,  1882,  when  the  secretary  of  the  society  wrote 
him,  in  substance,  that  if  he  would  send  in  the  assessment  im- 
mediately, he  would  send  a  receipt  without  default.  The  as- 
sessment was  not  then  paid,  but  on  the  25th  of  that  month 
the  member  was  taken  sick,  and  on  the  31st  of  the  month  he 
died.  On  the  30th,  however,  at  his  request,  his  wife,  who 
was  the  beneficiary  of  his  certificate,  remitted  the  mone}r, 
and  it  was  received,  at  the  office  of  the  society,  January  1st. 
A  receipt  for  the  assessment  was  returned  in  printed  form, 
containing  the  provision  .that  it  should  be  valid  only  on  con- 
dition that  the  assured  should  be  alive  and  in  good  health, 
on  the  day  of  its  date;  but  there  was  written,  in  the  hand- 
writing of  the  secretary,  on  the  margin  of  the  receipt  the 
words  "  no  default."  After  the  society  was  informed  of  the 
death  of  the  assured,  it  returned  the  money  to  the  widow.  It 
was  held,  upon  these  facts,  that  because  the  remittance  was 
not  made  immediately  upon  receipt  of  the  letter  of  December 
Tth,  the  offer  therein  contained  to  waive  the  default,  was  at  an 
end;  that,  since  the  assured  was  not  alive  at  the  date  of  the 
receipt,  it  was  invalid  by  its  own  terms.  The  written  words 
"  no  default,"  not  being  repugnant  to  the  printed  conditions 
of  the  receipt,  must  be  construed  in  connection  with  such 
conditions;  and  the  true  meaning  is  that  there  should  be  no 
default  provided  the  assured  was  alive  and  in  good  health  at 
the  time  of  its  date.3  It  has  been  held  that  the  provision 
that  the  insured  is  in  good  health  does  not  apply  to  his  actual 
state,  but  to  his  supposed  condition.  Where  an  insured  had 
sustained  an  injury  just  before  the  society  received  a  payment 

1  Ronald  v.  Association,  132  N.  Y.  2  Ronald  v.  Association,  siqjra. 

378;  30  N.  East.  Rep.   739;   affirming  3  Servoss  v.  Society,  67  Iowa,  86; 

7  N.  Y.  Supp.  152  and  10  N.  Y.  Supp.  TJnsell  v.  Ins.  Co.,  32  Fed.  Rep.  443. 
632. 


ASSESSMENTS.  0«0 

on  condition  that  he  was  in  good  health,  but  no  danger  was 
anticipated  by  him,  his  medical  attendant  or  the  agent  of  the 
society,  the  subsequent  fatal  termination  of  the  injury  did  not 
avoid  the  payment.1  But  in  another  case  it  was  held  that 
where  a  certificate,  conditioned  to  be  void  on  non-payment  of 
dues,  provides  that  the  assured  may  be  reinstated  on  payment 
of  delinquent  dues  and  "satisfactory  evidence  of  good  health,"' 
the  taking  of  delinquent  dues  by  the  insurer  from  an  agent  of 
the  assured,  on  the  day  before  the  assured's  death  of  fatty  de- 
generation of  the  heart,  and  the  giving  of  a  receipt,  providing 
that  the  payment  and  receipt  shall  be  void  unless  the  assured 
is  in  as  good  health  as  when  originally  received  asa  member,  do 
not  constitute  a  waiver  of  the  breach  of  the  contract,  since 
no  "  satisfactory  evidence  of  good  health  "  could,  under  the 
circumstances,  be  furnished.2  The  receipt  of  dues  from  a 
member  of  a  mutual  benefit  association  after  the  expiration 
of  the  time  limited  for  their  payment,  and  the  sending  of  a 
letter  to  him  informing  him  that  the  association  has  reinstated 
him  provided  he  was  in  usual  good  health  when  the  dues  were 
paid,  do  not  amount  to  a  waiver  of  a  forfeiture  of  the  policy, 
where  the  insured  was  in  fact  fatally  ill  at  the  time  of  pay- 
ment.* 

The  reinstatement  of  a  delinquent  member  by  the  receipt  of 
his  back  dues  on  condition  that  he  "is  now  and  has  been  dur- 
ing the  past  twelve  months  in  continuous  good  health,  and 
free  from  all  disease,  infirmity,  or  weakness"  is  not  vitiated 
and  void  by  reason  of  the  fact  that  he  had  had  during  the  pre- 
ceding twelve  months,  a  slight  illness  of  a  temporary  nature 
which  did  not  indicate  a  vice  in  his  constitution,  and  from 
which  lie  had  fully  recovered  at  the  time  of  the  receipt  of  his 
dues.  In  order  to  make  such  a  conditional  reinstatement  in- 
effectual, the  illness  must  have  been  such  that  he  would  not 
have  been  received  if  he  had  been  an  original  applicant  for 
insurance.4  After  a  member  of  a  mutual  benefit  association 
had  forfeited  her  membership  by  failure  to  pay  an  as 
ment  within  the  time  required  l»y  the  certificate,  the  assess- 

1  Campbell  v.  Ins.  Co.,  24  Up.  Can.        'French  v.   Association,  111  N.  C. 
C.  P.  L83.  391:  16  8.  E.   Rep.  427;  BfacRae,  J., 

5  Ronald  v.  Association,  supra,  dissenting. 

3  Garbutt  v.  Association,  84  Iowa 
293;  51  N.  W.  Kep.  148. 


576  ASSESSMENTS. 

ment  was  paid,  and  a  receipt  given  therefor,  which  recited 
that  the  payment  was  made  and  received  and  the  receipt 
given  by  the  association,  and  received  by  the  member,  on  con- 
dition that  such  member  "  is  now  in  good  health,  and  free 
from  all  diseases,  infirmities,  or  weaknesses."  It  appeared 
that  the  member's  health  had  begun  to  be  affected  about 
a  year  before  the  forfeiture  by  the  natural  decline  of  age,  which 
resulted  in  her  death  soon  after  the  receipt  was  given,  but 
that  she  was  subject  to  no  disease,  and  that  her  only  infirmi- 
ties were  those  natural  to  old  age.  It  was  held  that  the  evi- 
dence failed  to  show  that  the  condition  of  the  receipt  was  not 
fulfilled.1 

§  304.  The  assured  sent  a  draft  for  the  amount  of  the 
premium  after  it  was  due.  The  company  collected  the  draft, 
and  wrote  to  the  assured  :  "  As  this  is  past  due,  it  will  accord 
with  our  rules  for  you  to  send  us  a  certificate  of  good  health, 
and  in  your  case  we  will  be  satisfied  with  your  own.  You 
did  not  write  me  where  to  send  the  renewal  receipt,  and  so  I 
have  not  inclosed  it.1'  It  was  held  that  it  was  not  clear  that 
the  assured  did  understand  or  could  have  understood  that  his 
money  was  received  only  on  condition  of  his  furnishing  the 
certificate;  that  it  was  error  to  non-suit  the  plaintiff,  and  that 
the  facts  should  have  been  submitted  to  a  jury,  so  that  they 
mio-lit  determine  whether  there  had  been  a  waiver  of  the  for- 
feiture.'2  A  society  may  hj  its  subsequent  acts  waive  the  con- 
ditions upon  which  it  received  a  past  due  assessment.  When  a 
society  may  declare  the  contract  forfeited  for  non-payment  of 
an  assessment,  but,  instead  of  taking  this  course,  accepts  pay- 
ment of  it  on  condition  that  the  member  is  in  good  health,  it 
may  not  retain  the  money,  levy  other  and  subsequent  assess- 
ments and  still  insist  upon  the  forfeiture,  unless  fraud  was 
practiced  by  the  member  in  concealing  the  state  of  his  health 
at  the  time  of  making  the  payment.3 

Where  payment  of  an  assessment   was   accepted   by  the 

1  Griesa  v.  Association,  133  N.  Y.        3  Sty  low  v.  Odd  Fellows'  Mutual, 

619;  30  N.  East.  Rep.  1146;  'affirm-  69  Wis.  224;  34  N.  W.  Eep.  151;  Erd- 

ing  15  N.  Y.  Supp.  71;  see  Lindsey  mann  v.  Ins.  Co.,  44  Wis.  376;  Ken- 

v.  Society,  84  Iowa  734.  yon  v.  Knights  Templar,  122  N.  Y. 

'2  Rockwell  v.    Ins.    Co.,  20    Wis.  247;  25  N.  East.  Rep.  299;  Bucklee  v. 

335;  S.  C,  21  Wis.  548;  S.  C,  27  Wis.  Ins.  Co.,  18  Barb.  (N.  Y.) 541;  Mutual 

372.  Benefit  v.  Coats,  48  111.  App.  185. 


ASSESSMENTS.  577 

society  after  the  time  for  making  such  payment  had  expired, 
and  a  receipt  was  given  therefor,  stamped  across  its  face  with 
the  words  "  Received  on  condition  that  member  is  in  good 
health."  but  nothing  was  said  by  the  member  as  to  his  health 
after  he  had  received  the  receipt,  and  no  inquiries  relative  to 
the  condition  of  his  health  were  made  then  or  subsequently  by 
the  society,  the  subsequent  levy  and  unconditional  acceptance 
by  the  society  of  assessments  on  the  member  operated  as  a 
waiver  of  the  forfeiture,  although  the  member  was,  at  the  time 
of  the  conditional  acceptance,  in  ill  health.  In  deciding  this 
question,  the  court  said  :  "  Without  expressing  an}7  opinion  as 
to  the  effect  of  the  retention  of  that  money  (the  assessment 
which  was  paid  after  it  was  due),  we  think  the  levy  of  the  sub- 
sequent assessments,  and  the  acceptance  of  the  money  paid 
upon  them,  amounted  to  such  a  waiver.  When  the  time  came 
for  the  levy  of  a  new  assessment,  if  Mr.  Rice's  policy  was  to 
be  treated  as  still  in  force,  he  would  properly  be  included  in 
the  assessment;  otherwise  not.  Under  this  state  of  things, 
six  other  assessments  upon  him  were  made  by  the  company; 
all  of  which  were  seasonably  paid.  There  was  no  determina- 
tion by  the  directors  of  the  company  that,  for  the  time  being, 
Mr.  Rice's  policy  should  be  treated  as  not  in  force  or  suspended, 
but  in  making  new  assessments,  so  far  as  appears,  no  pains 
were  taken,  and  no  intention  was  formed,  to  exclude  him.  No 
condition  was  in  express  terms  annexed  to  the  levy  of  these 
new  assessments,  or  to  the  acceptance  of  the  payments  of  the 
assured  upon  them.  The  company,  however,  contends  that 
the  condition  of  the  former  acceptance  reaches  forward,  mid 
applies  also  to  the  later  payments;  and  that  it  is  not  bound  by 
later  assessments  which  it  made  and  later  payments  which  it 
received  in  ignorance  that  the  assured  was  in  ill  health  at  the 
time  of  the  former  payment.  But  it  can  not  be  allowed  in 
this  way  to  imply  a  condition  in  favor  of  a  forfeiture.  It  had 
knowledge  that  on  the  former  occasion  the  paymenl  had  been 
made  too  late,  and  that  the  money  had  been  accepted  with  a 
condition  annexed.  If,  before  levying  a  new  assessment,  the 
company  wished  to  know  the  particulars  as  to  Mr.  Rice's 
health,  and  thus  to  determine  whether  that  payment  was  valid 
or  not,  it  was  incumbent  on  it  to  make  inquiry,  instead  of 
doing  so;  instead  of  notifying  him  that  it  wished  for  some 
37 


578  ASSESSMENTS. 

positive  evidence  or  statement  upon  the  subject;  instead  of 
imposing  a  further  condition,  relating  back  to  the  time  of  the 
former  payment,  the  company  made  an  unconditional  call  upon 
him  for  the  payment  of  the  new  assessment.  It  acted  under 
no  deception  or  misrepresentation,  but  with  all  the  information 
which  it  cared  to'take  the  pains  to  acquire.  "We  are  unable  to 
see  how  it  can  properly  be  held  that  the  former  conditional 
acceptance  cuts  down  the  effect  of  the  later  unconditional 
acceptance.  The  condition  related  to  the  former  payment 
alone.  Suppose  the  payment  of  the  former  assessment  had 
never  been  made  at  all;  and  the  company,  without  insisting 
upon  the  non-payment  as  a  ground  of  forfeiture,  had  levied 
new  assessments  upon  the  assured,  which  were  all  duly  paid 
and  accepted  without  condition;  could  it  be  contended  that 
there  was  no  waiver?  An  unconditional  acceptance  of  an 
assessment  waives  all  the  former  known  grounds  of  forfeiture; 
and  this  effect  is  not  varied  or  limited  because  an  acceptance 
of  a  former  assessment  had  been  on  condition,  and  had  not 
amounted  to  such  a  waiver."  ' 

A  member  failed  to  pay  an  assessment  within  the  time 
required  b}r  her  certificate,  and  by  its  terms  it  became  void. 
It  provided,  however,  that  she  might  be  reinstated  by  the  offi- 
cers of  the  society  for  reasons  satisfactory  to  them  and  on 
such  conditions  as  they  might  impose.  A  few  days  after  the 
expiration  of  the  time  limited  the  member  paid  the  assessment 
and  received  a  receipt  which  declared  that  the  payment  was 
received  on  condition  that  she  was  at  the  time  "  in  good  health 
and  free  from  ail  diseases,  infirmities  and  weaknesses,"  and 
stipulated  that  no  subsequent  payment  to  the  society  of  assess- 
ments on  the  certificate  should  "  impair,  waive,  alter  or  change 
any  of  the  conditions  of  this  receipt  or  of  said  certificate." 
Notices  of  subsequent  assessments  were  given,  which  stipu- 
lated that  no  condition  on  which  any  previous  payment.had  been 

1  Rice  v.  Society,  146  Mass.  248;  15  well  v.  Ins.  Co.,  27  Wis.  872;  see  Lyon 

N.  East.  Rep.  624;  5  N.  Eng.  Rep.  813;  v.  Supreme  Assembly,  153  Mass.  83, 

citing    upon    the   last    proposition,  26  N.  East.   Rep.  236,  which  is  dis- 

Hodgdon  v.  Ins.  Co.,  97  Mass.   144;  tinguished  from  the  Rice  case;  see 

Bouton  v.  Ins.  Co.,  25  Conn.  542;  Ins.  Conway  v.  Ins.  Co.,  140  N.  Y.  79;  35 

Co.    v.    Raddin,  120  U.  S.  183;    see  N.  East.  Rep.  420;  Mutual  Beneht  v. 

also  Stylow  v.  Odd  Fellows,  etc.,  69  Coats,  48  111.  App.  185. 
Wis.  224;  34  N.  W.  Rep.  151;  Rock- 


ASSESSMENTS.  579 

received  should  be  waived  by  accepting  payment  of  these 
assessments.  They  were  paid  from  time  to  time,  and  after- 
ward a  notice  of  an  annual  assessment  for  expenses  was  sent 
to  her,  which  provided  that  "  the  sending  of  this  notice  shall 
not  be  held  to  waive  any  forfeiture  or  lapse  of  membership,  if 
previous  assessments  remain  unpaid."  It  was  held  that  even 
if  the  condition  of  the  first  receipt  was  not  fulfilled,  the  sub- 
sequent dealings  between  the  parties  showed  a  waiver  of  the 
forfeiture  for  non-payment  of  the  assessment  within  the  re- 
quired time.  It  appeared  in  this  case  that  about  a  year  before 
the  forfeiture  the  member's  health  began  to  be  affected  by  the 
infirmities  of  old  age,  that  she  died  from  such  infirmities,  and 
was  subject  to  no  disease.  The  court  held  that  the  evidence 
failed  to  show  that  she  was  not  "  in  good  health  and  free  from 
all  diseases,  infirmities  or  weaknesses."  *  Where  money  for 
payment  of  an  assessment  is  retained  by  the  society,  and  a 
receipt  therefor  is  mailed,  stating  a  condition  on  which  it  is 
accepted,  the  society  must,  in  the  absence  of  any  stipulation 
for  such  communication  through  the  mail,  show  that  it  was 
received  by  the  member;  otherwise  the  fact  that  the  money 
was  received  after  the  time  fixed  for  payment  will  be  held  to 
have  been  waived.2 

Where  the  defense  in  an  action  on  a  contract  of  insurance 
is  that  it  had  lapsed  for  non-payment  of  an  assessment,  and  that 
the  member  had  procured  it  to  be  reinstated  by  representations 
as  to  his  health,  which  were  not  guranteed  to  be  true,  but 
which  he  knew  at  the  time  to  be  false,  defendant  must  prove 
that  the  member  knew  them  to  be  false.3  A  suspended 
member  paid  his  delinquent  assessments;  and  in  his  applica- 
tion for  reinstatement  stated  that  he  was  then  in  good  health 
and  that  "if  this  statement  be  found  to  be  in  any  respect  un- 
true, the  policy  shall  be  treated  in  the  same  manner  as  if  the 
assessment  had  not  been  accepted."  It  was  held  that  this  con- 
dition was  unqualified,  and  that  the  beneficiary  could  not 
recover  if  the  statera  $nt  was  imtrus  in  fact,  even  though 
honestly  made.4     Aiter  a  member  had  made  default  in  the 

1  Griesa  v.   Association,   IS   N.  Y.       'Patten  v.    Association,   70    Hun 
Snpp.  71 :  affirmed,  133  N.  Y.  619;  30   200;  24  N.  Y.  Supp.  269. 

N.  East.  Rep.  1146.  4  Richards  v.    Association,    85  Me. 

2  Sheav.  Association,  160  Mass.  289;    99;  26  Atl.  Rep.  1050. 
35  N.  East.  Rep.  855. 


580  ASSESSMENTS. 

payment  of  an  assessment,  the  amount  thereof  was  handed  to 
the  treasurer  of  the  society.  He  gave  no  receipt,  but  said  he 
would  take  the  money  to  the  next  meeting  and  ask  to  have  the 
member  reinstated,  and  that  he  would  mail  a  receipt  on  his 
reinstatement.  The  member  died  before  the  next  meeting,  and 
the  money  was  returned.  It  was  held  that  there  was  no 
waiver  of  the  forfeiture  for  non-payment.' 

§  305.,  Waiver  of  forfeiture— The  levy  of  an  assessment 
on  a  delinquent  member. — While  it  is  proper  for  a  society  to 
provide  in  its  contract  that  a  failure  to  pay  an  assessment 
within  a  oiven  time  after  notice  shall  work  a  forfeiture  of  all 
claims  against  it  under  that  contract,  yet  a  forfeiture  of  this 
character  is  a  matter  of  strict  legal  right.  It  may  be  waived, 
and,  if  waived,  can  not  again  be  asserted.  In  fact,  in  order  to 
assert  it,  the  society  must  abide  inflexibly  by  the  terms  of  its  con- 
tract.2 It  follows  that  conduct  on  the  part  of  the  society  incon- 
sistent with  an  intention  to  abide  by  the  strict  terms  of  the  con- 
tract and  to  insist  upon  a  forfeiture,  if  not  amounting  to,  is  at 
least  evidence  of  a  waiver  of  the  forfeiture.  The  levy  of  an 
assessment,  notifying  the  delinquent  member  to  pay  it  within  a 
certain  time,  receiving  payment  of  it  from  him,  and  retaining  the 
money  paid  are  all  acts  inconsistent  with  an  intention  to  stand 
by  the  terms  of  the  contract  and  assert  the  forfeiture,  and 
end  to  show  a  waiver.3  It  may  be  laid  down  as  the  general 
rule  that  every  time  a  society  levies  an  assessment  on  a  mem- 
ber who  has  failed  to  pay  a  previous  assessment  within  the 
time  prescribed  by  its  laws,  it  waives  the  forfeiture  of  the  con- 
tract for  such  failure  to  pay,  and  acknowledges  that,  notwith- 
standing the  non-payment,  he  is  one  of  its  members.4     The 

1  McGowan  v.  Supreme  Council,  28  Knights  Templar,  122  N.  Y.  247;  25 
N.  Y.  Supp.  177.  N.  East.  Rep.  299;  Stylow  v.  Ins.  Co., 

2  Metropolitan  Ass'n  v.  Windover,  69  Wis.  224;  34  N.  W.  Rep.  151;  El- 
137  111.  417;  27  N.  East.  Rep.  538;  mer  v.  Association,  19  N.  Y.  Supp. 
Johnson  v.  Ins.  Co.,  79  Ky.  403;  Mur-  289. 

ray  v.  Association,  90  Cal.  402.  4 Modern    Woodmen  v.    Jameson, 

3  Metropolitan  Ass'n  v.  Windover,  48  Kans.  718;  S.  C,  49  Kans.  677;  30 
supra;  Tobinv.  Society,  72  Iowa  261;  Pac.  Rep.  460;  31  Pac.  Rep.  733;  Sty- 
33  N.  W.  Rep.  663;  Roswell  v.  Aid  low  v.  Ins. 'Co.,  supra;  Jackson  v. 
Union,  13  Fed.  Rep.  840;  Rice  v.  So-  Association,  78  Wis.  463;  47  N.  W. 
ciety,  146  Mass.  248;  15  N.  East.  Rep.  Rep.  733;  National  Mutual  v.  Jones, 
624;  5  New  Eng.  Rep.  813;  Erdmann  84  Ky.  110;  Farmers!  Union  v.  Wil- 
v.  Ins.  Co.,  44  Wis.  376;    Kenyon  v.  der,  35  Neb.  572;   Shay  v.  Society,  7 


ASSESSMENTS.  5S1 

society  has  a  right  to  declare  the  contract  forfeited  if  the 
assessment  is  not  paid  within  the  stipulated  time,  but  this  for- 
feiture is  for  the  benefit  of  the  association,  and  the  levy  of  an 
assessment  upon  a  delinquent  member  is  a  clear  recognition  of 
the  validity  of  the  contract,  and  an  acknowledgment  of  his 
rights  as  a  member. 

Where  a  contract  provides  that  a  failure  to  pay  an  assess- 
ment shall  cause  it  to  lapse,  and  that  the  society  reserves  the 
right  to  cancel  the  contract,  a  default  in  payment  will  be 
waived,  where  the  society  does  not  declare  a  forfeiture,  but 
continues  to  levy  assessments.1  A  member  of  a  society  paid 
several  assessments  about  a  month  after  they  were  due,  and 
paid  the  last  assessment  about  two  months  after  it  was  due. 
This  last  payment  was  made  at  its  home  office,  when  he  was 
informed  by  the  general  manager  that  he  was  delinquent  in 
another  assessment,  and  that  still  another  assessment  would 
fall  due  on  the  following  day.  Xo  forfeiture  of  his  rights 
was  suggested.  It  appeared  that  the  notices  of  assessment 
stated  that  agents  were  not  authorized  to  extend  the  time  of 
payment  of  assessments,  and  that  any  delay  beyond  the  stipu- 
lated time  would  be  at  the  risk  of  the  member.  The  member 
died  about  twenty  days  after  his  last  payment,  leaving  two 
assessments  unpaid,  and  the  certificate  remained  uncanceled. 
Under  these  circumstances  it  was  for  the  jury  to  say  whether 
there  had  not  been  a  waiver  of  the  forfeiture.2  On  the  trial 
of  the  case  just  cited  the  society  offered  to  prove  by  its  secre- 
tary and  principal  manager  that  he  told  the  member  on  one 
occasion  that  some  of  his  assessments  were  overdue,  that  he 
thereby  lost  his  right  to  his  certificate,  and  that  he  was  delay- 
ing payment  at  his  own  risk  and  peril.  This  testimony  was 
excluded,  and,  in  reviewing  this  action  of  the  court  below  the 
supreme  court  said:  "We  are  unable  to  perceive  the  ma- 
teriality of  this  evidence.     The  court  admitted  in  evidence  no- 

N.  Y.  Supp.  287;  Wrighl  v.  Supreme  Koontz  (Ind.  App.),  30  N.  East.  Rep. 

Commandery,  87  Ga.  426;    13  S.  E.  1 15. 

Rep.   564;    Sweetser   v.    Association,  'Farmers'    Union    v.    Wilder,    35 

117  Ind.  97;    19  N.    East.    Rep.  722;  Neb.  572;  58N.  W.  Rep.  587. 

Bankers'   Association    v.    Stapp,    77  -  Sweetser  v.  Association,  117  Ind. 

Texas 517;  14 S.  W.  Rep.  168;  Millard  97;  lit  X.  Bast.  Rep.  722;  aee  Bankers' 

v.  Supreme  Council,   si   c;,l.  :;|n:  22  Ass'n   v.  Stapp,   77  Texas,  517;  14  S. 

Pac.    Rep.  864;    Farmers'  Mutual  v.  W.  Rep.  168. 


5S2  ASSESSMENTS. 

tices  of  assessments  received  by  the  insured,  upon  every  one  of 
which  was  printed  substantially  the  same  information,  only  in 
more  emphatic  terms.  Insurance  companies  can  not,  how- 
ever, cither  by  printed  notices  or  by  verbal  communications, 
continue  their  right  to  insist  upon  forfeiting  a  contract  for 
non-payment  of  assessments,  and  at  the  same  time  habitually 
accept  overdue  assessments  whenever  tendered.  After  a  for- 
feiture has  occurred,  a  new  assessment  against  the  member, 
and  an  acceptance  of  the  overdue  assessment,  inevitably 
waives  the  previous  forfeiture,  notwithstanding  the  notice 
that  non-payment  will  be  at  the  risk  of  the  member.  It  was 
therefore  wholly  immaterial  what  the  secretary  may  have 
told  the  insured  concerning  his  delinquency  and  its  effect  upon 
his  certificate,  provided  the  course  of  dealings  of  the  associa- 
tion, and  the  acts  and  declarations  of  its  agents,  were  such  as 
to  induce  him  to  believe  that  the  time  for  payment  would  be 
extended  as  theretofore."  ' 

§  306.  But  the  levy  of  an  assessment  on  a  delinquent  mem- 
ber may  be  made  under  such  circumstances  as  to  rebut  the 
inference  that  by  such  levy  it  acknowledges  him  to  be  an  exist- 
ing member.  A  waiver  of  a  right  presupposes  a  knowledge 
of  the  right  waived,  and  is  not  to  be  inferred  from  a  merely 
negligent  act,  or  from  one  done  under  a  misapprehension  of 
the  real  condition  of  the  rights  of  the  parties  at  the  time.2  A 
waiver  never  takes  place  unless  it  is  intended  or  unless  the  act 
relied  on  ought  in  equity  to  estop  the  party  from  denying  that 
he  intended  it  to  be  a  waiver  of  the  condition  precedent. 
After  a  society  had  declared  a  contract  forfeited  for  a  viola- 
tion of  its  by-laws,  and  after  it  had  notified  the  member  of 
this  fact,  it  passed  a  resolution  directing  that  an  assessment  be 
levied  on  all  contracts  "in  force  at  this  date,"  and  the  treasurer 
assessed  the  forfeited  contract  by  mistake.  The  member  paid 
the  assessment  and  claimed  a  waiver  of  the  forfeiture,  but  the 
court  held  that  there  had  been  no  waiver.3  A  certificate  pro- 
vided that  a  failure  to  pay  an  assessment  within  forty  days 
after  notice  of  the  death  of  a  member,  should  work  a  forfeit- 

1  See  Painter  v.  Association,  131  102;  Robertson  v.  Metropolitan  Ins. 
Ind.   68;  30  N.   East.  Eep.  876;  Mil-   Co.,  88  N.  Y.  54. 

lard  v.  Supreme  Council,  81  Cal.  340;  3  Diehl  v.  Mutual  Ins.  Co.,  58  Pa. 
22  Pac.  Rep.  864.  St.  443;  see  Leonard  v.  Lebanon  Mu- 

2  Miller  v.  Union  Central,  110  111.    tual,  3  Weekly  Notes  of  Cases  527. 


ASSESSMENTS.  583 

ure,  and  a  rule  of  the  society  provided  that  a  member  whose 
policy  had  lapsed  might  be  reinstated  upon  presenting  a  cer- 
tificate of  good  health  and  paying  all  unpaid  assessments. 
Notices  of  the  death  of  four  members  and  the  consequent  as- 
sessments Avere  sent  at  intervals  to  the  member,  but  he  paid 
nothing  upon  them.  Afterward,  when  on  his  death-bed,  a 
fifth  notice  of  assessment  was  sent  to  him,  and  his  brother-in- 
law,  not  knowing  that  the  other  assessments  were  unpaid,  sent 
the  money  to  pay  this  one.  The  secretary  held  the  money, 
and  wrote  inquiring  about  the  unpaid  assessments.  When  this 
letter  was  written  the  member  was  dead,  and  when  the  society 
learned  of  his  death  it  tendered  the  money  to  his  personal 
representative.  In  deciding  that  there  had  been  no  waiver  of 
the  forfeiture  the  court  said  :  u  Were  the  assessment  notices  in 
themselves  sufficient  evidence  of  a  waiver  ?  In  considering  this 
question  regard  must  be  had  to  the  resolution  of  the  company 
passed  in  1872  providing  that  '  the  secretary  notify  all  those 
whose  policies  have  lapsed  from  non-payment  of  assessments  or 
dues,  that  they  may  be  reinstated  in  the  company  by  produc- 
ing to  the  company  a  certificate  of  good  health  from  any  reg- 
ularly graduated  physician,  obtained  at  their  own  expense, 
and  the  payment  of  all  dues  and  assessments.'  It  appears  by 
the  testimony  that  the  company  acted  under  this  resolution. 
The  secretary  says :  '  I  sent  the  notices  to  members  that  they 
might  be  reminded  of  their  previous  membership  and  might 
reinstate  themselves,  if  possible.'  This  evidence  was  uncon- 
tradicted. This  company  appears,  as  its  name  implies,  to  have 
been  organized  upon  the  principle  of  mutual  protection.  A 
large  amount  of  indulgence  seems  to  have  been  extended  to 
the  members,  and  a  liberal  provision  made  by  which  default- 
ing members  might  be  reinstated.  It  would  be  unjust  to  the 
company  if  this  liberality  should  be  turned  against  itself,  and 
assessment  notices  which  were  intended  for  a  diff erenl  purpose 
should  be  held  to  be  a  waiver  of  a  forfeiture  in  favor  of  apolicy 
holder  who  never  paid  nor  offered  to  pay  his  dues.  We  fail  to 
see  sufficient  evidence  of  a  waiver  to  justify  the  submission  of 
that  question  to  the  jury."  ' 
Where  a  member  is  in  default  for  non-payment  of  an  assess- 

a  Mutual  Protection  v.  Laury,  84  Pa.  St.  43;  Crawford  County  Mutual  v. 
Cochran,  *S  Pa.  St.  835. 


584  ASSESSMENTS. 

ment,  which,  by  the  rules  of  the  society,  forfeits  his  right  to 
benefits,  but  does  not  terminate  his  fraternal  membership  or 
his  right  to  reinstatement  on  conditions  to  the  benefit  class, 
the  forfeiture  is  not  waived  by  the  society  sending  a  notice  of 
the  next  assessment,  calling  attention  to  the  fact  that  the 
prior  assessment  remained  unpaid.1 

The  relations  of  the  society  and  the  delinquent  member 
may  be  such  under  the  terms  of  the  contract  that  the  levy  of 
an  assessment  on  him  will  not  be  construed  as  a  recognition 
of  full  rights  of  membership  in  him.  Where  the  contractual 
relation  between  the  society  and  the  member  is  not  wholly 
dissolved  by  the  non-payment  within  a  certain  time  of  the  as- 
sessment called  for,  but  the  liability  of  the  society  on  the  con- 
tract of  insurance  is  merely  suspended  by  such  non-payment 
during  the  time  the  assessment  remains  unpaid,  the  society 
does  not,  by  the  levy  of  a  second  or  subsequent  assessment 
during  the  period  of  default  in  the  payment  of  a  prior  assess- 
ment and  during  the  period  of  consequent  suspension  of  lia- 
bility, remove  the  disabling  consequences  resulting  to  a  mem- 
ber and  his  beneficiary  from  his  neglect  to  pay  his  assessment.2 
The  sending  of  notices  of  assessment  after  default,  in  such  a 
case,  will  not  be  construed  into  an  acknowledgment  of  liabil- 
ity upon  the  contract  and  a  waiver  of  the  suspension,  but  will 
be  held  to  be  reminders  to  the  member  that  he  may,  under  the 
contract,  revive  his  certificate. 

A  member  of  a  mutual  fire  insurance  company  insured  her 
property,  and  the  policy  contained  a  condition  that,  if  such  as- 
sessments as  were  laid  by  the  company  should  not  be  paid 
within  thirty  days  after  notice  thereof,  the  policy  should  be 
invalid  so  long  as  the  assessment  remained  unpaid.  In  June, 
1872,  an  assessment  was  made,  and  notice  was  given  to  the 
member,  but  she  neglected  to  pay  it.  In  May,  1873,  another 
assessment  was  laid  on  policies  in  force  on  January  1,  1873, 
and  an  agent  of  the  company  sent  a  notice  of  both  assessments 
to  the  member.  The  property  was  destroyed  by  fire,  and  the 
member   tendered  payment  of  the   two   assessments  within 

'Schmidt  v.  Modern  Woodmen,  84  St.    230;  Lantz  v.    Ins.  Co.,  139  Pa. 

Wis.  101;  54  N.  W.  Rep.  264.  St.  546;  21   Atl.    Rep.   80;   Lyon    v. 

2  Leonard  v.  Lebanon  Co.  Mutual,  Supreme  Assembly,  153  Mass.  83;  26 

3  Weekly  Notes  of  Cases  52  ;  Craw-  N.  East.  Rep.  236. 
ford  Co.    Mutual  v.  Cochran,  88  Pa, 


ASSESSMENTS.  585 

thirty  days  after  receipt  of  her  second  notice.  The  tender  was 
refused,  and  suit  was  brought  by  the  member.  It  was  held 
by  the  supreme  court  of  Pennsylvania,  that  the  act  of  the 
agent  in  sending  the  second  notice  of  assessment  was  not  in 
itself  a  waiver  of  the  suspension  of  the  policy,  which  had 
been  worked  by  the  non-payment  of  the  assessment,  and 
which  was  under  the  contract  to  continue  until  the  assess- 
ment should  be  paid.  And  the  court  also  held  that,  in  order 
to  recover,  it  was  necessary  for  the  member  to  further  show- 
that  the  company  had  laid  the  second  assessment  on  this  policy, 
thereby  recognizing  it  as  in  force  on  January  1,  1873,  and  au- 
thorizing the  sending  of  the  notice.'  "Where  the  failure  to  pay 
an  assessment  does  not  absolutely  avoid  the  contract  of  insur- 
ance, but  the  member  is  entitled  to  reinstatement  to  benefits 
under  it  within  a  certain  time,  the  levy  of  an  assessment  on 
him  within  that  time  is  not  sufficient  evidence  of  a  waiver  of 
forfeiture. 

When  a  delinquent  member  has  a  right  to  reinstatement  to 
benefits  under  his  contract  of  insurance,  either  with  or  with- 
out conditions,  the  making  of  subsequent  assessments  which 
he  is  required  to  pay  before  he  can  be  reinstated,  and  the  giv- 
ing him  of  notice  thereof,  do  not  in  any  manner  waive  his  first 
default,  but  are  entirely  consistent  with  the  duty  of  the 
society  toward  him  until  he  has  been  in  arrears  for  the  time 
stipulated,  within  which  he  may  be  reinstated.2 

§  3<>7.  Waiver  of  forfeiture — Attempt  to  collect  assess- 
ments.— As  has  been  said,  the  society  must  inflexibly  abide 
by  the  terms  of  the  contract  in  order  to  insist  upon  a  forfeit- 
ure of  it.  Any  act  inconsistent  with  an  intention  to  stand  by 
its  terms  is  evidence  of  a  waiver  of  the  forfeiture.  A  notice 
that  an  assessment  has  not  been  paid,  suggesting  that  it 
should  lie  paid  at  once,  is  evidence  of  such  a  waiver.  An  as- 
sured died  on  June  2'.*,  without  having  paid  a  premium  which 
was  payable  June  28,  on  penalty  of  forfeiture  of  rights  under 
the  contract.  After  the  premium  was  due,  to  wit.  on  July 
2,  the  company  addressed  a  letter  to  the  assured,  which  con- 

1  Leonard  v.  The  Lebanon  Mutual  v.  Modern  Woodmen,  S4  Wis.    101; 

Ins.  Co.,  3  Weekly  Notes  of  Cases  r>27.  54  N.  W.  Rep.   284;   Stiepel  v.  As.su- 

*  Leffingwell  v.    Grand   Lodge,  86  ciation,  55  Mo.  App.  224. 
Iowa  279;  53  N.W.Rep.  243;  Schmidt 


586  ASSESSMENTS. 

tained  the  following :  "  The  premium  on  your  policy  fell  due 
June  28.  If  you  wish  to  continue  this  policy  in  force,  you 
will  please  remit  above  amount  to  this  office  by  return  mail 
and  oblige."  The  court  held,  in  an  action  on  the  policy,  that 
this  letter  clearly  showed  that  the  company  had  not  elected 
to  forfeit  the  policy  for  the  failure  to  pa3r  the  premium  when 
due,  but  that  the  right  of  forfeiture  reserved  in  the  policy 
had  been  waived.1  A  mutual  benefit  society  is  estopped  from 
claiming  that  a  certificate  of  membership  has  been  forfeited, 
where  it  recognizes  its  continued  existence  by  notifying  him 
that  "  it  is  now  liable  to  immediate  suspension,  unless  prompt 
attention  be  given  to  this  notice." 2  In  an  action  on  a  certifi- 
cate of  membership,  it  was  shown  that  notices  of  assessment 
and  dues  of  date  of  January  1,  of  dues  of  March  1,  and  of  May 
1,  were  given  to  the  deceased  member,  and  default  made  in  pay- 
ment. It  was  claimed  that  by  the  default  the  deceased  mem- 
ber, under  the  terms  of  the  contract,  forfeited  his  rights  of 
membership.  It  was  conceded  that,  by  the  terms  of  the  con- 
tract, the  society  might  have  treated  him  as  having  forfeited 
all  his  rights,  but  it  was  shown  that  a  like  notice  of  dues  and 
assessment  came  from  the  office  of  the  society  addressed  to 
the  member  of  the  date  of  July  1,  following,  and  was  taken 
from  the  postoffice  at  his  place  of  residence  July  8,  the  day 
before  he  died.  This  notice  required  him  to  pay  $2.10  within 
thirty-five  days  and  contained  the  statement  that  "  having 
no  deaths,  we  omitted  our  usual  assessments  for  March  and 
May;  this  includes  deaths  reported  to  date."  And  it  was 
further  shown  that,  by  letter  dated  May  20,  of  the  same  year, 
the  secretary  advised  the  member  that  his  assessment  of  Jan- 
uary had  not  been  paid,  and  added:  "  You  make  a  great  mis- 
take in  not  keeping  up  the  insurance.  *  *  Let  me  hear 
from  you  by  enclosed  postal  if  you  want  to  drop  out."  After 
the  death  of  the  member,  and  before  the  expiration  of  thirty- 
five  days  after  the  receipt  of  the  notice  of  July  1,  the  plaintiff 
as  beneficiary  tendered  payment  of  all  unpaid  dues  and  assess- 
ments, and  the  society  refused  to  accept  them.  It  was  held 
that  there  was  sufficient  evidence  to  permit  the  jury  to  con- 

1  Chicago  Life  v.  Warner,  80  111.        2  Olmstead  v.  Farmers'  Mutual,  50 
411;    True  v.    Association,    78  Wis.    Mich.  200, 
287;  47  N.  W.  Rep.  520. 


ASSESSMENTS.  5S7 

elude  that  the  society  had  continued  the  membership  of  the 
deceased  and  effectually  waived  his  failure  to  make  prompt 
payments.1 

A  certificate  provided  for  six  assessments  per  annum,  and 
that  no  claim  should  be  made  under  it  if  payment  was  not 
made  within  thirty  days  from  the  date  of  notice  that  an  assess- 
ment was  due.  The  assessments  of  June  1  and  August  1 
were  unpaid  on  September  1,  and  the  society  wrote  the  as- 
sured :  "  According  to  the  conditions  of  your  certificate  of 
membership,  an  assessment  amounting  to  s:>(.i.-ki  will  be  due 
and  payable  at  this  office  on  the  1st  of  October,  l^ti."  The 
assured  died  September  30,  and  it  was  held  that  the  letter 
showed  a  waiver  of  the  right  to  declare  the  contract  forfeited 
for  non-payment  of  the  assessments  of  June  and  August.3  A 
certificate  provided  that  a  failure  to  pay  an  assessment  within 
thirty  days  after  the  mailing  of  the  notice  should  terminate 
the  contract  and  forfeit  the  rights  of  membership,  but  that  for 
any  valid  reason  the  member  might  be  reinstated  and  the  con- 
tract renewed,  by  the  payment  of  all  assessments  in  arrears. 
A  notice  was  sent  to  the  member  on  June  1,  and  the  assess- 
ment not  having  been  paid  within  thirty  days,  a  second  notice 
was  sent  on  July  5.  The  assessment  was  paid  on  July  21, 
after  the  death  of  the  member,  and  the  officers  of  the  society, 
knowing  of  his  death,  gave  a  receipt  in  the  ordinary  form.  It 
was  held  that  the  sending  of  the  second  notice  was  a  waiver 
of  the  forfeiture  for  non-payment  within  the  required  time 
alter  the  first  notice,  and,  having  received  such  payment  un- 
questioned, the  society  could  not  repudiate  its  liability  on  the 
certificate."  The  unauthorized  acts  of  the  ministerial  officers 
of  a  subordinate  lodge  can  not  operate  to  dispense  with  ;i  mem- 
ber's duty  to  comply  with  the  laws  of  the  supreme  lodge  in 
regard,  to  the  prompl  payment  of  assessments.  A  benefil  so- 
ciety is  not  estopped  from  enforcing  a  forfeiture  of  a   policy 

"Baker   v.    N.    Y.    State  Mutual  ler  v.  U.  S.  Association,  51  111.  App. 

Benefit  Aj»'n,27N.  Y.  Weekly  Dig.  40. 

•it:  see    Worden  v.    Guardian    Mu-  ' Murray    v.   Association.   <m   Cal. 

tual  Life  Ins.  Co., 89  N.  V.  Superior  402;  27  Pac.  Rep.  809;  Bee  .  288. 

Ct.  817;  Perm  Mutual  v.  Reach,  Kit  -shay  v.  Benefit  Society,  7  N.  V. 

111.  5.S3;  215  N.  East.    Rep.    106;  Muel-  Supp.  287. 


58S 


ASSESSMENTS. 


for  non-payment  of  an  assessment  by  the  fact  that  one  of  its 
sub-agents  attempted,  without  special  authority  for  the  act,  to 
collect  a  past  due  assessment.1 


1  Illinois  Masons'  Ben.  Soc.  v.  Bald- 
win, 86  111.  479;  Borgraefe  v.  Supreme 
Lodge,  K.  of  H.,  22  Mo.  App.  127; 
Leonard  v.  The  Lebanon  Mutual,  3 
Weekly  Notes  of  Cases,  527;  see  also, 
as  sustaining  this  proposition,  Koel- 
ges  v.  The  Guardian  Life  Ins.  Co.,  2 


Lansing,  480;  Bouton  v.  American 
Mutual,  25  Conn.  542;  Ryan  v.  The 
World  Mutual,  41  Conn.  168;  Catoir 
v.  American  Life,  33  N.  J.  L.  487; 
Wall  v.  Home  Ins.  Co.,  8  Bosw.  597; 
Franklin  Life  v.  Sefton,  53  Ind.  380. 


CHAPTER  XXII. 

ASSESSMENTS. 

§  308.     Property  of  society  in  assessments  levied,  or  to  be  levied.     Are 
unpaid  assessments  assets  of  the    society  ?    Can  payment  of 
tli em  be  enforced? 
309.     Interest  of  the  society  in  the  fund  collected  by  assessments. 

§  308.  Property  of  society  in  assessments  levied,  or  to 
be  levied — Are  unpaid  assessments  assets  of  the  society  \ 
Can  payment  of  them  be  enforced  i — It  may  be  stated  as  a 
general  rule  that  an  assessment  under  a  certificate  of  member- 
ship in  the  nature  of  a  policy  of  insurance  in  a  mutual  benefit 
society  does  not  make  the  member  holding  the  certificate  a 
debtor  to  the  society,  so  as  to  authorize  it,  or  its  receiver,  or 
assignee  in  bankruptcy,  to  bring  suit,  in  case  of  neglect  or 
refusal  of  the  member  to  pay  such  assessment.1  The  measure 
of  the  member's  liability  is,  of  course,  to  be  found  in  the  con- 
tract of  insurance.  The  principle  upon  which  this  contract  is 
based  in  mutual  benefit  insurance  is  that  the  members  of  the 
society  shall  be  at  liberty  to  pay  assessments,  or  not,  as  they 
shall  elect;  that  membership  in  the  society  and  contribution 
for  death  losses  shall  be  merely  voluntary;  and  that  a  member 
may  at  anytime  sever  his  connection  with  the  society,  and 
leave  it  without  any  claim  upon  him,  and  leave  him  without 
any  claim  upon  it.  Under  such  contracts,  neither  the  death 
losses  in  the  society  nor  the  assessments  to  pay  them  create 
any  liability  upon  the  member  to  pay.  When  such  a  society 
has  been  placed  in  the  hands  of  a  receiver  or  assignee,  the  facl 
that  death  losses  had  accrued  against  the  society  for  which 
assessments  should  have  been  made,  but  which  the  society 
neglected  to  make,  prior  to  the  institution  of  proceedings  for 
appointment  of  a  receiver,  or  prior  to  the  assignment,  does 
not  authorize  the  court  to  exercise  the  functions  of  the  society 

1  B§  248,  249. 

(589) 


590  ASSESSMENTS. 

bv  making  these  assessments.     The  amount  to  be  assessed  to 
pay  death  losses  is  not  an  asset  of  the  society.1 

The  contract  of  insurance  may  modify  this  plan,  and  pro- 
vide that  the  member  shall  be  liable  for  all  death  losses  and 
assessments  made  during  the  time  he  is  a  member  of  the 
society  and  entitled  to  the  benefits  secured  by  such  member- 
ship. In  such  case,  so  long  as  he  is  a  member  he  is  liable  for 
death  losses  and  assessments,  and,  on  his  refusal  to  pay,  an 
action  may  be  maintained  therefor.  The  by-laws  of  a  society 
provided  that  "  upon  the  death  of  any  member  of  the  asso- 
ciation, it  shall  be  the  duty  of  the  secretary  to  notify  the 
members  of  the  same,  and  thereupon  each  member  shall  within 
thirty  days  after  such  notification  pa}7  to  the  secretary  the 
amount  required  by  the  rules  of  the  association,"  and  that  if 
any  member  should  neglect  to  pay  any  assessment  required 
by  the  by-laws,  "then,  and  in  such  case,  such  membership 
shall  cease  and  determine  at  once  without  notice,  and  all 
claims  be  forfeited  to  the  association."  The  court  held  that 
the  neglect  to  pay  an  assessment  for  thirty  days  after  notice 
thereof  ipso  facto  determined  the  membership  of  the  delin- 
quent; that  he  was  liable  for  the  amount  of  all  assessments 
previously  made,  and  also  for  all  losses  happening  prior  to  the 
time  when  he  ceased  to  be  a  member,  though  no  assessment 
therefor  had  been  made;  that  a  receiver  of  the  society, 
appointed  in  an  action  brought  by  the  state  to  procure  its  dis- 
solution, might  assess  the  members  for  unassessed  losses,  and 
bring  separate  actions  against  each  member  to  recover  the 
assessments  so  made  against  him;  and  that  it  was  the  duty  of 
the  receiver  to  distribute  the  amounts  so  received  equitably 
among  the  several  creditors  of  the  company.2  An  application 
for  insurance  in  a  mutual  benefit  society  contained  a  provision 
that  the  contract  should  become  null  and  void  on  default  of 
payment  of  an  assessment.  It  also  contained  an  agreement  to 
pay  all  dues  and  assessments  until  the  member  should  give 
notice  of  withdrawal,  and  made  reference  to  the  by-laws  of  the 
societv.     These  by-laws  required  compliance  with  the  stipula- 

1  In  re  Protection   Life  Ins.  Co.,  9  ■  McDonald  v.  Ross-Lewin,  29  Hun 

Bissell  188;  see  Burdonv.  Association,  87;  see  Hyatt  v.  Wait,  37  Barb.  (N. 

147  Mass.  360;  17  N.  East.    Rep.  874;  Y.)  29. 
6  N.  Eng.  Rep.  840. 


ASSESSMENTS.  •"'•U 

tions  of  the  application,  and  provided  that  the  "  member  shall 
be  held  liable  to  the  association  for  all  dues  and  assessments 
until  he  shall  have  given  notice  of  his  desire  to  withdraw," 
and  that,  "in  case  of  default,"  such  membership  shall  cease 
and  determine  at  once  without  notice,  and  all  claim  shall  be 
forfeited  to  the  association.  In  construing  these  provisions  of 
the  application  and  by-laws,  the  supreme  court  of  New  York 
held  that  it  was  left  optional  with  the  society  to  terminate,  or 
treat  as  terminated,  the  membership  of  one  who  is  in  default 
of  payment  of  dues  and  assessments,  or  to  continue  his  mem- 
bership, and  charge  him  with  liability  to  pay  dues  and  assess- 
ments until  he  gives  notice  of  his  withdrawal.1  Where  a 
member  is  liable  for  death  losses  and  assessments  made  while 
he  was  a  member  of  the  society,  such  liability  is  an  asset  in 
the  hands  of  a  receiver  of  the  society.2 

§  309.  Interest  of  the  society  in  the  fund  collected  by 
assessments. — It  has  frequently  been  urged  by  counsel  in 
the  adjudicated  cases  that  a  mutual  benefit  society  is  an  agent 
— a  mere  machine  for  the  collection  of  assessments,  that  such 
societies  have  no  interest  in  the  fund  collected  by  them  on  as- 
sessments for  death  losses,  that  the  fund  is  the  property  of 
the  beneficiary  for  whose  benefit  it  was  collected,  and  may 
not,  for  any  reason,  or  upon  any  pretext,  be  withheld  from 
such  beneficiary.  But  courts  have  uniformly  held,  when  they 
have  passed  upon  the  question,  that  such  a  doctrine  is  unten- 
able. When  assessments  have  been  paid  into  the  treasury  of 
a  mutual  benefit  society,  they  become,  in  a  certain  sense,  the 
property  of  the  society.  They  are  not  assets  of  the  society 
to  the  extent  that  they  are  subject  to  its  general  debts,  but 

1  Baker  v.  N.  Y.  State  Mutual  Ben-  Schideler,  36  Ind.  423.  The  cem- 
ent Association,  27  N.  Y.  Weekly  tract  is  to  pay  upon  the  happening 
Dig.  91.  of    certain   contingencies— death   of 

2  Vanatta  v.  Ins.  Co.,  31  N.  J.  Eq.  member,  and  order  of  assessment. 
15;  Com.  v.  Ins.  Co.,  112  Mass.  116;  In  such  cases,  the  statute  of  limita- 
Ins.  Co.  v.  Rand,  24  N.  II.  138;  Ster-  tions  does  not  begin  to  run  until  the 
ling  v.  Ins.  Co.,  32  Pa.  St.  75;  In  re  date  <<(  the  assessment.  Smith  v. 
Equitable  Reserve  Ass'n,  16  N.  Y.  Ball,  Receiver.  107  Pa.  St.  852;  In  re 
Supp.  80.  For  necessary  averments  Ins.  Co.  10  R.  I.  40:  Bigelow  v.  Lib- 
in  a  complaint  or  declaration  by  a  by,  117  Mass.  859;  Eope  Mutual  v. 
receiver  against  a  member  for  unpaid  Weed,  28  Conn  51;  Howland,  Re- 
assessment, see  Downs  v.  Hammond,  ceiver,  v.  Cuykendall,  40  Barb.  320. 
47   Ind.   131;   Erubree,   Receiver,   v. 


592  ASSESSMENTS. 

the  amount  collected  on  an  assessment  belongs  to  the  society 
for  the  benefit  of  a  special  class  of  debtors — the  beneficiaries — 
and  is  subject  to  the  proper  disposal  of  its  officers.1  It  is  the 
right  and  duty  of  the  society  to  protect  from  all  invalid  claims 
its  members  and  the  funds  in  its  hands,  for  whatever  purpose 
and  however  such  funds  may  have  been  raised.  Even  where 
the  society  acquires  a  benefit  fund  by  virtue  of  an  assessment 
levied  upon  and  paid  by  its  members  for  the  purpose  of  pay- 
ing a  certain  specified  death  loss,  the  society  has  such  a  prop- 
erty in,  or  relation  to  the  benefit  fund  that  it  may  refuse  to 
pay  that  claim,  and  resist  its  payment  on  the  ground  of  its 
invalidity.  The  society  is,  in  a  certain  sense,  the  agent  of  its 
members,  but  it  is  an  agent  with  special  and  defined  powers 
and  limitations,  and  the  true  and  obvious  construction  of  these 
powers  and  limitations  forbids  the  payment  of  a  claim  which, 
for  any  reason,  is  invalid.  The  fact  that  it  has  realized  the 
money  by  assessment  for  the  purpose  of  paying  such  a  claim, 
under  the  impression  that  it  was,  or  might  prove  to  be,  a  valid 
claim,  is  no  waiver  of  its  duty  to  see  to  it  that  no  payment 
shall  be  made,  in  case  the  claim  is,  in  fact,  illegal.  The  duty 
of  protecting  such  fund  it  still  owes  to  its  members  who  have 
paid  their  assessments  and  formed  the  fund,  trusting  to  the 
fidelity  of  the  society  to  protect  them  and  it  from  invalid 
claims.3  "Where  members  have  paid  to  the  society  an  assess- 
ment for  a  death  loss,  and  the  officers  of  the  society  have  de- 
cided not  to  pay  the  claim,  an  assignment  to  the  beneficiary, 
by  the  members,  of  the  assessments  so  paid  by  them  to  the 
society,  will  not  entitle  the  beneficiary  to  any  part  of  the  fund. 
After  payment  of  assessments  into  the  treasury  of  the  society, 
the  members  can  neither  assign  the  fund,  nor  maintain  an 
action  to  recover  the  assessments.  The  society  controls  the 
disposition  of  such  a  fund.3  The  funds  of  a  society  derived 
from  assessments  upon  members  to  pay  losses  are,  in  their  na- 
ture, trust  funds  to  be  applied  to  the  payment  of  such  losses. 
The  application  of  such  funds  to  the  purchase  of  the  assets  of  an- 

1  In  re  Protection  Life  Ins.  Co.,  9  Equitable   Reserve,   16  N.  Y.  Supp. 

Bisst'll   188;    Fisher    v.  Andrews,    37  80, 

Hun  (N.  Y.)  176;    Wilber  v.  Torger-       2  Mayer  v.  Equitable  Life  Assonia- 

son,  24  111.  App.   119;    Burdon  v.  As-  tion,  42  Hun  (N.  Y.)  237;  see  §  338. 
sociation,  147  Mass.  360;    17  N.  East.        3  Swett  v.  Citizens'  Mutual,  78  Me. 

Rep.  876;   6  N.  Eng.  Rep.   840;   In  re  541;  7  Atl.  Rep.  394. 


ASSESSMENTS.  593 

other  like  society,  or  to  the  payment  of  losses  upon  contracts 
of  insurance  of  such  other  society,  the  risks  of  which  it  has 
assumed,  is  a  misapplication  of  them.1  A  death  claim  had 
accrued,  an  assessment  was  levied  and  collected,  and  payment 
to  the  beneficiary  was  delayed  without  substantial  grounds, 
until  after  the  society  passed  into  the  hands  of  a  receiver,  and 
it  was  held  that  this  fund  was  impressed  with  a  trust  in  the 
receiver's  hands  and  could  only  be  applied  to  the  payment  of 
the  claim  for  which  it  was  levied.2 

1  State  ex  rel.  v.  Monitor  Ass'n,  42       2  In  re  Equitable  Reserve,  16  N.  Y. 
Ohio  St.  555;  Stamm  v.  Association,    Supp.  80;  see  §  121  et  seq. 
65  Mich.  317;  32  N.  W.  Rep.  710. 

38 


CHAPTER  XXIII. 

ACTION  ON  THE  CONTRACT  OF  THE  SOCIETY. 

§  310.     An  action  may  be  maintained  on  the  contract  of  a  society  to  pay 
benefits. 
311,  312.     The  right  of   a  society  to  provide   methods  for  the  settle- 
ment of  claims  against  it. 
313,  314.     When  the  courts  of  a  society  must  be  resorted  to. 

315.  A  strict  construction   must  be  given   to  provisions  abridging  a 

common  right. 

316.  Authorities  holding  that  the  society  may  make  the  decision  of 

its  tribunal  final. 

317.  Authorities  holding  that  a  society  may  not  make  the  decision  of 

its  tribunal  final. 
317a.  Arbitration  clauses. 

318.  Actions  on  by-laws  for  benefits. 

319.  Effect  of  expulsion  on  the  claim  of  the  expelled  member  for 

benefits. 

§  310.  An  action  may  be  maintained  on  the  contract  of 
a  society  to  pay  benefits. — Where  a  society  provides  in  its 
contract  for  the  payment  of  sick  benefits  or  accident  indem- 
nity to  its  members,  an  action  at  law  may  be  maintained  against 
it,  on  its  refusal  to  fulfill  its  part  of  the  contract.1  There  is  a 
suggestion  in  some  of  the  opinions  in  the  books  that  no  such 
action  may  be  maintained,  and  a  case  decided  many  }Tears  ago 
is  always  cited  as  sustaining  that  doctrine.2  In  the  opinion  in 
that  case  it  is  said  :  "  Even  were  there  not  a  sentence  in  the 
way,  payment  of  his  stipendiary  allowance  could  not  be  enforced 
by  action.  The  society  never  consented  to  expose  itself  to  the 
costs  and  vexation  of  an  action  for  every  weekly  pittance  that 
might  be  in  arrears.  *  *  The  remedy  by  action  is  therefore 
misconceived."      The  sentence  which  stood  in  the  way  of  a 

1  Dolan  v.  Court  Good  Samaritan,  20;  Kentucky  Lodge  v.  "White,  5  Ky. 
128  Mass.  437  ;  Smith  v.  Society,  12   Law.  Rep.  418. 

Philadelphia  380;  Magee,  Adm'x,  v.  2The  Black  and  White  Smiths'  So- 
Clayton  Lodge,  5  Del.  453;  Cartan  v.  ciety  v.  Vandyke,  2  Wharton  (Pa.) 
Father  Mathew  Society,  3  Daly  (N.  Y.)   313. 

(594) 


ACTION    OX    CONTRACT    OF    SOCIETY.  595 

recovery  in  that  case  was  the  judgment  of  the  society,  expelling 
the  claimant,  and  the  question  for  decision  was,  whether  an 
expelled  member  could  collaterally  attack  the  rightfulness  of 
his  expulsion  in  a  suit  for  benefits  alleged  to  have  accrued  after 
his  expulsion.  The  court  was,  without  doubt,  right  in  its  con- 
clusion that  such  a  collateral  attack  might  not  be  made.1  But 
the  question  of  the  form  of  action,  or  the  right  of  a  member  of 
a  mutual  benefit  society  to  sue  for  benefits  arising  out  of  its 
contract  was  not  before  the  court  in  that  case.  The  opinion 
therein  expressed  is  not  based  upon  reasoning ;  it  is  a  mere 
assertion.  Nevertheless,  afterward  in  another  case,2  where  a 
member  of  a  society  brought  an  action  to  "  recover  the  amount 
of  six  weeks'  benefits  as  a  sick  member,''  and  where  the  plea 
was  unon  assumpsit"  it  was  held  in  the  court  below  that  the 
Vandyke  case  was  conclusive  that  such  an  action  would  not 
lie,  and  a  verdict  was  directed  for  the  defendant.  The  case 
was  taken  to  the  supreme  court  of  Pennsylvania,  and  was  there 
decided  upon  another  point.  The  ruling  of  the  court  below 
was  not  considered  in  the  decision,  although  it  was  the 
only  question  discussed  by  counsel.  In  a  later  case3  it  was 
held  that  these  cases  were  not  binding  upon  the  subordinate 
courts  of  the  state,  as  authorities  upon  the  proposition  that  an 
action  for  benefits  may  not  be  maintained  by  a  member  against 
the  society,  and  judgment  was  rendered  against  the  society  on 
such  a  claim.  It  may  confidently  be  asserted  that  societies 
which  agree  to  pay  certain  sums  of  money  on  certain  conditions 
are  amenable  to  the  law,  and  that  in  the  absence  of  provisions 
to  the  contrary  in  the  contract,  the  member,  or  the  beneficiary 
of  a  deceased  member  may  resort  to  the  courts  in  the  first 
instance  to  enforce  his  claim  against  the  society. 

§  811.  The  right  of  a  society  to  provide  methods  for  the 
settlement  of  claims  againsl  it. — In  some  of  the  preceding 
chapters  the  rule  has  been  discussed  concerning  the  right  of  a 
society  to  provide  within  itself  methods  for  redressing  griev- 
ances in  all  matters  of  discipline,  and  for  deciding  controver- 
sies in  relation  to  its  property,  its  doctrine  and  its  policy.4 
There  is  a  conflict  of  opinion  as  to  the  extent  to  which  a 
mutual  benefit  society  may  go  in  restricting  actions  for  bene- 

1  §§  52,  53,  319.  'Smith  v.  Society,  12  Philadelphia 

2  Toram  v.  Association,  4  Barr  (Pa.)    380. 

519.  *§§47to60, 11L 


Odo  ACTIOX    OS    CONTRACT    OF    SOCIETY. 

fits  promised  to  members  or  their  beneficiaries  in  considera- 
tion of  the  payment  of  dues  and  assessments.  Some  authori- 
ties are  to  the  effect  that  such  a  society  may  provide  in  its 
contract  of  membership  for  a  tribunal  for  the  trial  of  any  claim 
against  it,  arising  from  its  agreement  to  pay  benefits,  may 
compel  the  claimant  to  submit  his  claim  to  the  jurisdiction  of 
such  tribunal,  and  may  make  its  powers  plenary,  and  its 
action  final.  But  the  better  rule  seems  to  be  that  while  a 
society  which  issues  certificates  of  insurance  agreeing  to  pay 
a  certain  sum  of  money  as  a  benefit  during  a  member's 
illness,  or  upon  his  death,  in  consideration  of  his  payment  of 
dues  or  assessments,  may  not,  by  provisions  of  its  charter, 
by-laws,  or  certificates  of  membership,  create  in  advance  a  judi- 
cial tribunal  for  the  final  and  conclusive  settlement  of  contro- 
versies which  may  arise  under  its  agreement  to  pay  benefits  or 
death  losses,  yet  it  may  by  such  provisions  or  stipulations  cre- 
ate a  tribunal  within  the  society  for  the  trial  of  such  claims, 
and  may  compel  a  member  or  beneficiary  to  submit  his  claim 
to  such  tribunal,  in  accordance  with  such  provisions,  before  re- 
sorting to  the  courts  of  the  land.  It  is  just  and  reasonable  for 
men  voluntarily  associating  themselves  for  a  worthy  object  to 
require  of  each  other,  in  advance,  an  agreement  that  the  business 
atf airs  of  the  society  shall  be  brought  for  discussion  and  settle- 
ment in  its  tribunals,  before  they  shall  be  made  the  subject  of 
litigation  in  the  public  courts,  and  there  is  nothing  in  such  an 
agreement  in  conflict  with  a  member's  right,  under  the  consti- 
tutions and  laws  of  the  land,  to  appeal  to  the  courts  in  mat- 
ters pertaining  to  his  property,  and  nothing  which  seeks  to 
take  away  the  jurisdiction  of  such  courts.  There  is  mani- 
festly a  broad  distinction  between  an  agreement  to  do  certain 
things  before  bringing  an  action,  on  the  one  hand,  and  an 
agreement  to  refer  to  arbitration,  or  to  submit  to  and  abide  by 
the  decision  of  the  courts  of  a  society,  on  the  other  hand.  An 
agreement  which  merely  requires  certain  acts  to  be  done  or 
omitted  before  bringing  an  action,  not  only  does  not  attempt 
to  oust  courts  of  jurisdiction,  but  contemplates  an  appeal  to 
the  courts  after  certain  preparation.  An  agreement  to  abide 
by  the  decision  of  the  courts  of  a  society  is  equivalent  to  an 
agreement  that  ho  action  shall  be  brought  in  the  courts  of  the 
state.     While  specific  performance  of  an  agreement  to  do  or 


ACTION   ON    CONTRACT    OF   SOCIETY.  597 

omit  certain  acts  before  bringing  suit  can  not  be  enforced, 
courts  of  law  or  equity  will  refuse  to  take  cognizance  of  a 
claimant's  demand  until  he  has  exhausted  those  remedies  in 
the  tribunals  of  the  society  which  the  contract  stipulates  that 
he  must  pursue. 

To  hold  that  such  societies  can  establish  judicial  tribunals 
and  confer  upon  them  power  to  decide  finally  and  conclusively 
upon  property  rights,  even  of  its  own  members,  is  to  recog- 
nize in  them  the  attributes  of  sovereignty;  and  to  take 
away  entirely  the  power  to  abridge  the  right  to  resort  to  the 
public  courts,  would  greatly  impair  their  strength  and  useful- 
ness. The  rule  as  stated  is  liberal  and  is  strictly  in  harmony 
witli  the  principles  of  the  law. 

§  312.  It  will  be  observed  that  the  controverted  question 
is  as  to  the  legality  of  such  provisions  of  the  contract  as  seek 
to  give  to  the  tribunals  of  the  society  the  exclusive  jurisdic- 
tion of  claims  arising  from  its  contracts.  The  decision  of  the 
question,  therefore,  affects  all  societies  alike,  whether  they  be 
incorporated  or  unincorporated.  It  must  be  remembered  that 
the  by-laws  of  a  society  incorporated  under  the  laws  of  the 
land  must  be  reasonable  and  necessary  for  its  government,  and 
where  a  by-law  of  such  a  society  provides  that  all  claims 
against  it,  growing  out  of  its  contracts  with  its  members,  must 
be  submitted  to  its  own  tribunals  for  settlement,  and  that  the 
decision  of  such  tribunals  shall  be  final,  the  further  question 
arises,  whether  such  a  by-law  is  necessary  for  its  good  govern- 
ment, and  whether  it  is  reasonable  that  the  society  shall  con- 
stitute itself  the  judge  of  its  liability,  and  of  the  amount  which 
it  ought  to  pay  to  the  claimant. 

Where  the  stipulation  is  contained  in  the  certificate,  and  not 
in  the  by-laws,  it  is  in  the  nature  of  a  special  agreement  and 
is  not  open  to  the  objection  that  it  is  not  reasonable  and  nec- 
essary.1 

§313.  When  the  courts  of  a  society  must  be  resorted 
to. — When  the  contract  requires  a  member  or  his  beneficiary 
to  submit  his  claim  to  a  tribunal  of  the  society,  and  in  case  of 
an  adverse  decision  on  it,  to  appeal  to  certain  appellate  tribu- 
nals, he  has  no  right  to  bring  an  action  on  the  claim  in  the 
courts  of  the  land,  until  he  has  exhausted  his  remedies  in  the 

'§  23. 


598  ACTION   ON    CONTRACT    OF    SOCIETY. 

courts  of  the  society.1  Where  the  by-laws  provide  that  the 
decision  of  a  subordinate  tribunal  shall  be  final,  unless 
reversed  on  appeal  by  the  supreme  council,  a  member  who 
is  dissatisfied  with  the  decision  of  the  lower  tribunal  must, 
before  resorting  to  the  courts  of  the  land,  appeal  to  the 
supreme  council  of  the  society.2  Where  the  by-laws  of  a 
society  provide  that  the  board  of  trustees  shall  examine  all 
claims  of  members  for  sick  benefits,  and,  if  found  correct, 
shall  order  the  same  to  be  paid,  a  member  may  not  resort  to  a 
suit  at  law  for  such  benefits,  without  giving  the  board  an  op- 
portunity to  examine  his  claim.3  It  has  been  held  that,  where 
a  member  makes  a  claim  against  a  society  for  money  due  upon 
its  contract,  and  claims  to  stand  in  the  relation  of  a  creditor 
of  the  society,  or  where  the  beneficiary  of  a  deceased  member 
makes  a  claim  against  the  society  for  money  due  upon  its  con- 
tract of  insurance,  a  mere  right  to  submit  the  claim  to  a  tri- 
bunal of  the  society,  and  to  appeal  from  its  decision  to  a  higher 
tribunal  in  the  society,  without  a  stipulation  that  the  claim- 
ant must  resort  to  the  prescribed  methods  of  procedure,  does 
not  abridge  the  right  of  the  claimant  to  appeal,  in  the  first 
instance,  to  the  courts  to  coerce  payment,  when  payment  is 
withheld.  The  corporate  rights  of  a  member  of  an  incor- 
porated mutual  benefit  society  are  subject  to  the  control  of 
the  corporation,  and  the  rights  of  a  member  of  an  unincor- 
porated society  are  subject  to  the  will  of  the.  majority,  under 
the  contract  of  membership.  It  is  only  proper  and  just,  there- 
fore, to  hold  that,  when  the  society  has  legislated  upon  a  mat- 
ter concerning  the  contract  of  membership  and  the  rights 
which  may  arise  thereunder,  its  provisions  must  be  followed 

'Poultney  v.  Bachman,  31  Hun  14  N.  Y.  Supp.  361;  Supreme  Sitting 
(N.  Y.)  49;  Lafond  v.  Deems,  81  N.  v.  Stein,  120  Ind.  270;  22  N.  East. 
Y.  508;  White  v.  Brownell,  2  Daly  Rep.  136;  Supreme  Council  v.  For- 
329;  Harrington  v.  Workingmen  s  singer,  125  Ind.  52;  25  N.  East.  Rep. 
Ben.  Ass'n,  70  Ga.  340;  Chamberlain  129;  Schryver  v.  Columbia  Lodge,  3 
v.  Lincoln,  129  Mass.  70;  Reed  v.  Oh.  Cir.  Ct.  422;  Anderson  v.  Su- 
Ins.  Co.,  138  Mass.  575;  Ellison  v.  preme  Council,  135  N.  Y.  107;  31  N. 
Bignold,  2  Jac.  &  W.  505;  McAlees  East.  Rep.  1092;  see  §§  47,  111. 
v.  Supreme  Sitting,  120  Pa.  St.  (not  2  Supreme  Council  v.  Forsinger, 
reported);  13  Atl.  Rep.  755;  Mentz  v.    supra. 

Ins.  Co.,  79  Pa.  St.  478;  Brenemanv.       3  Robinson  v.  Society,  67  Cal.  135; 
Association,  3  W.    &   S.    (Pa.)  218;    7  Pac.  Rep.  435. 
Burns  v.  Union,  10  N.  Y.  Supp.  916; 


ACTION    ON    CONTRACT   OF    SOCIETY.  599 

by  one  who  claims  relief  under  the  contract  of  membership. 
Controversies  concerning  the  discipline,  property,  govern- 
ment, dissolution,  etc.,  of  the  society  arise  directly  from  the 
contract  of  membership,  and,  where  a  mode  of  deciding  con- 
troversies and  settling  disputes  in  such  matters  is  provided 
for  within  the  society,  the  prescribed  mode  must  be  pursued 
whether  the  language  used  in  prescribing  it  be  permissive  or 
mandatory.  But  the  right  of  a  member  to  sick  benefits,  or 
accident  indemnity,  and  the  rights  of  a  beneficiary  in  the  ben- 
efit fund  rest  upon  the  contract  entered  into  by  and  between 
the  society  and  the  member.  The  contract  of  the  society  to 
pay  benefits  or  indemnity  is  a  different  contract  from  that  of 
membership,  although  both  contracts  are  often  embodied  in 
one.1 

By  the  contract  of  membership  the  member  becomes  a  part 
of  the  society,  and  all  his  rights,  as  a  member,  are  to  be 
viewed  from  his  relation  to,  and  interest  in  the  society.  But 
in  promising  to  pay  benefits  and  indemnity  to  the  member  or 
a  benefit  fund  to  his  beneficiary,  the  society  contracts  with 
him  as  with  a  stranger,  or,  at  least  it  contracts  with  him  in 
his  capacity  as  an  individual,  not  as  a  member,  and  their  rela- 
tions are  to  some  extent  antagonistic,  and  may  become  en- 
tirely so.  The  contract  between  the  society  and  the  insured  is 
to  be  construed  most  strongly  against  the  society  and  in  favor 
of  the  insured  and  his  beneficiary,  and  where  the  contract 
merely  gives  to  the  insured  a  right  to  submit  his  claim  to  a 
tribunal  of  the  society  for  adjudication,  it  will  not  be  so  con- 
strued as  to  compel  him  to  submit  it.  And  then  again,  courts 
of  justice  are  freely  open  to  those  who  seek  money  due  them 
upon  a  contract,  and  the  party  who  asserts  that  the  right 
to  invoke  the  aid  of  the  court  has  been  curtailed,  must  show 
a  clear  agreement  abridging  the  right.  If  a  man  has  a  Legal 
right,  and  the  society  to  which  he  belongs  adds  others, 
that  of  submitting  his  claim  to  the  society  for  adjustment, 
and  that  of  appeal  to  its  superior  governing  bodies,  the  added 
rights  are  merely  cumulative;  they  are  not  exclusive.  Posi- 
tive words  only  can  take  away  an  existing  right.  Conferring 
a  right  to  pursue  a  given  course  does  not  destroy  an  existing 
right;  in  order  to  destroy  such  a  right,  proper  limiting  words 

1  See  §  6. 


600  ACTION    ON    CONTRACT   OF    SOCIETY. 

must  be  employed.1  It  must  be  admitted  that  this  principle 
has  not  been  kept  in  view  in  the  reported  cases,  but  this 
distinction  is  certainly  sustained  by  sound  reasoning.  It  is 
analogous  to  the  well-established  general  rule  that  where  two 
courts,  organized  under  the  laws  of  the  same  state,  have  con- 
current jurisdiction  of  the  subject-matter  of  an  action,  the 
suitor  may  choose  the  one  to  which  he  will  submit  the  adjudi- 
cation of  his  rights. 

§  314.  Any  unjust  procedure  or  unreasonable  delay  on  the 
part  of  the  tribunal  of  the  society  in  investigating  and  passing 
upon  a  claim  presented  to  it,  which  clearly  shows  that  it  is 
acting  in  bad  faith  and  in  practical  disregard  of  the  claimant's 
rights,  will  excuse  him  from  exhausting  his  remedies  in  the 
society,  and  give  him  the  right  to  proceed  at  once  in  the  pub- 
lic courts.2  Where  a  member  is  prevented  from  exhausting 
the  remedies  provided  by  the  society  for  the  recovery  of  claims 
against  it,  by  the  willful  refusal  of  the  proper  officer  to  certify 
to  his  sickness,  from  which  refusal  no  appeal  is  provided  for  by 
its  laws,  he  is  entitled  in  the  fi>st  instance  to  institute  a  suit 
and  recover  judgment  in  a  court  of  law  upon  a  valid  claim  for 
sick  benefits.3 

Where,  after  a  claim  has  been  rejected  by  the  proper 
tribunal  of  a  subordinate  lodge,  the  supreme  tribunal  on  mo- 
tion of  one  of  its  members  reviews  the  ruling  of  the  subordi- 
nate tribunal  and  affirms  its  rejection  of  the  claim,  the  member 
need  not  formally  prosecute  an  appeal,  but  may  at  once  resort 
to  the  courts  pf  the  land.4 

§  315.  A  strict  construction  must  be  given  to  provisions 
abridging  a  common  right. — It  is  easy  for  a  society  to  make 
such  provisions  in  its  contract  as  it  may  deem  desirable  and 
necessary,  and  there  is  no  reason  why  such  provisions  should 
be  extended  by  construction.  When  rules  and  articles  of  asso- 
ciation are  resorted  to  against  common  right,  courts  lean  to  a 
strict  construction.6     A  by-law  of  a  society,  which   provides 

1  Bauer  v.  Samson  Lodge,  102  Ind.  4  McMahon  v.  Supreme  Council,  54 
262;  1   N.   East. 'Rep.   571;  Supreme   Mo.  App.  468. 

Council  v.    Garrigus,    104  Ind.  133;       5  Wallace  v.  Ins.  Co.,  41  Fed.  Rep. 
3  N.  East.  Rep.  818.  742;    Strasser  v.    Staats,    13  N.    Y. 

■  Carlen  v.  Drury,  1  Ves.  &  Beanies   Supp.  167. 
154;  White  v.  Brownell,  2  Daly  329. 

3  Supreme  Sitting  v.  Stein,  120  Ind. 
270;  22  N.  East.  Rep.  136. 


ACTION    ON    CONTRACT   OF    SOCIETY.  601 

for  a  right  of  appeal  from  the  proceedings  of  a  lodge  "in  all 
matters  of  form  required  by  the  constitution  and  laws  of  the 
order,"  does  not  apply  to  a  resolution  directing  that  sick  bene- 
fits be,  or  be  not  paid,  but  only  has  reference  to  those  observ- 
ances for  breach  of  which  there  may  be  trial  and  punishment.1 
One  of  the  by-laws  of  a  society  provided  that  "  every  matter 
in  dispute  between  this  institution,  or  any  person  acting  under 
or  on  behalf  of  this  institution,  and  any  member  thereof  or 
person  claiming  on  account  of  any  such  member,  shall  be 
referred,  to,  and  decided  by  arbitrators  appointed,"  etc.  In 
construing  this  rule,  it  was  held  that  it  did  not  apply  to  the  case 
of  a  claim  by  the  administrator  of  a  member  for  the  amount 
of  a  certificate  of  insurance  on  the  life  of  such  member,  and 
consequently,  that  those  provisions  were  no  answer  to  an  action 
by  an  administrator  on  the  certificate.  The  court  said : 
"  The  case  of  an  executor  does  not  fall  within  this  language, 
for  he  does  not  claim  on  account  of  the  member,  but  on  his 
own  account." a  The  fact  that  the  laws  of  a  society  provide 
that  any  sick  brother  shall  report  to  the  chief  officer  of 
the  society,  whose  duty  it  shall  be  to  draw  on  the  treasurer 
for  the  sum  allowed  by  law,  if  he  is  satisfied  that  the  brother 
is  entitled  to  sick  benefits,  does  not  make  his  decision  final. 
In  such  case  the  officer  acts  merely  as  an  agent  of  the  lodge, 
and  possesses  no  judicial  authority.3  The  laws  of  a  mutual 
benefit  society  provide  that,  on  notice  of  the  disability  of  a 
member,  a  board  of  physicians  shall  examine  him,  and  report 
to  the  supreme  council;  that  all  proofs  for  death  or  disability 
benefits  shall  be  approved  by  the  subordinate  council;  and 
that,  upon  approval  of  satisfactory  proofs  of  a  member's  dis- 
ability, he  shall  be  entitled  to  a  benefit.  These  provisions  do 
not  give  the  subordinate  council  the  right  to  reject  a  claim 
for  either  a  death  or  disability  benefit.  Such  a  right  will 
never  be  presumed,  but  must  be  given  in  the  clearest  and  most 
explicit  terms.4  A  provision  that  in  cases  of  dispute  "the 
members   shall   exhaust   their   remedy   in   the   order,    before 

■Mattoon  v.  Wentworth,    4    Cin.  8 Kentucky  Lodge  v.  White,  5  Ky. 

Law  Bull.  513.  Law  Rep.  41S. 

-  Krlsall  v.  Tyler,  34  Eng.  L.  &  Eq.  *  Albert  v.  Order  of  Chosen  Friends, 

588.     The   decision    in    this    case   is  34    Fed.    Rep.     721;     Grand    Central 

placed  mainly  on  another  ground.  Lodge  v.  Grogan,  44  111.  App,  111. 


602  ACTION   ON    CONTRACT   OF   SOCIETY. 

resortino-  to  a  court  of  law"  relates  not  to  controversies  with 
the  order  itself,  but  to  controversies  of  members  within  the 
order.1 

A  by-law  provided  :  "  Claims  against  the  association  shall 
be  referred  to  the  board  of  directors,  and  upon  the  approval 
of  a  majority  of  said  board,  with  that  of  the  president,  the 
same  shall  be  paid  by  the  secretary  and  treasurer.  It  shall 
also  be  the  duty  of  the  board  to  examine  all  books,  papers  and 
accounts  of  the  association,  and  know  that  the  business  is  hon- 
estly and  properly  conducted.  They  shall  decide  all  points  of 
dispute  and  questions  of  doubt  that  may  arise,  and  their  de- 
cision shall  be  final."  The  court  held  that  the  questions  on 
which  the  decision  of  the  board  was  to  be  final  were  those 
which  might  arise  from  the  examination  of  its  accounts,  the 
management  of  its  business  and  the  conduct  of  its  internal  af- 
fairs, but  that  the  right  was  not  conferred  upon  the  board  to 
decide  finally  on  claims  against  the  association  for  mortuary 
benefits  under  its  contracts  of  insurance.2 

§  316.  Authorities  holding  that  the  society  may  make 
the  decision  of  its  tribunal  final. — In  one  case,  in  determin- 
ing whether  the  court  would  inquire  into  the  suspension  by 
the  society  of  the  payment  of  weekly  benefits  to  a  member,  it 
wras  said :  "  Can  the  right  to  recover  them  be  passed  upon 
here  ?  Those  were  payable  in  case  of  sickness  or  inability  to 
work.  The  association,  by  its  rules,  provided  a  means  of  as- 
certaining the  circumstances  under  which,  or  by  reason  of 
which,  the  party  should  be  entitled.  The  degree  of  sickness 
or  inability  was,  in  the  very  nature  of  the  case,  an  open  and 
indefinite  matter.  How  much  departure  from  the  standard  of 
full  health  would  be  necessary,  or  what  the  standard  should 
be,  or  what  would  constitute  inability  to  labor,  would,  in 
many  cases,  be  very  difficult  to  determine  by  any  legal  rules. 
The  propriety,  therefore,  if  not  necessity,  of  leaving  this  mat- 
ter to  be  determined  by  the  society  or  its  committee,  according 
to  its  own  rules,  assented  to  by  all  its  members  is,  to  my 
mind,  very  apparent.     And  as  long  as  the  society  and  its  com- 

1  Buckofzer  v.  Grand  Lodge,  15  N.  35  N.  East.  Rep.  168;  Railway  Asso- 
Y.  Supp.  922.  ciation  v.  Loomis,  43111.  599;  Daniher 

2  Railway  P.  and  F.  C.  Mut.  Aid  and  v.  Grand  Lodge  (Utah),  37  Pac.  Rep. 
Ben.  Ass'n  v.  Robinson,  147  111.  138;  245. 


ACTION   ON    CONTRACT   OF    SOCIETY.  603 

mittee  acted  in  good  faith,  without  fraud,  their  determination 
should  be  deemed  conclusive." ! 

The  charter  of  a  society  provided  that,  under  certain  cir- 
cumstances, in  case  of  sickness,  a  member  was  to  be  allowed  a 
certain  sum  per  week.  "  This  allowance  is  to  be  made  from 
the  time  of  his  application  in  writing  to  the  president,  whilst 
so  much  remains  in  the  funds."  In  an  action  for  benefits  un- 
der the  charter,  plaintiff  introduced  the  charter,  proved  mem- 
bership, sickness  and  application  to  the  president.  The  record 
does  not  state  whether  there  had  been  any  decision  on  the  ap- 
plication by  the  president,  or  the  society.  The  supreme  court 
of  Pennsylvania,  in  deciding  this  case,  said  :  "  The  corpora- 
tion is  bound  by  the  fundamental  articles  to  pay  only  when  it 
is  in  funds,  and  it  has  determined  that  it  is  not.  As  the  plaint- 
iff in  becoming  a  corporator  assented  to  its  acts  prospectively 
to  be  done,  according  to  the  charter  of  its  constitution,  he  is 
concluded  by  the  decision  of  bis  own  forum.  We  are  to  be- 
lieve that  the  proper  authorities  passed  judicially  on  his  claim, 
and  we  are  not  to  re-judge  their  judgment."2  In  one  case 
it  was  held  that  a  by-law  of  a  mutual  benefit  society,  which  in- 
vests a  committee  with  authority  to  determine  whether  a 
member  claiming  to  be  sick  is  entitled  to  the  benefit  provided 
for  in  the  by-law,  is  valid  and  reasonable,  and  where  a  member 
applies  to  the  society  for  aid,  the  decision  of  the  committee  is 
final.3 

A  by-law  of  a  society  read  as  follows :  "  The  executive  com- 
mittee shall  have  power  to  pass  on  all  death  claims,  and  if  in 
their  judgment  any  such  claim  is  not  on  its  face  a  valid  one, 
they  shall  notify  the  beneficiary  or  beneficiaries  of  the  deceased 
members  thereof,  and  give  them  or  their  attorneys  an  oppor- 
tunity to  appear  before  such  committee  within  sixty  days 
thereafter,  and  present  such  evidence  as  they  may  have  to 
establish  the  justness  or  validity  of  such  claim,  and  the  said 
committee  shall  try,  hear,  and  decide  upon  the  justness  or  va- 
lidity of  such  claim,  and  such  decision  shall  be  binding  upon 
such  claimant,  unless  an  appeal  is  taken  to  the  great  camp. 
The  notice   of  the  appeal  from  the  decision  of  the  said  com- 

1  Fritz  v.  Muck.  62  How.  Pr.  70.  378;  29  N.  W.  Rep.  863;  6  Western 

!T6ram  v.   Association,  4  Pa.  St.  Rep.   132;   see  Robinson  v.  Templar 

519.  Lodge.  97  Cal.  62;  31  Pac.  Rep.  609; 

s  Van  Poucke  v.  Society,  63  Mich,  see  §  49. 


604  ACTION    ON    CONTRACT    OF    SOCIETY. 

mittee  must  be  filed  with  the  great  record  keeper  within  sixty- 
days  thereafter.  The  decision  of  the  great  camp,  in  all  such 
cases,  shall  be  final,  and  no  suit  in  law  or  equity  shall  be 
commenced  or  maintained  by  any  member  or  beneficiary." 
A  member  holding  a  certificate  for  $1,000  died,  and  his 
wife  as  beneficiary  presented  her  claim  to  the  ccnnmittee, 
which  decided  against  it  on  the  ground  that  at  the  time  of 
his  death  he  was  not  a  member  in  good  standing,  but  had  been 
duly  and  regularly  suspended  therefrom,  in  accordance  with 
the  rules  and  regulations.  She  then  appealed  to  the  grand 
camp,  which  also  disallowed  the  claim,  after  a  full  examina- 
tion and  hearing.  She  then  brought  suit,  and  judgment  was 
rendered  against  her.  The  supreme  court  of  Michigan  said  :  * 
"  It  is  claimed  on  behalf  of  plaintiff  that  the  provision  above 
quoted,  which  makes  the  decision  of  the  great  camp  final, 
is  contrary  to  public  policy,  and  void,  in  that  it  ousts  the 
court  of  jurisdiction.  No  charge  is  made  that  either  the  com- 
mittee or  the  grand  camp  acted  fraudulently,  or  in  any  manner 
contrary  to  the  rules  and  regulations  of  the  order.  I  am 
unable  to  see  any  difference  between  the  present  case  and  that 
of  Van  Poucke  v.  Society.2  These  organizations  are  purely 
voluntary,  and  it  may  well  be  considered  by  their  members 
important  that  claims  of  this  character  should  be  determined 
by  methods  more  inexpensive  than  resorts  to  the  courts.  This 
reason  is  well  expressed  by  my  Brother  Champlin  in  the  case 
above  cited.  Plaintiff  seeks  to  maintain  a  distinction  between 
that  case  and  the  present  one,  in  that  the  plaintiff  was  himself 
a  member  claiming  for  "  sick  benefits,"  while  the  plaintiff  here 
is  not  a  member,  and  had  no  voice  in  the  selection  of  members 
of  the  tribunal.  Her  right  depends  solely  upon  the  voluntary 
act  of  her  husband  in  becoming  a  member.  Her  right  to 
receive  the  benefit  depended  upon  his  complying  with  the  con- 
stitution and  rules  to  which  he  assented,  and  which  became  a 
part  of  his  contract.  I  can  see  no  reason  why  a  different  rule 
should  apply  to  plaintiff  than  to  a  member  making  a  claim 
for  benefits.  Similar  provisions  have  been  sustained  by  the 
courts."  3 

1  Canfield  v.  Great  Camp,  87  Mich.  s  Supra. 

626;  49  N.  W.  Rep.  875;  seeHembeau  3  Citing  Anaconda  Red  Men  v.  Mur- 

v.  Great  Camp  (Mich.),  59  N.  W.  Rep.  bach,  13  Md.   91;  Toram  v.   Associa- 

417.  tion,   4  Pa.  St.   519;  Soctiey  v.  Van- 


ACTION    ON    CONTRACT    OF    SOCIETY.  605 

It  was  held  that  the  decision  as  to  the  right  to  benefits 
under  the  by-laws  of  a  mutual  benefit  society,  made  by  the 
officer  or  body  which  the  constitution  required  should  decide 
it,  was  conclusive,  and  could  not  be  reviewed  by  the  courts.1 
Where  a  member  of  an  incorporated  mutual  benefit  society 
has  a  claim  against  the  society  for  benefits  under  its  by-laws, 
which  has  been  disputed,  and  decided  against  him  by  the  de- 
cision of  the  proper  tribunal  acting  under  the  general  laws  and 
by-laws  of  the  order,  "whose  decision,"  it  is  provided,  "shall 
be  final,"  a  court  of  law  has  no  jurisdiction  over  an  action 
to  recover  such  benefits.2  The  laws  of  a  mutual  benefit  society 
provided  that  where  a  member  had  a  cause  of  complaint 
against  the  society  for  benefits,  he  should  appeal  to  the  dif- 
ferent courts  of  the  order  naming  them,  and  should  he  neglect 
to  pursue  this  course,  and  bring  a  suit  in  court,  he  should  be 
expelled  from  the  society.  A  member  presented  a  claim 
against  the  society  to  the  proper  tribunal  of  the  order,  appealed 
to  each  of  the  courts  as  provided  in  the  laws,  and  in  each  of 
these  courts  his  claim  was  denied.  He  then  brought  suit  in 
the  courts  of  the  state  of  Maryland,  but  it  was  held,  following 
Anacosta  Tribe  v.  Murbach,  supra,  that  the  courts  of  that  state 
had  no  jurisdiction  of  the  claim.3  A  corporation  was  organized 
under  the  laws  of  Illinois  for  the  purpose  of  providing  for  its 
members  in  case  of  permanent  disability,  and  for  their  depend- 
ents in  case  of  death,  by  assessments  to  be  levied  on  surviving 
members.  Its  constitution  provided:  "All  claims  against  the 
association  shall  be  referred  to  the  board  of  directors,  whose 
decision  shall  be  final,"  and  "assessments  shall  not  be  made, 
except  on  its  authority."  A  claim  against  the  corporation  for 
$2,500j  on  a  contract  of  insurance  issued  by  it  upon  the  life  of 
a  deceased  member,  was  made  before  the  board  of  directors. 
The  hoard  of  directors,  at  a  regular  meeting,  after  an  investi- 
gation of  the  facts  in  regard  to  the  claim,  by  a  unanimous 
vote,  refused  to  allow  the  claim  and  order  an  assessment  for 
its  payment,  assigning  as  a  reason  that  the  deceased  was  at 

dyke,  2  Whart.   809;  Woolsey  v.   In-  hawk   Lodge  v.  Wentworth,   I  ('in. 

dependent  Order  of  Odd  Fellows,  61  Law  Bull.  518. 

Iowa,  492;  16 N.  W.  Rep.  576;  Rood  'Anacosta  Tribe  v.   Murbach,    18 

v.  Association.  31  Fed.  Rep.  62.  Mil.  91. 

'Cincinnati  Lodge  v.  Littlebury,  B  Osceola  Tribe  v.  Schmidt,  Adm'r, 

6  (in.  Law  Bull.  2:37;  see  also  Mo-  57  Mil.  98. 


606  ACTION    ON    CONTRACT   OF    SOCIETY. 

least  sixty  days  delinquent  in  the  payment  of  his  assessments 
at  the  time  of  his  death.  It  was  held  that  the  power  of  these 
directors,  in  regard  to  the  allowance  of  this  claim,  and  the 
ordering  of  an  assessment  to  pay  it,  was  plenary  and  final,  and 
that  after  the  decision  of  the  board,  refusing  payment  of  the 
claim,  no  suit  could  be  maintained  upon  it.  In  his  opinion  the 
learned  judge  cites  no  authorities,  but  reasons  as  follows :  "  It 
was  certainly  competent  for  the  members  of  this  association 
to  agree  among  themselves  that  the  action  of  their  board  of 
directors  in  reference  to  any  claim  presented  against  the  society 
should  be  final,  and  there  can  be  no  doubt,  from  the  language 
of  the  clause  of  the  constitution  just  quoted,  that  they  have  so 
agreed.  The  duty  of  the  board  of  directors  is  two-fold;  first,  to 
approve  the  claim,  and,  second,  to  order  an  assessment  to  pay  it, 
and  no  member  is  under  any  obligations,  expressed  or  implied, 
to  pay  an  assessment  for  the  liquidation  of  a  claim  against  the 
association  unless  the  claim  has  been  approved  by  the  board  of 
directors,  and  the  assessment  ordered  by  the  board.  "Waiving, 
therefore,  all  questions  as  to  whether  the  board  of  directors 
would  be  under  any  more  obligations  to  approve  this  claim 
after  a  judgment  had  been  rendered  in  favor  of  this  plaintiff 
than  before,  it  is  sufficient  to  say  that  it  seems  clear  to  me  that 
the  sole  power  of  determining  whether  the  association  should 
or  should  not  pay  a  claim,  and  an  assessment  be  ordered  to  pay 
it,  is  vested  in  this  board  of  directors,  and  no  court  can  review 
or  re-examine  their  decision  in  that  regard.  The  constitution 
says  the  action  of  the  board  shall  be  final,  and  the  courts  must 
so  treat  it.'1 ' 

§  317.  Authorities  holding  that  a  society  may  not  make 
the  decision  of  its  tribunal  final. — There  are  two  cases  a 
which  are  sometimes  cited  as  sustaining  the  broad  proposition 
that  a  society  which  issues  contracts  of  insurance,  or  agrees 

1  Rood  v.  Railway  Association,  31  respect  for  the  distinguished  judge 
Fed.  Rep.  62.  In  Railway  Associa-  who  rendered  that  decision,  we  are 
tion  v.  Robinson,  147  111.  138,  35  N.  unable  to  yield  our  assent  to  its  con- 
East.  Rep.  168,  this  case  was  criti-  elusions."  See  Railway  Association 
cised,  and  the  court  said  :  "  The  case  v.  Loomis,  43  El.  App.  599. 
of  Rood  against  this  same  association  2  Bauer  v.  Samson  Locige,  102  Lad. 
reported  in  31  Fed.  Rep.  62  is  in  point,  262:  Supreme  Council  v.  Garrigus, 
and  in  that  case  a  different  result  was  104  Ind.  133. 
reached.     While  we  have  the  highest 


ACTION    ON    CONTRACT    OF    SOCIETY.  607 

to  pay  benefits,  can  not  by  provisions  in  such  contracts  and 
agreements  compel  a  member  or  beneficiary  to  resort  to  the 
courts  of  the  society  and  exhaust  his  remedies  therein,  before 
bringing  an  action  in  the  public  courts  on  such  contract. 
While  the  discussion  and  argument  of  the  questions  involved 
took  a  wide  range  in  these  cases,  the  points  decided  by  the 
court  by  no  means  sustain  such  a  proposition.  They  hold  that 
it  is  not  within  the  power  of  individuals  or  corporations  to 
create  judicial  tribunals  for  the  final  and  conclusive  settlement 
of  controversies.1  A  society  can  not  by  provisions  of  its  con- 
tract confer  upon  its  own  tribunals  the  exclusive  power  to 
pass  upon  the  validity  of  claims  against  it,  and  thus  deprive 
the  courts  of  jurisdiction  to  entertain  actions  against  it."  In 
treating  of  the  power  of  individuals  or  societies  to  create  judi- 
cial tribunals,  the  court  of  appeals  of  New  York  said  : '  "  The 
effect  of  some  of  these  provisions  of  these  constitutions  is  to 
create  a  tribunal  having  power  to  adjudicate  upon  the  rights 
of  property  of  all  the  members  of  the  subordinate  lodges,  and 
to  transfer  that  property  to  others;  the  members  of  this  tri- 
bunal being  liable  to  constant  fluctuations,  and  not  subject  in 
any  case  to  the  selection  or  control  of  the  parties  upon  wln.se 
rights  they  sit  in  judgment.  To.  create  a  judicial  tribunal  is 
one  of  the  functions  of  the  sovereign  power;  and  although 
parties  may  always  make  such  tribunals  for  themselves,  in  any 
specific  case,  by  a  submission  to  arbitration,  yet  the  power  is 
guarded  by  the  most  cautious  rules.  A  contract  that  the  par- 
ties will  submit,  confers  no  power  upon  the  arbitral  or.  and 
even  where  there  is  an  actual  submission,  it  may  be  revoked 
at  any  time.  The  law  allows  the  party  up  to  the  last  moment 
to  ascertain  whether  there  is  not  some  covert,  bias  or  prejudice 
on  the  part  of  the  arbitrator  chosen.  It  would  hardly  accord 
with  his  scrupulous  care  to  secure  fairness,  in  such  cases,  that 
parties  should  be  legally  bound  by  the  sort  of  engagement  that 

■Elkhart  Mutual  -v.  Houghton,  98  'Austin  v.  Searing,  1f>  X.  Y.  112, 
End.  L49;  Supreme  Lodged.  Schmidt,  123:  sec  Strasserv.  Staats,  18  N.  Y. 
98  Ind.  874;  Supreme  Council  v.  For-  Supp.  167;  Railway  Association  v. 
singer,  125  Ind.  53;  25  N.  Bast.  Rep.  Robinson*  147  III.  188;  85  X.  East. 
129;  see§  112:  Bee  §   19.  Rep.  1(58;  S.  C,  38  111.  App.  ill. 

•  Poultney  v.  Bachman,  10  Abb.  X. 
Cas.  252;  Daniher  v.  Grand  Loilge 
(Utah)  :;?  l'ac.  Rep.  845. 


60S  ACTION    ON   CONTRACT    OF    SOCIETY. 

exists  here,  by  which  the  most  extensive  judicial  powers  are 
conferred  upon  bodies  of  men  whose  individual  members  are 
subject  to  continual  fluctuation."  In  Scott  v.  Avery,1  the 
Lord  Chancellor  said  :  "  There  is  no  doubt  of  the  general 
principle  that  parties  can  not  by  contract  oust  trie  ordinary 
courts  of  their  jurisdiction.  That  has  been  decided  in  many 
cases." 

The  articles  of  association  of  a  society  contained  the  follow- 
ing clause  :  "  The  directors  shall  have  full  power  *  *  to 
adjust,  settle  and  decide  all  claims  and  demands  upon  the 
society  by  the  members  thereof;  or  to  decide  and  determine 
all  disputes,  controversies,  and  matters  arising  between  the 
society  and  members  of  the  society  concerning  insurances  or 
claims  upon,  or  liabilities  by  or  to  the  society,  and  concerning 
the  laws,  rules,  regulations  and  by-laws  of  the  society;  and  the 
decision  of  the  directors  shall  be  final  and  conclusive,  as  well 
upon  the  society  as  the  members  thereof;  and  no  member  of 
the  society  shall  be  allowed  to  bring  or  have  any  action,  suit 
or  proceeding,  or  other  remedy  against  the  society  or  the 
members  thereof,  for  any  claims  or  demands  upon  or  in 
respect  of  the  society  or  the  members  thereof."  On  the  author  ■ 
ity  of  Scott  v.  Avery,  supra,  it  was  held  that  an  action  at  law 
might  be  maintained  against  the  society  on  a  contract  of 
insurance.2  In  another  case  it  was  said:3  "While  parties  may 
impose  as  condition  precedent  to  applications  to  the  courts 
that  they  shall  first  have  settled  the  amount  to  be  recovered 
by  an  agreed  mode,  they  can  not  entirely  close  the  access  to 
the  courts  of  law.  The  law,  and  not  the  contract,  prescribes 
the  remedy,  and  parties  have  no  more  right  to  enter  into 
stipulations  against  a  resort  to  the  courts  for  their  remedy  in 
a  given  case  than  they  have  to  provide  a  remedy  prohibited 
by  law.  .  Such  stipulations  are  repugnant  to  the  rest  of  the 
contract  and  assume  to  divest  courts  of  their  established  juris- 
diction. As  conditions  precedent  to  an  appeal  to  the  courts, 
they  are  void."     The  opinion  of  the  supreme  court  of  the 

1  5  House  of  Lords  Cas.  811.  38;  Noyes  v.  Marsh,  123  Mass.   286; 

2  Edwards  v.  Ins.  Soc,  L.  R.,  1  Q.  McGunn  v.  Hamlin,  29  Mich.  476, 
B.  Div.  563,  592,  598;  see  Hill  v.  481;  Contee  v.  Dawson,  2  Bland  Ch. 
More,  40  Me.  515;  March  v.  Railroad,  (Md.)  264,  276;  Cooke  v.  Cooke,  L. 
40  N.  H.   548;  Smith  v.  Railroad,  36  R.,  4  Eq.  Cas.  77. 

N.  H.  458,  487;  Pearl  v.  Harris,  121  3  Stephenson  v.  Ins.  Co.,  54  Me.  70. 
Mass.  390;  Vass  v.  Wales,  129  Mass.  , 


ACTION   ON   CONTRACT    OF    SOCIETY.  009 

United  States  upon  this  question  is  shown  by  the  following 
language : l  "  Every  citizen  is  entitled  to  resort  to  all  the 
courts  of  the  country,  and  to  invoke  the  protection  which  all 
the  laws  or  all  those  courts  may  afford  him.  A  man  may  not 
barter  away  his  life,  or  his  freedom,  or  his  substantial  rights. 
In  a  criminal  case  he  can  not  be  tried  in  any  other  jmanner 
than  by  a  jury  of  twelve  men,  although  he  consent  in  open 
court  to  be  tried  by  a  jury  of  eleven  men.  In  a  civil  case  he 
may  submit  his  particular  suit  by  his  own  consent  to  an  arbi- 
tration, or  to  the  decision  of  a  single  judge.  So  he  may  omit 
to  exercise  his  right  to  remove  his  suit  to  a  federal  tribunal, 
as  often  as  he  thinks  fit,  in  each  recurring  case.  In  these 
aspects  any  citizen  may,  no  doubt,  waive  the  rights  to  which 
he  may  be  entitled.  He  can  not,  however,  bind  himself  in 
advance  by  an  agreement,  which  may  be  specifically  enforced, 
thus  to  forfeit  his  rights  at  all  times  and  on  all  occasions, 
whenever  the  case  may  be  presented."  2 

§  317a.  Arbitration  clauses. — Clauses  requiring  that  all 
differences  or  matters  of  dispute  arising  under  contracts  of  life 
and  accident  insurance  shall  be  submitted  to  arbitration  are 
sometimes,  though  not  often,  contained  in  such  contracts. 
There  are  man}'  decisions  on  the  construction  and  effect  to  be 
given  to  the  exact  language  in  which  such  provisions  have 
been  framed.  An  agreement  that  any  matter  of  dispute  be- 
tween the  society  and  a  claimant  for  benefits  under  the  con- 
tract shall  be  submitted  to  arbitrators  is  void,  and  will  not 
prevent  the  claimant  from  maintaining  a  suit  at  law  or  in 
equity,  in  the  first  instance,  to  enforce  his  rights  under  it.3 

1  Home  Ins.  Co.  v.  Morse,  20  Wall.  Laws,  31;  Street  v.  Rigby,  6  Ves.  818; 

445;  Barron  v.   Burnside,  121  U.   S.  Gourlay  v.   Somerset,    19  Ves.    431; 

186:  Nichols  v.  Clialir.  I  I  Ves.  271 :  2  Pars. 

'SeeNntev.  Hamilton  Mutual,  6  Corit.  707;  Reed  v.  Ins.  Co.,  188 Mask 

Gray   (Mass.)   174;   Hall  v.    People's  575;  1  Story  Eq.  Jur.  £670;  Gere  v. 

Mutual.  6  Gray  185;  Boynton  v.  Ins.  Ins.  Co.,  67  Iowa.  272;  German   Ins. 

Co..  4  Met.  212;  Reichardv.  Ins.  Co.,  Co.  v.  Steiger,   109  111.   254;  Nurney 

81  Mo.  518.  v.  Ins.  Co.,  63  Mich.    633;  30  N.  W. 

^Insurance  Co.  v.  Morse,  20  Wall.  Rep.  350;  Liverpool  v   Creighton,  51 

445;  Kinney   v.   Association.   35   W.  Ga.  95;  Phoenix  v.  Badger,    58  Wis. 

Va.  885;   14  S.  Hast.  Rep.  8;  Stephen-  288;  Williams  v.  Ins.  Co.,  54Cal.  442; 

son  v.  Ins.  Co.,  54  Me.  70;  Cobb  v.  Ins.  Whitney    v.    Association,    52    Minn. 

Co..    6  (Way   192;  Smith  v.  Associa-  378;  54  N.  W.  Rep.  184. 
tion,  51  Fed.  Rep.  520;  2  Tuck.  Com. 


610  ACTION   ON    CONTRACT    OF    SOCIETY. 

Courts  of  general  jurisdiction  have  by  the  law  of  the  land  a 
right  to  take  cognizance  of  such  controversies,  and  parties  may 
not  by  contract  oust  them  of  such  jurisdiction. .  But  parties 
may  by  contract  make  the  decision  of  arbitrators,  or  of  any 
third  person,  a  condition  to  a  right  of  action,  for  such  a  con- 
tract contemplates  a  submission  to  court  of  the  controversy, 
and  merely  makes  the  decision  of  the  arbitrators,  or  third  per- 
son, a  condition  precedent  to  the  right  to  sue.1  Unless,  how- 
ever, the  stipulation  is  definite  and  explicit  that  no  action  shall 
be  brought  until  an  arbitration  is  made,  courts  will  not  hold 
it  to  be  a  condition  precedent  to  a  right  of  action.2  The  decis- 
ions of  the  courts  on  arbitration  clauses  are  conflicting,  and 
those  of  the  state  in  which  the  controversy  is  pending  must  be 
examined  in  order  to  determine  the  rule  which  will  be  there 
enforced.  The  decided  weight  of  authority  is  to  the  effect  that 
though  the  question  of  the  liability  of  the  society  on  the  con- 
tract is  not  a  proper  one  to  require  parties  to  submit  to  arbitra- 
tion under  the  terms  of  such  a  contract,  yet  the  agreement  to 
submit  collateral,  incidental  and  special  facts  for  the  decision 
of  arbitrators  will  be  upheld. 

§  318.  Actions  on  by-laws  for  benefits. — In  an  action 
against  a  mutual  benefit  society  for  the  recovery  of  sick  bene- 
fits, the  burden  of  proof  is  on  the  plaintiff  to  establish  a  by- 
law, rule  or  custom  rendering  the  society  liable  for  such  sick 
benefits.3  An  action  may  be  maintained  by  a  member  of  a  mu- 
tual benefit  society  upon  a  by-law  of  the  society  agreeing  to  pay 
benefits  to  members  in  case  of  sickness.  In  such  an  action  the 
by-law  is  the  basis  and  foundation  of  the  suit,  and  it  is  not  a 
sufficient  averment  that  "  it  is  a  rule  of  the  association  that 
every  member  in  good  standing  when  sick  shall  be  entitled  to 
sick  benefits."  A  mere  rule  is  a  thing  which  can  be  abrogated  at 
the  pleasure  of  the  association,  and  has  not  the  binding  force 

1  Condon  v.  Company,  14  Grat.  (Va.)  v.  Association,  154  Mass.  77;  27  N. 
314;  Scott  v.  Avery,  36  Eng.  Law  and  East.  Rep.  769;  Morley  v.  Ins.  Co.,  85 
Eq.  1;  Mentz  v.  Ins.  Co.,  79  Pa.  St.  Mich.  210;  48  N.W.Rep.  502;  Camp- 
478;  Hamilton  v.  Ins.  Co.,  136  U.  S.  bell  v.  Ins.  Co.,  1  McArthur,  246;  2 
242;  10  Sup.  Ct.  Rep.  945;  Wood  v.  Big.  L.  &  A.  Cases,  16. 
Humphrey,  114  Mass.  185;  Carroll  v.  3  Mullally  v.  Irish  Am.  Ben.  Soc, 
Ins.  Co.,  72  Cal.  297;  13  Pac.  Rep.  863.  6  Pac.  Rep.  78,  decided  by  Supreme 

2  Smith  v.  Association,  supra;  Kin-  Court  of  California,  but  not  reported 
ney  v.  Association,  supra;  Crossley  v.  in  California  Reports. 

Ins.  Co.,  27  Fed.  Rep.  30;  Badenfeld 


ACTION    ON    CONTRACT    OF    SOCIETY.  611 

of  a  contract  between  the  corporation  and  its  members.1 
"Where  it  is  provided  in  the  by-laws,  as  a  prerequisite  to  recov- 
ery of  benefits,  that  the  member  applying  shall  furnish  a  phy- 
sician's certificate  to  the  "  sick  committee,"  it  must  be  fur- 
nished before  an  action  will  lie  to  recover  such  benefits.  The 
mere  exhibition  of  such  certificate  to  a  member  of  such  a  com- 
mittee is  not  sufficient.2  If  an  incorporated  benevolent  society, 
the  by-laws  of  which  provide  for  the  payment  of  a  weekly  allow- 
ance to  a  sick  member  upon  the  performance  of  a  certain  con- 
dition by  him,  refuses  to  fulfill  its  contract,  the  member  in- 
jured thereby  may  at  once  maintain  an  action  at  law  against 
it.  where  the  by-laws  of  the  society  make  no  provision  for  a 
tribunal  to  decide  questions  arising  between  the  society  and 
its  members.  The  by-laws  of  a  society  provide  that  a  sick 
member  on  sending  to  the  society  "  every  week  during  his  sick- 
ness "  a  certificate  signed  by  a  qualified  surgeon,  stating  his 
illness,  "  shall  be  entitled  to  a  weekly  allowance  of  five  dol- 
lars." A  member  of  the  society  was  taken  ill  in  another  state, 
and  sent  to  the  society  a  certificate  stating  his  illness,  signed 
by  a  person  who  was  in  fact  a  surgeon  in  attendance  upon 
him,  but  who  did  not  describe  himself  in  the  certificate  as  such. 
Accompanying  the  certificate  was  a  letter  from  the  member  in 
which  he  spoke  of  it  as  the  doctor's  certificate.  ISo  other  cer- 
tificate was  furnished  until  after  his  return  to  Massachusetts 
about  three  months  later,  when  he  furnished  a  certificate  that 
he  had  been  ill  since  the  date  named  in  his  first  certificate. 
In  a  suit  upon  the  by-law  providing  for  sick  benefits,  it  was 
held  that  the  first  certificate  was  a  substantial  compliance 
with  the  by-laws,  and  entitled  the  member  to  receive  an 
allowance  for  one  week,  and  that  he  was  not  entitled  to  any 
further  allowance.3  The  by-laws  of  an  incorporated  mutual 
benefit  society  provided  that  a  member  who  became  incapable 
of  working  in  consequence  of  sickness  or  accident,  should 
receive  fron  the  society  a  certain  sum  per  week;  that  he  could 
nut  receive  such  benefit  without  making  application  in  writing 
to  the  society,    nor   before  two  members  appointed    by  the 

1  Irish  Catholic  v.   O'Xhaugnessev,        sDolan  v.  Court  of  Good  Sainuri- 
76  Ind.   191;    Beneficial    Society  v.   tan,  128  Mass.  487. 
White,  30  N.  J.  Law  313. 

3  Harrington    v.    Benevolent  Soci- 
ety, 70Ga.  340. 


612  ACTION    ON    CONTKACT    OF    SOCIETY. 

president  had  visited  him  and  made  a  report  to  the  society. 
A  member  of  the  society  became  ill,  and  was  unable  to  work. 
He  gave  notice  in  writing  of  his  illness  to  the  society,  and  a 
special  committee  visited  him  and  reported  his  condition 
to  the  society.  On  a  day  named,  he  was  entitled  to  receive 
from  the  society  a  certain  sum  for  two  weeks'  illness,  which 
was  afterward  tendered  to  him.  On  that  day,  he  resumed 
work  at  his  regular  employment  and- worked  for  two  consec- 
utive da}^s,  receiving  his  wages  therefor,  but  during  the 
two  days  he  was  not  physically  in  a  fit  condition  to  work, 
and  could  only  perform  light  work,  and  not  even  .that  without 
unreasonable,  excessive  and  harmful  exertion.  During  the 
time  he  was  so  employed,  a  committee  of  the  society  visited 
his  house,  and  afterward  reported  that  he  had  returned  to 
work,  and  the  committee  was  discharged  from  further  duty. 
At  the  expiration  of  the  two  days,  he  suffered  a  relapse,  and 
was  unable  to  work  for  a  period  sufficient  to  make  four  weeks 
from  the  date  of  his  first  illness  by  including  said  two  days  in  • 
the  computation.  No  notice  of  his  illness  was  given  to  the 
society  after  the  day  when  he  so  resumed  work,  and  the 
society  took  no  action  thereon.  He  then  brought  an  action 
for  sick  benefits.  The  court  said  :  "  The  fact  of  having  done 
some  work  is  not  the  final  test.  The  by-law  must  have  a 
reasonable  construction.  A  man  recovering  from  an  illness 
of  about  three  weeks'  duration  may  justly  be  deemed  to  be 
'  incapable  of  working,'  although  by  unreasonable,  excessive 
and  harmful  effort  and  exertion,  he  succeeds  in  doing  light 
work  for  two  consecutive  days,  and  then,  by  reason  thereof, 
suffers  a  relapse.  That  the  recurrence  of  the  plaintiff's  illness 
was  a  relapse  caused  by  excessive  and  harmful  exertion,  might 
fairly  be  inferred.  The  fact  that  he  received  wages  for  those 
two  days  is  immaterial.  But  one  report  from  the  committee 
for  a  continuous  illness  is  contemplated  in  the  by-laws.  Such 
report  having  been  made,  the  plaintiff  was  not  affected  by 
what  they  did  afterward,  or  by  their  discharge."  '  The  con- 
stitution of  a  mutual  benefit  society  provided  that  a  member 
"  permanently  disabled  from  following  his  or  her  usual  or 
other  occupation "  was  entitled  to  a  benefit,  and  in  another 
section  defined  such  disability  as  one  which  should  "  perma- 
1  Genest  v.  L'Union  St.  Joseph,  141  Mass.  417. 


ACTION    OX    CONTRACT    OF   SOCIETY.  613 

nently  prevent  the  member  from  following  any  occupation 
whereby  he  or  she  can  obtain  a  livelihood."  In  construing 
these  provisions,  it  was  held  that  the  words  "  or  other  occupa- 
tion "  in  the  first  mentioned  section,  could  not  be  held  to  mean 
"  or  other  of  the  same  kind,"  and  the  definition  in  the  latter 
section  was  conclusive  against  one,  who,  disabled  in  his  own 
trade,  had  been  working  at  another  totally  dissimilar  business, 
— against  one  who,  disabled  from  following  the  occupation  of 
a  barber  was  able  to  run  a  restaurant,  or  clerk  in  a  store.' 
Where  a  member  neglects  to  make  a  claim  for  sick  benefits,  as 
provided  in-  the  by-laws,  his  administrator  may  not  recover 
them  after  his  death.4 

The  measure  of  damages  in  an  action  for  benefits  is  not 
such  amount  as  the  jurors'  conscience  may  approve  as  just,  but 
the  amount  provided  for  such  a  case  by  the  laws  of  the  society. 
A  plaintiff  can  not  recover  for  benefits  accruing  after  the  com- 
mencement of  the  action.3 

§  319.  Effect  of  expulsion  on  the  claim  of  the  expelled 
member  for  benefits. — If,  before  a  member  has  been  expelled 
from  a  society,  he  becomes  entitled  under  the  contract  of  mem- 
bership to  certain  benefits  promised  by  the  society,  his  subse- 
quent expulsion  will  not  prevent  him  from  maintaining  an 
action  for  such  benefits.4  A  legal  expulsion,  however,  at  once 
terminates  the  contract  of  membership,  and  determines  the 
member's  right  to  future  benefits.5  Where  a  member  makes 
a  claim  against  a  society  for  benefits,  and  is  expelled  because 
such  claim  is  found  to  be  fraudulent,  the  expulsion  of  the  mem- 
ber for  such  cause  is  a  bar  to  any  inquiry  by  the  courts  into 
the  merits  of  the  claim.  The  society  possessed  jurisdiction  of 
the snbject-matter  in  the  proceedings  in  expulsion,  and,  in  ex- 
pelling the  member,  acted  in  a  judiciary  capacity.  Its  decision 
will  not  be  collaterally  inquired  into  by  the  courts,  but  will 
be  held  as  binding  between  the  parties  until  set  aside  on  appeal 
to  the  higher  tribunals  of    the    society,   or    on   application 

1  Albert  v.  ( irderof  <  Ihosen  Friends,  3  B.  &  O.  Ass'o  v.  Poet,  122  Pa.  St. 
34  Fed.  Rep.  721;  Bee  Kelley  v.  A.  O.    579;  15  Atl.  Rep.  885. 

of  H.,  9  Daly  289;  Supreme  Council  'Bachman    v.   Arbeiter-Bund,   64 

v.    Fairman,  62  Howard  Pr.  (N.Y.)  Bow.  Pr.  442. 

386.  5Pfeiffer  v.   Weiashaupt,    13  Daly 

2  Lucas  v.   Thompson,  116  Pa.  St.  151. 
815;  23  Atl.  Rep.  321. 


614  ACTION   ON   CONTRACT   OF    SOCIETY. 

for  reinstatement  in  the  courts.  So  long-  as  the  judgment 
of  expulsion  for  presenting  the  fraudulent  claim  remains 
in  force,  the  courts  will  regard  it  as  settled  between  the 
member  and  the  society,  that  the  claim  is  fraudulent  and 
without  merit.  The  plaintiff,  a  member  of  the  defendant 
lodge,  claimed  certain  benefits  on  account  of  alleged  disa- 
bility, but  the  same  were  denied  by  the  lodge,  and  he  ap- 
pealed to  the  grand  master  under  the  rules  of  the  order,  who 
reversed  the  decision  of  the  lodge,  but  the  lodge  appealed, 
under  the  rules,  to  the  grand  lodge;  and  meanwhile  the  defend- 
ant lodge  had  expelled  the  plaintiff  for  fraud  and  deceit  prac- 
ticed in  his  efforts  to  receive  the  benefits  in  question,  and  this 
action  of  the  defendant  lodge  was  also  carried  by  appeal  to  the 
grand  lodge,  and  the  grand  lodge  considered  the  last  appeal 
first,  and  found  plaintiff  guilty  of  fraud  and  deceit  as  alleged, 
and  sustained  the  action  of  the  defendant  lodge  in  expelling 
him  therefor,  and  afterward  the  grand  lodge  further  refused  to 
consider  the  first  appeal  because  the  merits  of  the  cases 
were  involved  in  and  determined  by  the  decision  of  the  second 
appeal.  The  court  held  that  these  facts  constituted  an  adjudi- 
cation of  the  question  involved  in  the  first  appeal,  to  the  effect 
that  plaintiff  was  not  entitled  to  the  benefits  claimed,  and  that 
upon  a  showing  of  these  facts,  the  district  court  properly  dis- 
missed the  action  brought  to  recover  the  amount  of  such  bene- 
fits from  the  defendant  lodge.1  Where,  by  the  by-laws  of  a 
mutual  benefit  society,  it  is  provided  that  if  the  insured  mem- 
ber misrepresent  his  habits  as  temperate,  the  board  of  directors, 
upon  hearing,  may  drop  his  name  from  membership,  the  action 
of  the  board  upon  the  charge  is  conclusive  and  res  adjudicate, 
and  it  may  not  be  inquired  into  in  a  suit  on  the  certificate  of 
membership  after  the  death  of  the  insured.2  Where  a  mem- 
ber has  been  expelled  from  a  voluntary  society,  he  may  not 
collaterally  question  the  rightfulness  of  his  expulsion  by  a  suit 
to  recover  the  benefits  to  which  he  would  otherwise  have  been 
entitled.  He  must  first,  if  unjustly  expelled,  procure  his  res- 
toration to  membership.3 

1  Woolsey  v.  I.  O.  O.  F.,  61  Iowa  3Anacosta  Tribe  v.  Murbach,  13 
492;  see  Society  v.  Vandyke,  2  Md.  91 ;  Society  v.  Vandyke,  2  Whar- 
Wharton  (Pa.)  309.  ton  (Pa.)  309;  see  §§  52,  53,  319. 

a  Jones  v.  Association,  84  Ky.  110; 
2  S.  W.  Eep.  447. 


CHAPTER  XXIV. 

ACTION  ON  THE  CONTRACT  OF  THE  SOCIETY. 

§  320.    Limitation  as  to  the  time  when  an  action  may  he  brought. 

321.  Limitation  as  to  the  place  where  an  action  may  be  brought. 

322,  323.     Pleading  and  evidence. 
324.     Competency  of  witnesses. 

335.  Admissibility  of  the  declarations  of  a  member. 

326.  Proofs  of  death . 

327.  Attachment  of  benefit  fund,  garnishment. 

328.  When  fund  may  or  may  not  be  attached. 

§  320.  Limitation  as  to  the  time  when  an  action  may  he 
brought. — A  mutual  benefit  society  may,  by  proper  provisions 
of  its  charter,  by-laws  or  certificates,  stipulate  that  any  claim 
for  benefits  shall  be  made  within  a  given  period  of  time,  or 
that  no  action  against  the  society  for  the  recovery  of  any  claim 
upon  the  contract  shall  be  maintained,  unless  commenced 
within  a  certain  period  after  the  cause  of  action  shall  have 
accrued.  As  the  statutes  of  limitation  only  provide  that  no 
suit  shall  be  brought  on  a  claim  after  a  certain  number  of 
years,  there  is  nothing  in  these  acts  abridging  the  right  of 
parties  to  contract  for  a  shorter  limitation  of  time.  Such  lim- 
itations are  strictly  construed  and  must  be  reasonable.  Pro- 
visions of  statutes  of  limitation  relative  to  the  bringing  of  a 
second  action  within  a  year  after  the  reversal  of  the  first,  or 
after  the  plaintiff  shall  have  suffered  a  non-suit,  are  irrelevant 
and  do  not  apply,  where  a  special  limitation  is  agreed  upon  in 
the  contract  of  insurance.1  The  contract  in  such  a  case  relieves 
the  parties  from  the  general  limitations  of  the  statute,  and,  as 
a  consequence,  from  its  exceptions  also.  It  is  well  settled  that 
a  partial  paymenl  takes  the  case  out  of  the  statute  of  limita- 
tion as  to  the  remainder  of  the  demand,  and  that  as  to  such 
remainder  the  statute  begins  to  run  only  from  the  date  of  the 

1  Howard  Ins.  Co.  v.  Hocking,  180  v.  Ins.  Co.,  74 U.  S.  886;  Wilkinson  v. 
Pa.  St.  170;  18  Atl.  Rep.  61  I:  Willson  Ins.  Co.,  72  X.  Y.  199;  Arthur  v.  Ins. 
v.  Ins.  Co.,  27  Vt.  99;  Riddlesbarger   Co.,  78  N.  Y.  462. 

(615) 


616  ACTION   ON    CONTRACT   OF   SOCIETY. 

payment.  A  limitation  by  contract  is  governed  by  the  same 
principle.  The  partial  payment  will  take  the  case  out  of  the 
agreed  period'  of  limitation,  and  it  will  begin  to  run  again 
from  the  time  of  the  payment.1 

Where  an  insurance  company  does  nothing  to  induce  delay 
in  bringing  suit,  the  statute  of  limitations  begins  to  run  in  its 
favor  from  the  time  it  notifies  a  claimant  that  his  claim  is 
rejected.2  Where  the  certificate  of  a  mutual  benefit  society 
provides  that  all  suits  to  recover  benefits  under  it  shall  be 
begun  within  six  months  after  the  death  of  the  member  in- 
sured, and  within  that  time  an  injunction,  enjoining  the  bene- 
ficiary from  receiving  payment,  prevents  him  from  beginning 
suit  until  after  the  expiration  of  the  six  months,  the  six 
months'  limitation  no  longer  exists  after  the  removal  of  the 
injunction,  and  suit  may  be  brought  at  any  time  within  the 
statute  of  limitations.3  This  contract  period  does  not  open 
and  expand,  like  the  period  of  limitations  imposed  by  statute, 
so  as  to  receive  within  it  a  period  of  legal  disability,  and  then 
close  together  at  each  end  of  that  period,  as  though  the  period 
of  legal  disability  had  never  occurred;  the  contract  period 
relates  to  the  six  months  next  after  the  loss,  and  the  court  has 
no  right,  as  in  the  case  of  a  statute,  to  construe  it  into  a  num- 
ber of  days  equal  to  six  months,  made  up  of  the  days  in  a 
period  of  time  prescribed  by  the  statute  of  limitations,  in 
which  the  plaintiff  may  commence  his  suit.  In  such  a  case, 
where  a  cause  intervenes  which  prevents  the  plaintiff  from 
suing  before  the  specified  contract  period  expires,  the  contract 
bar  can  not  be  afterward  revived,  but  is  absolutely  removed, 
and  the  plaintiff  is  then  only  bound  by  the  limitation  pre- 
scribed by  statute.4  Where  the  duly  authorized  agent  of  a 
company,  before  the  expiration  of  the  limitation  fixed  by  the 
contract,  led  the  beneficiary  to  believe  that  the  loss  would  be 
paid  without  suit,  and  thereby  induced  him  not  to  sue  within 
that  period,  the  limitation  will  be  disregarded,  though  the  con- 
tract also  provides  that  no  act  of  the  company,  its  officers  or 
agents,  shall  be   deemed  a  waiver   of  any  of  its   conditions, 

1  Kentucky  Mutual  v.  Turner.  89  3  Earnshaw  v.  Society,  68  Md.  465; 

Ky.  665;  13  S.  W.  Rep.  104.  12  Atl.  Rep.  884. 

'2  Railway  Ass'n  v.  Loomis,  142  111.  4  Senimes  v.  Ins.  Co.,  13  Wall.  158. 
560;  32  N.  East.  Rep.  424. 


ACTION    ON    CONTRACT    OF    SOCIETY.  GIT 

unless  it  be  "  in  writing,  signed  by  the  president  or  secretary 
of  the  company."  ' 

If  the  delay  to  bring  suit  within  the  designated  period  is  a 
result  to  which  the  society  mainly  contributed  by  holding  out 
hopes  of  an  amicable  adjustment,  it  will  not  be  permitted  to 
take  advantage  of  such  delay;  and  if,  after  the  expiration  of 
such  period,  it  enters  into  any  negotiations  with  the  benefici- 
ary whereby  it  recognizes  the  continued  validity  of  the  cer- 
tificate, it  will  be  held  to  have  waived  its  right  to  plead  the 
limitation.2  Repeated  promises  from  time  to  time  that  pay- 
ment or  settlement  will  be  made,  and  declarations  that  there 
is  no  need  of  proceeding  by  law  to  enforce  payment,  are  a  suf- 
ficient excuse  for  not  prosecuting  the  claim  against  a  society.3 
If  the  beneficiar}T  is  induced  to  delay  his  action  on  a  certificate 
by  the  fraud  of  the  society,  or  by  its  holding  out  the  reasona- 
ble hope  of  payment,  the  limitation  will  be  disregarded.'  But 
mere  negotiations  for  a  settlement  are  not  sufficient  to  show 
a  waiver  of  the  limitation  of  time/  AVhile  any  act  which 
tmds  to  mislead  the  beneficiary,  when  the  parties  are  dealing 
on  friendly  terms  in  order  to  avoid  litigation,  will  be  held  to 
be  evidence  of  a  waiver  of  a  limitation  specified  in  the  con- 
tract, it  must  be  remembered  that  after  suit  has  been  brought 
and  the  parties  are  dealing  at  arms-length,  the  rule  does  not 
apply  with  the  same  strictness,  and  much  more  positive  evi- 
dence of  actual  misleading,  if  not  of  intent  to  mislead,  is  nec- 
essary to  prove  a  waiver  by  estoppel.  In  an  action  against 
it,  a  society  may  omit  any  special  defense,  and  make  only  such 
as  it  shall  think  sufficient  to  defeat  the  plaintiff.  If  it  suc- 
ceeds, it  may  urge  its  special  defenses  in  a  second  action,  for 
by  risking  its  defense  upon  one  ground,  it  does  not  waive  its 
right  in  another  suit  to  urge  other  grounds.  Thus,  a  former 
suit  on  a  contract  of  insurance  was  brought  within  sixty  days 
after  the  furnishing  of  proofs  of  loss,  and  was  held  l>y  the  su- 
preme court  to  be  premature.      In  a  second  action  it  was  held. 

1  Dwelling-House  las.  Co.  v.  Bro-  1st:  f  t.  Paul  F.  &  M.  Ins.  Co.  v.  Me- 
dio, 52  Ark.  11:  US.  W.  Rep.  101(5.  Gregor,  63  Texas  899i 

•Martin  v.  Ins.  Co.,   44  N.  J.  L.  *Derrickv.  Lamar  Ins.  Co., 74  111. 

185;  Jennings  v.   Ins.  Co.,  148  Mass.  404;  Little  v.  Phoenix   Ins.  Co..  128 

61;  is  X.  East.  Rep.  <-><>i.  Mass.  880. 

aHomeIns.  Co.  v.  Myer.  93  111.  271:  Allnnania    Ins.  Co.    V.  Little,    20 

Andes  Ins.  Co.  v.  Fish,  71   111.  620;  111.   A.pp.  131. 
Bish  v.  Hawkeye  Ins.  Co.,  69  Iowa 


618  ACTION   ON   CONTRACT   OF    SOCIETY. 

that  the  fact  that  the  issue  on  which  the  former  case  was  finally 
decided  was  not  raised  in  the  pleadings,  so  as  to  afford  the 
plaintiff  an  opportunity  to  dismiss  and  bring  a  new  suit  after 
the  sixty  days  and  within  the  stipulated  twelve  months,  but 
was  held  back  by  the  society  until  the  trial,  after  the  twelve 
months  had  elapsed,  did  not  waive  the  stipulated  limitation  in 
favor  of  a  second  action  brought  after  the  twelve  months  had 
passed.1  Where  the  contract  of  insurance  provides  that  no  ac- 
tion on  the  contract  may  be  maintained,  "  unless  commenced 
within  six  months  after  the  loss," — "  unless  commenced  within 
one  year  after  any  claim  shall  accrue,"  "  unless  com- 
menced within  a  term  of  twelve  months  next  after  the  loss  or 
damage  shall  occur,"  etc.;  and  further  provides  that  a  loss 
shall  not  be  payable  until  a  certain  time  after  the  proofs  of 
loss,  or  of  death,  have  been  furnished,  the  period  of  limitation 
does  not  bssin  to  run  until  the  certain  time  fixed  after  the 
proofs  have  been  furnished.  The  limitation  begins  to  run 
from  the  date  of  proof  of  loss  or  death,  and  not  from  the  date 
of  loss  or  death.2 

Where  an  accident  insurance  company,  by  its  certificate, 
undertakes  to  pay  the  insured  certain  amounts  in  case  of 
bodily  injury,  and,  in  case  of  death  resulting  from  such  an  in- 
jury, to  pay  to  the  wife  of  the  insured  a  certain  sum,  and  the 
certificate  further  specifies  that  no  suit  shall  be  brought  to 
recover  any  sum  unless  commenced  within  one  year  from  the 
time  of  the  alleged  accidental  injury,  an  action  may  be 
brought  on  the  policy  by  the  widow  of  the  insured  more  than 
one  year  after  the  accident,  if  it  is  brought  within  one  year 
after  the  insured's  death,  since  the  widow's  right  of  action 
does  not  accrue,  and  the  prescribed  period  of  limitation  begin 
to  run  against  her,  until  the  death  of  the  insured.3 

1  Howard  Ins.  Co.  v.  Hocking,  130  (Pa.)  86;  Spare  v.  Home  Mutual,  17 

Pa.  St.  170;  18  Atl.  Rep.  614.  Fed.  Rep.  5(38:  Friezen  v.  Allemania 

2Steen  v.  Ins.  Co.,  89  N.  Y.  315;  Ins.  Co.,  30  Fed.  Rep.  352;  Vette  v. 

May  on  Insurance,  §  479;  2  Wood  on  Clinton  Ins.  Co.,  30  Fed.  Rep.  668; 

Insurance,  pg.  1029;  Cooper  v.  Asso-  Barber  v.  Ins.  Co.,  16  W.  Va.  658; 

ciation,  10  N.  Y.  Supp.  748;  Hay  v.  but  see  Johnson  v.  Ins.  Co.,  92  111. 

Star  Ins.  Co.,  77  N.  Y.  235;  Ellis   v.  91,  and  Refining  Co.  v.  Ins.  Co.,  12 

Council  Bluffs  Ins.  Co.,  64  Iowa  507;  Ont.  App.  418. 

Killips  v.  Putnam  Ins.  Co.,  28  Wis.  3 Cooper  v.  Association,  132  N.  Y. 

472;  Chandler  v.  St.  Paul  F.  &  M.  334;  30  N.  East.  Rep.  833;    affirming 

Ins.  Co.,  21  Minn.  85;  Mutual   A.  &  10  N.  Y.  Supp.  748. 
L.  Ass'n   v.  Kayser,  14  W.  N.  Cas. 


ACTION    ON   CONTRACT    OF    SOCIETY.  G19 

A  certificate  of  membership  in  a  mutual  benefit  society 
merely  stated  that  a  certain  person  was  a  member,  but  named 
no  person  as  beneficiary.  The  member  died  intestate,  leaving 
a  widow.  The  by-laws  of  the  association  provided  that  ben- 
efit money  might  be  disposed  of  by  will,  otherwise  to  be  paid 
to  the  member's  widow.  It  was  held  that,  as  parol  evidence 
was  necessary  in  order  to  prove  that  the  widow  was  entitled 
to  the  benefit  money,  the  contract  was  not  a  written  one, 
within  the  meaning  of  Rev.  St.  c.  83,  §  15,  which  bars  in  five 
years  actions  on  unwritten  contracts.1 

§  321.  .  Limitation  as  to  the  place  where  an  action  may 
be  brought. — It  is  a  well  settled  maxim  that  parties  can  not 
by  their  consent  give  jurisdiction  to  courts  where  the  law  has 
not  given  it,  and  it  seems  to  follow  from  the  same  course 
of  reasoning  that  parties  can  not  take  away  jurisdiction  where 
the  law  has  given  it.2  In  one  case  it  was  said  :  "  The  rules  to 
determine  in  what  courts  and  counties  actions  may  be  brought, 
are  fixed  upon  consideration  of  general  concurrence  and  expe- 
diency by  general  law;  to  allow  them  to  be  changed  by  the 
agreement  of  parties  would  disturb  the  symmetry  of  the  law, 
and  interfere  with  such  convenience.  Such  contracts  might 
be  induced  by  considerations  tending  to  bring  the  administra- 
tion of  justice  into  disrepute;  such  as  the  greater  or  less  intel- 
ligence and  impartiality  of  judges,  the  greater  or  less  integrity 
and  capacity  of  juries,  the  influence,  more  or  less,  arising 
from  the  personal,  social  or  political  standing  of  parties  in  one 
or  another  county.  It  might  happen  that  a  mutual  insurance 
company,  in  which  every  holder  of  a  policy  is  a  member  and, 
of  course,  interested,  would  embrace  so  large  a  part  of  the  men 
of  property  and  business  in  the  county,  that  it  would  be  diffi- 
cult to  find  an  impartial  and  intelligent  jury.  *  *  There 
being  no  authority  upon  which  to  determine  the  case,  it  must 
be  decided  upon  principle.  The  question  is  not  without  diffi- 
culty, but,  upon  the  best  consideration  the  court  have  been 
able  to  give  it,  they  are  of  opinion  that  it  is  not  a  good  defense 

'Railway  Ass'n    v.   Loomis,    142  'Hall  v.   People's  Mutual,  6   Gray 

111.  560;  82  N.  East.  Rep.    124;    Kanz  (Mass.)  185;    Bee    Bartlett    v.    Union 

v.  Great  Council,   L8  Mo.  A.pp.  841;  Mutual.  16  Me.500;  Reichardv.Man* 

Carr  v.  Thompson,  67  Mo.  472;  Kin-  hattan  Ins.  Co..  81   Mo.  "11s:  Auk-/ 

sey  v.  Louisa  County.  :s7  towa,  488;  bury  et  al.  \.  Ins.  Co., 6  Gray  (Mass  j 

Works  v.  Macalister,  40  Mi<  h,  84.  596. 


620  ACTION    ON    CONTRACT    OF    SOCIETY. 

to  this  action,  that  it  was  brought  in  the  county  of  Suffolk,' 
and  not  in  the  county  of  Essex." :  An  agreement  in  a  contract 
of  insurance,  that  the  insured  waives  the  right  to  bring  an  ac- 
tion on  it  except  in  the  courts  of  the  state  incorporating  the 
company,  is  void  as  against  public  policy.8  But  under  some 
circumstances  and  conditions  limitations  upon  the  place  of 
bringing:  actions  have  been  held  valid.3 

§  322.  Pleading  and  evidence. — Independent  of  statutory 
provisions,  the  rules  of  pleading  are  the  same  in  their  applica- 
tion to  contracts  of  insurance  as  to  other  contracts.  The  con- 
tract, or  policy  of  insurance,  must  be  declared  on  in  haec  verba, 
or  according  to  its  legal  effect;  the  plaintiff's  interest  in  the 
subject  of  insurance;  the  payment  of  the  premium;  the  incep- 
tion of  the  risk;  the  performance  of  any  precedent  condition, 
or  warranty  contained  in  the  policy,  and  the  loss  or  happen- 
ing of  the  event  on  which,  within  the  terms  and  meaning  of 
the  policy,  the  liability  of  the  insurer  attaches,  must  be  al- 
leged.4 

The  statutes  in  most  of  the  states  regulate  to  some  extent 
the  necessary  averments  in  declaring  on  a  contract  of  insurance. 
In  a  suit  on  a  policy  of  life  insurance,  procured  by  the  in- 
sured for  the  benefit  of  another,  it  is  not  necessary  that  the 
declaration  should  aver  that  the  beneficiary  had  any  interest 
in  the  life  of  the  insured,  but  a  different  rule  prevails  where 
one  procures  an  insurance  on  the  life  of  another.  In  such  a 
case,  the  plaintiff  must  aver  in  his  declaration  the  facts  show- 
ing that  he  had  an  insurable  interest  in  the  life  insured.5  The 
same  rule  prevails  in  suits  on  contracts  of  insurance  in  mutual 

1  Nute  v.  Ins.  Co.,  6  Gray  (Mass.)  19  Pac.    Rep.  337;  Hefferman  v.  Su- 

174.    The  contract  provided  that  any  preme  Council,  40    Mo.    App.    605; 

action  on  it  should  "  be  brought  at  a  Pierce  v.    Ins.    Co..  138  Mass.   151; 

proper  court  in  the  county  of  Essex."  Brittv.  Ins.  Co.,  105  N.  C.  175;  10  S. 

"Eeichard  v.  Ins.  Co.,  31  Mo.  518;  E.  Rep.    896;   Price   v.   Ins.    Co.,  17 

see  Matt  v.  Association,  81  la.  135;  Minn.   497;  McLean  v.   Society,  100 

46  N.  W.  Rep.  857.  Ind.  127;  Mutual  Benefit  v.  Cannon, 

•"Boynton  v.  Middlesex  Mutual  Fire  48  Ind.  264;  Excelsior  Mutual  v.  Rid- 

Ins.  Co.,  4  Met.  (Mass.)  212;  Arnet  v.  die,  91  Ind.  84;  Richards  v.  Ins.  Co., 

Milwaukee  Mutual,  22  Wis.  516.  80  Cal.  505;  Phoenix  Ins.  Co.  v.  Rad- 

4  The  rule    is  thus  concisely  laid  din,  120  U.  S.  183. 
down  in  Brooklyn  Ins.  Co.  v.  Bled-       "Guardian  Mutual    v.   Hogan,  80 

soe,  52  Ala.    538;  see  also  Kaw  Life  111.  35;  Franklin  Life  v.   Safton,  53 

Association  v.  Lenike,  40  Kan.  142;  Ind.  380. 


ACTION    ON    CONTRACT   OF   SOCIETY.  621 

bcsnofit  societies.  A  stranger  who  obtains  a  membership  for 
another  in  any  such  society,  where  the  membership  secures 
to  him  an  insurance  upon  the  life  of  the  member,  must  aver 
and  prove  the  facts  showing  an  insurable  interest  in  the  life  of 
the  member.1  In  suits  upon  a  policy  payable  to  a  stranger,  it 
is  proper  to  leave  it  to  a  jury  to  say  whether,  under  all  the  cir- 
cumstances of  the  case,  the  contract  was  entered  into  by  the 
parties  in  good  faith,  or  as  a  means  of  procuring  a  wager  upon 
life.2  The  mere  payment  of  premiums  by  the  beneficiary  is 
not  conclusive  evidence  that  the  policy  was  taken  out  by  him.8 
Evidence  tending  to  show  that  the  beneficiary  of  a  contract 
of  insurance  procured  insurance  to  be  effected  on  the  life  of 
the  member  in  other  societies,  is  admissible  to  show  that  the 
object  was  to  defraud  the  society.4 

Where  the  interest  of  each  beneficiary  in  the  fund  is  a  sev- 
eral interest,  one  may  sue  without  making  the  others  parties 
to  the  proceeding.  In  such  a  case  separate  actions  may  be 
maintained,  even  though  the  promise  to  pay  is  to  the  benefi- 
ciaries jointly.5  Where  a  policy  of  insurance  provides  for  the 
payment  of  different  sums  to  different  persons,  it  is  improper 
for  beneficiaries  to  join  in  one  action  to  recover  the  several 
sums  due,  but,  if  they  do,  the  court  may  order  each  benefi- 
ciary to  file  his  separate  petition,  and  defendant  to  answer 
each,  without  further  service  of  process.6  A  contract  of  insur- 
ance in  a  mutual  benefit  society  provided  that  the  money 
should  be  payable,  in  case  of  a  member's  death,  to  his  wife, 

1  Elkhart  Mutual  v.  Houghton,  98  considered  together,  they  can  not  be 
Ind.  149.  reasonably  explained  without  ascrib- 

2  Conn.  Mutual  v.  Schaefer,  94  U.  ing  a  particular  motive  to  the  perpe- 
S.  457;  Mta&  Life  v.  France,  94  U.  trator,  such  motive  will  be  consid- 
S.  561;  Swick  v.  Home  Life,  2  Dill,  ered  as  prompting  each  act." 

160;  Langdon    v.  Union    Mutual,  14       6  Emmeluth  v.  Association,  122  N. 

Fed.  Rep.  272.  Y.  180;  25  X.  East.  Rep.  384;  1  Add. 

"Tuston  v.  Hardoy,  14  Beav.   232:  Cont.  79;  1  Pare.  Cont.  11;  Van  Wart 

Armstrong  v.  Mutual   Life,  13   Rep.  v.  Price,   14  Abb.  Pr.  4,   mite:   I  lees 

71.  v.  Nellis,  1  Thump.  &  < '.  1  ls:   Eccles- 

4Whitmore  v.  Supreme  Lodge,  100  ton  v.  Clipsham,  1  Saund.  L58,     The 

Mo.  36:  18  S.  W.  Rep.  495;  Ins.  Co.  v.  words  "share  and  share  alike"'  are 

Armstrong,  117  U.  S.  598;  6  Sup.  Ct.  words  of  severance,  and  create  a  Bev- 

Rep.877.    In  the  last  case  it  was  said  :  eral    right.      Emmeluth    v.    Associa- 

••  A    repetition  of  acts   of  the  same  tion,  supra;  affirming 46  Hun  681. 
character  naturally  indicate  the  same       G  Keary  v.  Mutual  Reserve,  30  Fed. 

purpose  in  all  of  them;  and,  if  when  Rep.  359. 


622  ACTION    ON    CONTRACT    OF    SOCIETY. 

her  executors,  etc.,  as  directed  by  said  member  in  bis  application, 
"or  to  such  other  person  or  persons  as  he  might  subse- 
quently direct  by  will  or  otherwise."  In  an  action  on  the  certifi- 
cate by  the  wife,  it  was  held  that  she  need  not  allege  in  her 
complaint  that  the  deceased  member  had  not  directed  the  money 
to  be  paid  to  any  other  person,  as  that  was  a  matter  of 
defense.1  Under  the  constitution  of  a  mutual  benefit  society, 
which  provides  that  the  benefits  shall  be  paid  to  the  nearest 
relatives  of  the  deceased,  an  allegation  in  the  statement  of 
claim  that  plaintiffs  are  the  father  and  mother  of  deceased, 
"  and  his  nearest  relatives,"  is  sufficient,  without  stating  that 
deceased  did  not  leave  a  widow,  child,  or  children  him  surviv- 
ing.2 Where  a  member  has  attempted  to  change  the  designa- 
tion of  his  beneficiary,  and  the  original  beneficiary  brings  suit 
on  the  certificate,  he  must  aver  and  prove  that  the  change 
attempted  to  be  made  was  invalid.3  Where  a  benefit  certificate 
is  made  payable  to  a  certain  person  in  its  inception,  the  bur- 
den of  proof  is  upon  parties  claiming  an  assignment  of  such 
certificate  to  them  to  show  a  prima  facie  valid  transfer  of  the 
benefit  accruing  from  said  certificate  to  themselves,  in  pursu- 
ance of  the  constitution  and  by-laws  of  the  order.4 

In  a  suit  on  the  by-laws  of  a  society  for  benefits,  plaintiff 
must  state  how  the  obligation  to  pay  money  arises,  what  the 
rules  and  regulations  are,  and  that  he  has  complied  with 
them.  A  statement  of  demand,  claiming  a  balance  to  be  due 
during  plaintiff's  sickness  at  the  rate  of  $3  per  week,  "the 
sum  paid  by  the  society  to  the  sick  of  the  society,"  does  not  con- 
tain a  legal  cause  of  action.5  The  burden  is  on  the  defendant 
to  aver  and  prove  the  falsity  of  any  statement  in  the  applica- 
tion, or  that  the  contract  was  issued  contrary  to  the  by-laws 
or  rules  of  the  society,  and  this  is  true  although  the  by-laws, 
rules  and  application  may  be  set  out  in  full  in  the  complaint 
or  declaration,  and  whether  the  answers  in  the  applica- 
tion are  representations    or  warranties.     There  are  cases  in 

1  Landenschlager  v.  Association,  36  3  Masonic  Mutual  v.  Burkhart,  110 
Minn.  181;  30  N.  W.  Rep.  447;  Dennis   Ind.  189;  11  N.  East.  Rep.  449.     , 

v.  Ins.  Co.,  84Cal.  570;  Tripp  v.  Ins.  4 Henry  v.    Grand  Lodge,    15   111. 

Co.,  55  Vt.  100;  Coburn  v.  Ins.  Co.,  App.  151. 

145  Mass.  226.  6  Beneficial  Society  v.  White,  30  N. 

2  Sherry  v.  Union,  139  Pa.  St.  470;  J.  Law,  313. 
20  Atl.  Rep.  1062. 


ACTION    ON    CONTRACT    OF    SOCIETY.  G23 

conflict  with  this  rule,  but  it  is  undoubtedly  supported  by  the 
later  and  better  authorities  as  well  as  by  the  better  reason.1 
In  Piedmont  Ins.  Co.  v.  Ewing,  supra,  it  is  said  :  "  The  num- 
ber of  questions  now  asked  of  the  assured  in  every  application 
for  a  policy,  and  the  variety  of  subjects  and  length  of  time 
which  they  cover  are  such  that  it  may  be  safely  said  no  sane 
man  would  ever  take  a  policy,  if  proof,  to  the  satisfaction  of  a 
jury,  of  the  truth  of  every  answer  were  made  known  to  him 
to  be  an  indisputable  prerequisite  to  payment  of  the  sum 
secured;  that  proof  to  be  made  only  after  he  was  dead  and 
could  render  no  assistance  in  furnishing  it.  On  the  other 
hand,  it  is  no  hardship  that,  if  the  insurer  knows  or  believes 
any  of  the  statements  to  be  false,  he  shall  furnish  the  evidence 
on  which  that  knowledge  or  belief  rests.  He  can  thus  sino-le 
out  the  answer  whose  truth  he  proposes  to  contest,  and,  if  he 
has  any  reasonable  ground  to  make  such  an  issue,  he  can  show 
the  facts  on  which  it  is  founded."  In  a  suit  upon  a  contract 
of  insurance,  where  the  issue  is  as  to  the  truth  of  the  answers 
of  the  insured  in  his  application,  the  possible  action  which  the 
company  might  have  taken,  if  the  insured  had  answered 
otherwise  than  he  did,  is  inadmissible.2  In  an  action  on  a 
mutual  benefit  certificate,  made  part  of  the  petition,  when 
defendant  pleads  a  general  denial,  and  the  benefit  certificate 
is  not  introduced  in  evidence,  a  judgment  for  plaintiff  will  be 
reversed  for  want  of  evidence.3 

It  is  not  a  defense  to  an  action  on  a  contract  of  mutual 
benefit  insurance  that  the  beneficiary  has  delayed  the  bring- 
ing of  the  suit,  that  under  the  laws  of  the  society  the  amount 
of  the  certificate,  if  payable,  must  be  paid  by  assessment  on 
the  members  existing  at  the  time  of  the  member's  death  and 
on  them  only,  that  more  than  one  thousand  persons  who  were 
then  members  have,  by  death  or  otherwise,  ceased  to  be  such, 
and  that  several  thousand  other  persons  have  since  become 
members.  Assessments  to  pay  death  losses  operate  with 
reasonable  equality  upon  all  the  members.     If  a  new  mem  her 

'Piedmont  Ins.  Co.  v.   Ewing,  92       3  Knights  v.  Fortson,  7S  Texas  47o; 
U.  S.  377;  Continental  Life  v.  Rogers,    14  S.  W.  Rep.  923. 
119  111.  474;  10  N.  East.  Rep.  242. 

SN.    W.  Association    v.    Hall,   113 
111.  169;  8  N.  East.  Rep.  764. 


.624  ACTION    ON    CONTRACT    OF    SOCIETY. 

is  assessed  to  pay  an  old  loss,  the  probability  is  that  he  will 
escape  assessments  made  after  he  ceases  to  be  a  member  for 
losses  accruing  before  he  ceased  to  be  such.1 

§  323.  Where  the  plaintiff's  right  of  recovery  is  dependent 
upon  the  fact  that  the  deceased  member  was  in  good  standing 
in  the  society  at  the  time  of  his  death,  the  burden  of  proof  is 
on  the  plaintiff  to  show  such  good  standing  of  the  member.2 
In  an  action  upon  a  certificate  of  membership,  reciting  that 
the  deceased  was  a  "  beneficiary  member  in  good  standing  "  in 
the  society,  and  that  upon  his  death  a  sum  would  be  paid 
"  provided  he  be  in  good  standing  when  he  dies,"  the  certifi- 
cate is  proof  of  the  good  standing  of  the  party  named  at  the 
time  of  its  issue,  and  such  standing  will  be  presumed  to  have 
continued,  in  the  absence  of  contrary  evidence.  In  such  case, 
the  burden  is  on  the  society  to  show  that,  by  reason  of  his 
conduct,  or  his-  failure  to  comply  with  the  regulations  or  re- 
quirements of  the  society,  the  deceased  had  lost  his  good 
standing.3  Proof  that  the  society  recognized  the  decedent  as 
a  member  up  to  a  short  time  before  his  death,  in  connection 
with  the  presumption  that  all  persons  follow  such  laws,  rules 
and  regulations  as  they  are  subject  to,  is  sufficient  evidence  of 
the  £Ood  standing  of  decedent  to  maintain  the  action.1  AVhen 
the  by-laws  of  a  society  provide  that  the  quarterly  dues  shall 
be  payable  "  on  or  before  the  first  meeting  in  each  quarter  " 
in  order  to  show  that  the  member  is  not  in  good  standing  by 
reason  of  not  having  paid  his  dues  for  a  certain  quarter,  it 
must  be  shown  that  a  meeting  has  been  held  since  the  com- 
mencement of  the  quarter.  Testimony  that  the  society  holds 
meetings  every  week  is  not  enough.5  In  an  action  to  recover 
benefits  from  a  society  by  one  who  claims  that  he  is  a  member, 
the  evidence  of  its  medical  examiner  that  plaintiff  had  never 
been  examined  by  him  as  required  by  its  rules  is  admissible.6 

1  Bachmeyer  v.  Association,  82  Wis.  preme  Lodge,  28  Mo.  App.  463;  Forse 

255;  52  X.  W.  Rep.  101.  v.  Supreme  Lodge,  41  Mo.  App.  107; 

'2  Siebert  v.  Chosen  Friends,  23  Mo.  Elmer  v.  Association,  19  N.  Y.  Supp. 

App.  268.  289. 

3  See   §§    251,  252;    Millard  v.  Su-  4Lazensky  v.  Supreme  Lodge,  31 

preme  Council,  81  Cal.  340;  22  Pac.  Fed.  Rep.  592. 

Rep  864;  Mills  v.  Rebstock,  29  Minn.  6  Mills  v.  Rebstock,  29  Minn.  380; 

380;  Supreme  Lodge  v.  Johnson,  78  §§  285,  286. 

Ind.  Ill:  Stewart  v.  Supreme  Coun-  6B.  &  O.  Ass'n  v.  Post,  122  Pa.  St. 

cil,  36  Mo.  App.  319;  Mulroy  v.   Su-  579;  15  Atl.  Rep.  885. 


ACTION    ON    CONTRACT    OF    SOCIETY.  625 

Where  the  by-laws  provide  that  a  member  may  at  any  time 
withdraw  from  the  society  by  giving  notice  in  writing  of  his 
intention  to  do  so,  a  written  notice  of  withdrawal  by  the  mem- 
ber will  sever  his  relations  with  it,  though  the  society  does 
not  accept  his  resignation,  or  erase  his  name  from  its  roll  of 
members.' 

In  an  action  on  a  contract  of  insurance,  where  the  question 
of  membership  in  the  society  is  in  issue,  evidence  showing  that 
the  deceased  was  not  a  member  is  admissible,  though  his  resig- 
nation is  not  pleaded.3  Where  the  circumstances  attending 
the  admission  of  deceased  to  the  benefits  of  a  certificate  of 
insurance  were  fully  shown  by  the  testimony  of  the  secretary 
of  the  insurer,  a  refusal  to  admit  in  evidence  the  minutes  of  a 
meeting  of  the  insurer  at  the  same  time  was  not  erroneous.3 
A  provision  of  a  certificate,  that  it  shall  be  payable  only  on 
its  surrender,  is  waived  where  the  society  refuses  to  pay  solely 
on  the  ground  of  non-payment  of  assessments.4  In  an  action 
on  a  contract  of  insurance  issued  by  a  mutual  benefit  society, 
proof  by  the  society  of  its  custom  and  usage  in  the  manage- 
ment of  its  affairs  and  the  payment  of  the  assessments,  and  of 
the  decisions  of  its  officers  respecting  the  construction  of  the 
contract,  are  inadmissible.5  In  actions  on  certificates  of  mem- 
bership issued  by  mutual  benefit  societies  designed  to  secure 
the  payment  of  money  to  those  dependent  upon  their  members, 
after  the  death  of  such  members,  courts  should  construe  the 
rules  and  regulations  of  such  societies  liberally  to  effect  the 
benevolent  objects  of  their  organization,  and  that  doctrine  of 
construction  is  applicable  generally  to  rulings  on  questions  of 
evidence,  as  well  as  in  other  respects.8 

§  324.  Competency  of  witnesses. — In  Georgia,  it  was  held 
that  under  the  statute  of  that  state  relating  to  competency  of 

*  Cramer  v.  Masonic  Ass'n,  9  N.  Y.  Knights  of  Pythias,  31  Fed.  Rep.  122: 
Supp.  856;  see  .^  82.  Bauer  v.  Samson  Lodge,  L02  [nd.  863; 

*  Cramer  v.  Ass'n,  supra.  Thompson  v.  In.s.  Co.,  luj  {J.  S.  252; 
3Grossman  v.  Supreme  Lodge  of   Franklin   Ins.  Co.  v.    Humphrey,  65 

Knights  and  Ladies  of  Honor,  6  N.  Y.  Ind.  549;  Davidson  v.  Supreme  Lodge, 

S.  821.  22  Mo.  App.  268. 

4  Himmelein  v.  Supreme  Council  6  Supreme  Lodge  v.  Schmidt,  98 
(Cal.),  33  Pac.  Rep.  1130.  Ind.    374;    Erdmann    v.    Order  Her- 

5  Manson  v.  Grand  Lodge,  30  Minn,  man's  Sons.  44  Wis.  876;  Supreme 
509;  16  N.  W.  Rep.    395;  Wiggin  v.  Lodge  v.  Abbott,  82  Ind.  1. 

40 


626  ACTION    ON    CONTRACT   OF    SOCIETY. 

witnesses,  where  the  contract  in  issue  had  been  made  between 
an  incorporated  mutual  benefit  society  and  a  member,  and  the 
latter  had  died,  the  officer  or  agent  entering  into  the  same  in 
behalf  of  the  corporation  was  an  incompetent  witness;  but 
that  the  other  members  of  the  society  were  competent.1 

In  an  action  on  a  contract  of  mutual  benefit  insurance  by 
the  beneficiary,  to  whom  it  is  payable  in  express  terms,  mem- 
bers of  the  society,  who  are  subject  to  assessment  to  pay 
mortuary  benefits,  are  not  incompetent  witnesses  under  a  stat- 
ute which  declares  that  where  any  party  to  a  contract  is  dead, 
and  his  rights  therein  have  passed  to  the  litigant  who  repre- 
sents his  interest,  no  person  whose  interest  is  adverse  to  such 
decedent  shall  be  a  competent  witness  as  to  any  matter  occurring 
before  the  death.  In  such  a  case  the  deceased  never  had  any 
right  to  the  fund.  It  is  payable  to  the  beneficiary,  if  payable 
to  any  one,  and  he  takes  in  his  own  right  under  the  contract, 
and  not  as  the  representative  of  the  deceased.2  The  officers 
of  the  society  are  competent  witnesses  to  testify  as  to  the 
giving  of  a  notice  of  assessment.3 

§  325.  Admissibility  of  the  declarations  of  a  member. — 
In  ordinary  life  insurance,  where  the  contract  is  between  the 
company  and  the  beneficiary,  Avhere  a  vested  interest  passes  to 
the  beneficiary  and  the  assured  ceases  to  be  a  party  in  interest, 
it  is  held  that  the  admissions  of  the  assured  after  the  issuing 
of  the  policy  are  not  admissible  to  defeat  the  contract.4  The 
reason  upon  which  the  rule  is  founded  is  that,  after  the  con- 
tract of  insurance  is  effected,  the  assured  has  no  such  relation 
to  the  beneficiary  as  gives  him  the  power  to  affect  or  destroy 

1  Georgia  Masonic  v.  Gibson,  52  Ga.  Ohio  St.  292;  Hurd  v.  Masonic  Mu- 

640.  tual,  6  Ins.  L.  J.  792;  Mobile  Life  v. 

a  Hamill  v.  Supreme  Council,  152  Morris,  3  Lea  101;  Washington  Life 

Pa.  St.  537;  25  Atl.  Rep.  645.  v.  Haney,  10   Kans.  525;  Penn  Mu- 

3Reichenbach  v.  Ellerbe,  115  Mo.  tual  v.  Wiler,  100  Ind.  92;  Kline  v. 

588;    22    S.  W.    Rep.    572;    Bates  v.  Association,    111    Ind.    462;    Valley 

Forcht,  89  Mo.  121;  1  S.  W.  Rep.  120;  Mut.  Life  Ins.  Co.  v.  Burke,  12  Ins. 

1  Greenleaf  Ev.  416.  L.  J.  337;  Reid  v.  Ins.  Co.,  58  Mo.  421 ; 

4  Swift  v.  Mass.  Mutual,  63  N.  Y.  Valley  Mutual  v.  Tewalt,  79  Va.  421. 

186;    Eddington  v.  Mutual  Life,  67  The  declarations  of  the  assured  were 

N.  Y.  185;  Dilleber  v.  Home  Life,  69  held  to  be  admissible  in  Kelsey  v. 

N.  Y.  256;  Fitch  v.  Ins.  Co.,  59  N.  Y.  U.  S. Ins.  Co.,  35  Conn.  225;  Aveson  v. 

557;  Rawle  v.  Ins.  Co.,  27  N.  Y.  282;  Lord  Kinnard,  6  East.  188. 
Fraternal    Mutual    v.    Applegate,   7 


ACTION   ON   CONTRACT   OF    SOCIETY.  627 

it  hy  bis  statements.  But  in  contracts  of  mutual  benefit  in- 
surance where  the  contract  is  between  the  society  and  the 
member,  where  the  beneficiary  has  only  an  expectant  interest, 
and  the  member  insured  has  full  power  and  dominion  over  the 
contract  until  the  moment  of  his  death,  it  has  been  held  that 
the  reason  for  the  rule  in  ordinary  insurance  does  not  exist, 
and  that  there  is  no  escape  from  the  conclusion  that,  since  the 
beneficiary  has  no  vested  interest  in  the  contract,  the  member 
must  have  dominion  over  it,  and  that  his  declarations  are  ad- 
missible against  the  beneficiary  just  as  they  would  be  against 
his  legal  representatives. 

In  Smith  v.  National  Benefit  Society,1  the  insured  member 
had  declared  that  he  had  taken  out  the  insurance  with  intent 
to  commit  suicide.  Upon  the  admissibility  of  this  evidence 
the  court  said :  "  The  deceased  had  the  right,  with  the  con- 
sent of  the  company,  to  change  his  beneficiary  from  time 
to  time,  without  the  consent  of  such  payee  or  beneficiary. 
*  *  *  -phg  piaintiff  got  no  separate  standing  by  the 
designation  under  the  policy  before  the  date  of  the  death. 
Before  that,  the  sole  right  was  in  (the  member).  The  deceased, 
by  his  designation  of  plaintiff  as  beneficiary,  did  not  make  a 
case  to  exclude  evidence  of  his  declaration.  He  stood  as  owner 
until  he  died,  and  the  plaintiff  was  in  no  better  condition  in 
respect  to  the  policy  than  if  the  plaintiff's  representative 
had  brought  the  action.  The  case  is  therefore  different  from 
the  class  of  cases  which  hold  that  evidence  of  the  declaration 
of  an  assignor  can  not  be  received  to  impeach  the  title  of  the 
assignee."2  It  has  been  held,  however,  that  in  mutual  benefit 
insurance  the  beneficiary  of  a  certificate  is  in  legal  contempla- 
tion the  owner  of  it,  subject  only  to  the  right  of  the  member 
to  substitute  other  beneficiaries,  and  that  the  admissions  of  a 
member  made  after  the  issuing  of  the  certificate  can  not  affect 
the  validity  of  the  contract.  This  view  was  taken  in  Supreme 
Lodge  v.  Schmidt,3  where  the  court  said:  "  Hanson  was  also 
called  as  a  witness,  and  counsel  for  the  defendant  offered   to 

•51   Hun   575;  4  N.  V.  Supp.  .V„M:  hausen  v.  Association,  18  N.  Y.  Supp. 

22  N.  Y.  St.  Rep.  85'.':  affirmed,  128  B6;  Stewart  v.  Supreme  Council,  36 

N.  Y.  85;  25  N.  East.  Rep.  197.  Mo.   A  pp.  319;  Nix  v.   Donovan,   18 

8  See,    also,  Maynard    v.   Vander-  N.  Y.  Supp.  485. 

werker,  24  N.  Y.   Supp.  932;  Stein-  »98Ind.  374. 


628  ACTION   ON    CONTRACT    OF    SOCIETY. 

show  by  him  that  between  the  21st  and  25th  flays  of  August, 
1879,  he  accompanied  Schmidt,  the  decedent,  to  the  office  of 
the  supreme  master  of  exchequer,  at  the  time  he  went  to  see 
about  getting  reinstated,  and  that  he,  Schmidt,  there  admitted 
in  the  presence  of  Stumph  that  he  had  received  notice  of  as- 
sessment No.  8,  in  contest,  that  he  had  not  paid  that  assess- 
ment, and  that  he  had  been  suspended  for  its  non-payment. 
If  this  action  had  been  upon  an  ordinary  life  insurance  policy 
the  decision  of  the  court  excluding  what  was  proposed  to  be 
proven  by  Hanson  would  have  been  fully  sustained  by  the 
authorities.  This  is  conceded  by  counsel  for  the  appellant, 
but  it  is  insisted  that  the  provision  in  the  certificate  before  us, 
authorizing  Schmidt  to  make  a  different  disposition  of  the 
proceeds  by  '  will  or  otherwise '  takes  it  out  of  the  rule  ap- 
plicable to  ordinary  life  insurance  policies,  recognized  as  above, 
and  requires  us  to  consider  Schmidt  as  having  been  the  real 
owner  of  the  certificate  until  the  time  of  his  death;  that 
Schmidt  being  thus  the  real  owner  of  the  certificate  at  the 
time  fixed  in  the  offered  evidence,  it  was  competent  to  prove 
admissions  made  by  him  affecting  its  validity  as  a  chose  in 
action.  *  *  *  From  the  time  of  the  issuance  of  the  cer- 
tificate until  Schmidt's  death"  (the  beneficiaries  named  in  the 
certificate),  "  were,  in  legal  contemplation,  the  owners  of  it, 
subject  only  to  the  right  of  Schmidt  to  ultimately  substitute 
other  beneficiaries  by  will,  or  in  such  other  manner  as  the 
rules  and  regulations  of  the  order  might  permit.  But  this 
rio'ht  to  ultimately  substitute  other  beneficiaries  did  not  em- 
power Schmidt  to  destroy  the  value  of  the  certificate  in  the 
hands  of  the  appellees  by  merely  hearsay  or  irrelevant  admis- 
sions concerning  matters  in  issue  between  other  parties. 
Schmidt  having  never  exercised  the  right  of  substitution  re- 
served to  him,  we  are  justified  in  assuming  that  he  never 
intended  to  exercise  it,  and  that  as  between  the  appellees  and 
the  order,  the  former  have  been  the  absolute  owners  of  the 
certificate  ever  since  it  was  issued.  We  are,  consequently, 
unable  to  hold  that  the  alleged  admissions  of  Schmidt  to 
Hanson  in  the  presence  of  Stumph,  were  any  more  admissible 
as  evidence  in  the  case  in  hearing  than  they  would  have  been 
in  an  action  upon  a  life  insurance  policy  issued  in  the  usual 
form.     In  actions  upon  life  policies,  or  certificates  of  member- 


ACTION    ON    CONTRACT   OF    SOCIETY.  629 

ship  issued  by  mutual  societies  designed  to  secure  the  payment 
of  moneys  to  those  dependent  upon  its  members  after  the 
death  of  such  members,  courts  should  construe  the  rules  and 
regulations  of  such  societies  liberally  to  effect  the  benevolent 
objects  of  their  organization,  and  that  doctrine  of  construction 
is  applicable  generally  to  rulings  on  questions  of  evidence,  as 
well  as  in  other  respects." 

In  an  action  on  a  certificate  of  indemnity,  alleged  to  have 
been  procured  through  fraudulent  misrepresentations  of  the 
assured,  a  witness  stated  that  she  had  known  deceased  four  or 
five  years  prior  to  her  death,  and  had  "  long  ago  "  conversed 
with  her  about  her  health.  It  was  held  that  the  evidence  was 
incompetent  to  prove  declarations  by  decedent,  as  being  too  re- 
mote from  the  time  of  her  examination  by  the  physician  of  the 
insurer.1  In  an  action  by  a  beneficiary  on  a  certificate  issued  to 
a  member  of  a  mutual  benefit  society,  an  application  for  rein- 
statement, made  by  the  member,  is  not  competent  evidence  to 
prove  the  fact  of  his  suspension.  A  member  may  in  any  con- 
troversy with  the  society  seek  to  avoid  litigation,  and  his  ap- 
plication will  be  considered  as  an  attempt  to  have  his  rights 
recognized  by  the  society.  Whether  or  not  his  rights  have 
been  forfeited  depends  upon  the  facts  in  the  case  and  the  pro- 
visions of  the  contract,  not  upon  the  act  of  one  of  the  parties 
in  attempting  to  adjust  the  controversy  or  upon  the  opinion 
of  one  of  the  parties  as  to  the  validity  of  the  forfeiture.  The 
statement  of  a  member  that  he  had  been  suspended  for  non- 
payment of  an  assessment,  is  not  sufficient  evidence  to  prove 
that  fact.2     If  the  fact  of  his  suspension  for  non-payment  is 

1  Grossman  v.  Supreme  Lodge,  6N.  ries."  This  law  governed  the  cases  of 
Y.  S.  821;  see  Swift  v.  Ins.  Co.,63N.  Smith  v.  Society,  8itpra,'andSteinhau- 
Y.  186;  section  18  of  chapter  175  of  sen  v.  Association,  supra,  but  it  does 
the  laws  of  1883,  provides  that  not  appear  whether  that  statute  was 
"  membership  in  any  corporation,  as-  applicable  t<>  the  Grossman  cast .  As 
sociation,  or  society  transacting  the  to  declarations  of  the  insured  in  con- 
business  of  life  or  casualty  insurance,  nection  with  an  established  fact,  see 
or  both,  upon  the  co-operative  or  as-  Union  Central  v.  Cheever,  36  Oh.  St. 
Bessment  plan,  shall  give  to  any  mem-  201;  Schwarzbach  v.  Union,  25  W. 
ber  thereof  the  right  at  any  time,  with  V;i.  622;  Valley  Mutual  v.  Tewalt, 
the  consent  of  such  corporation,  asso-  79  Va.  421;  Edington  v.  Ins.  Co.,  67 
ciation,  or  society  to  make  a  change  N.  Y.  185:  Reid  v.  Ins.  Co.,  68  Mo. 
in  his  payee  or  payees,  henetieiary  or  421,  Swift  v.  Ins.  Co.,  supra. 
beneficiaries,  without  requiring  the  '  Mutual  Reserve  v.  Hamlin,  139  U. 
consent  of  such  payee  or  beneficia-  S.  297;  11  Sup.    Ct.   Rep.  614;  Dodge 


630  ACTION    ON    CONTRACT    OF    SOCIETY. 

proved,  his  declarations  are  competent  to  show  that  he  had 
knowledge  of  the  fact.1  A  petition  for  reinstatement  recit- 
ing that  the  member  has  been  suspended  for  non-payment  of 
a  certain  assessment,  is  a  waiver  of  any  formal  defect  in  the 
notice  of  that  assessment.2  Evidence  of  a  member's  oral 
declarations  made  after  he  had  received  his  certificate,  is  inad- 
missible to  vary  its  construction,  and  his  mere  statement  that 
it  is  intended  for  the  benefit  of  a  certain  person,  is  insufficient 
to  constitute  a  trust  in  favor  of  that  person.8 

§  320.  Proofs  of  death. — The  furnishing  of  proof  of  the 
death  of  the  member  is  usually  made  a  condition  precedent 
to  the  liability  of  the  society  upon  its  certificate.  Preliminary 
proofs  of  death  furnished  to  the  society  are  evidence  of  the 
compliance  by  the  beneficiary  with  the  terms  of  the  contract, 
but  they  are  not  evidence  of  the  facts  set  forth  in  them. 
They  may  not  be  used  in  an  action, on  the  contract  to  sustain 
the  issue  on  the  part  of  the  plaintiff.  The  statements  made 
in  them  may  be  used  against  the  beneficiary  as  admissions 
against  his  interest,  but  he  is  not  estopped  by  any  such 
statements  to  show  the  facts.  The  most  that  can  be  said  is 
that,  having  made  the  statements,  the  burden  is  upon  him 
to  show  that  they  were  made  inadvertently  or  by  mistake.4 

v.  Friedman's  Co.,  93  U.S.  379:  La-  Co.    v.  Newton,  89  TJ.  S.  (22  Wail.) 

rensky    v.    Supreme   Lodge,    31  Fed.  38;  Home  Benefit  v.  Sargent,  142  U. 

Rep.  592;  Supreme  Lodge  v.  Schmidt,  S.  691;  12  Sup.  Ct.  Rep.  332;  31  Fed. 

98  Ind.  379;  1  Greenl.  Ev.  at   section  Rep.  711;  Germania  Ins.  Co.  v.  Cur- 
171;  see  §294;  ran,  8  Kan.  9;  Hubbard  v.  Ins.  Co., 

1  Dilleber  v.  Ins.  Co.,  69  N.  Y.  256;  33  Iowa  325;  Commercial  Ins.  Co.  v. 
Hansen  v.  Supreme  Lodge,  140  111.  Huckberger,  52  111.  464;  but  see 
301:  29  N.  East.  Rep.  1121.  Campbell  v.  Ins.  Co.,  10  Allen  213, 

2  Hansen  v.  Supreme  Lodge,  supra,    and  Irving  v.  Ins.  Co.,  1  Bosw.  507, 

3  Eastman  v.  Provident  Mutual,  62  where  it  was  held  that  the  assured  is 
N.  H.  555;  65  N.  H.  176;  20  Cent,  bound  by  the  statements  contained 
Law  Journal,  266;  Wason  v.  Colbum,    in  his  preliminary  proofs,  and  will 

99  Mass.    342;    Supreme  Council  v.    not  be  permitted  to  contradict  them, 
Morrison,  16  R.  I.  468;  17  Atl.  Rep.  57.    unless  he  notifies  the  company  of  the 

4N.  Am.  Ins.  Co.  v.  Burroughs,  69  error  before  the  trial  of  the  case. 
Pa.  St.  43;  1  Ins.L.  J.  90;  Dougberty  The  requirement  in  a  certificate  that 
v.  Ins.  Co.,  154 Pa.  St.  385;  25  Atl.  Rep.  the  insurer  shall  be  furnished  with 
739;  Keels  v.  Mutual  Association,  29  "  satisfactory  proof  of  the  death"  of 
Fed.  Rep.  198;  American  Ins.  Co.  v.  the  assured  does  not  entitle  it  to  de- 
Day,  39  N.  J.  L.  89;  Maher  v.  Ins.  mand  information  as  to  the  cause  of 
Co. ,  67  N.  Y.  283;  Spencer  v.  Ins.  Co. ,  his  death.  See  §  156. 
23  N.  Y.  Supp.  179;  Mutual  Ben.  Ins. 


ACTION    ON    CONTRACT    OF    SOCIETY.  631 

"Where  there  is  nothing  in  the  contract  requiring  the  notice  of 
death  to  state  its  cause,  plaintiff  need  only  prove  the  death  at 
the  trial,  since  the  cause  is  a  matter  of  defense;  but,  where 
the  physician  who  attended  the  deceased,  during  his  last 
illness  certified  to  a  cause  of  death,  which,  if  true,  would  have 
defeated  a  recovery,  that  part  of  his  certificate  stating  the 
cause  of  death  must  be  admitted  in  evidence,  not  as  independ- 
ent evidence  of  any  fact  in  the  case,  but  in  connection  with 
the  circumstances  of  its  transmission  to  the  society,  as  an  ad- 
mission that  the  fact  alleged  is  true.  It  is  not  incompetent 
evidence  under  a  statute  providing  that  a  physician  shall  not 
be  permitted  to  disclose  any  information  which  he  acquired  in 
attending  a  patient  in  a  professional  capacity.1  Where  the 
contract  of  insurance  does  not  require  the  claimant  to  furnish 
proof  of  the  cause  of  death,  an  infant  beneficiary  is  not  bound 
by  the  admission  of  his  guardian,  who,  in  furnishing  the  proofs 
of  death,  voluntarily  included  the  attending  physician's  cer- 
tificate of  the  cause  of  death,  which  showed  that  the  insured 
died  from  one  of  the  excepted  causes. 

A  sworn  statement  by  a  widow  in  proofs  of  death,  that  her 
husband  committed  suicide  while  insane,  does  not  estop  her  to 
show  that  she  made  the  statement  on  the  faith  of  wrhat  others 
told  her,  and  not  from  actual  knowledge,  and  that  he  took 
poison  by  mistake.3  In  the  absence  of  a  statutory  or  consti- 
tutional provision  making  other  evidence  competent,  nothing 
but  common  law  evidence  may  be  introduced  in  an  action  on 
an  insurance  contract,  and  where  there  is  no  rule  making  the 
records  or  books  of  the  board  of  health  evidence  as  to  the 
cause  of  death  in  the  trial  of  an  action  at  law,  when  that 
question  is  material,  such  records  or  books  are  inadmissible.' 
AY  here  a  policy  provided  for  due  notice  and  proof  of  the  death 
of  the  insured,  and  of  the  just  claim  of  the  claimant,  and  the 
society  had  paid  the  amount  of  the  policy  to  a  party  not  en- 
titled by  law  to  its  benefits,  he  having  presented  proofs  of  the 
dentil  of  the  insured  to  the  society,  and  afterward  the  rightful 

'Buffalo  Trust  Co.  v.  Aid  Associa-  v.  N:  W.  Association.  40  Minn.  202. 

tion.  126  N.  Y.  450;  27  N.  East.  Rep.  'Bachmeyerv.  Association,  82 "Wi-j. 

942:  Goldschmidt  v.  Ins.  Co.,  103  N.  255;  52  N.  W*.  Rep.  101. 

Y.  486;  7N.  East.  R,  p.  408;  Ins.  Co.  'Buffalo  Trust  Co.  v.  Ai     Associa- 

v.  Rodel,  95  U.  S.  2:52;  see  Muller  v.  tion,  supra, 
Geruiania,  18  N.  Y.  Supp,  794;  B^utz 


632  ACTION    ON    CONTRACT    OF    SOCIETY. 

beneficiary  made  proof  by  affidavit  of  the  death  of  the  insured, 
and  of  his  own  just  claim,  a  general  objection  by  the  society 
to  the  sufficiency  of  the  proofs  is  not  good.  The  court  said : 
"  As  the  proofs  of  the  death  of  the  insured  already  in  posses- 
sion of  the  defendant  had  been  accepted  by  them  as  satisfac- 
tory, there  is  no  merit  in  the  contention  of  the  defendant,  that 
the  plaintiffs  have  failed  to  comply  with  the  terms  of  the 
policy  in  this  respect.  If  the  defendant  has  not  already 
waived  any  proof  of  death  by  claiming  that  they  had  paid  the 
loss  to  the  person  entitled,  they  did  waive  further  proof  than 
the  affidavit  by  failing  to  specify  any  grounds  of  objection  to 
it  in  form  or  substance."  J  Preliminary  proof  of  death  may 
be  waived  by  a  mutual  benefit  society.*  Where,  by  the  terms 
of  the  contract,  the  society  is  not  bound  to  levy  an  assessment 
to  meet  a  death  loss,  until  sixty  days  after  due  proof  of  the 
death  has  been  made,  a  declaration  or  complaint  which  fails  to 
state  that  such  proof  has  been  made,  is  defective.3  Where  an 
attempt  is  made  to  aver  notice  and  proof  of  death,  as  required 
by  a  certificate  in  a  mutual  benefit  society,  it  may  be  aided  by 
an  averment  that  the  society  is  in  default  for  not  paying  the 
benefit  according  to  the  terms  of  the  certificate.* 

Where  proofs  of  death  of  the  assured  have  been  made,  and 
the  society  retains  them  without  suggesting  any  defect  in  the 
proof,  and  finally  wholly  refuses  to  pay  the  claim,  it  thereby 
waives  any  defect  in  the  formal  proof  of  death  and  acknowl- 
edges that  the  requisite  proofs  were  received  by  it.  But  such 
proof  must  be  to  such  a  degree  formal  as  to  show  that  it  is 
intended  to  be  the  preliminary  proof  of  death.  Where  such 
proof  has  not  been  furnished  as  required  by  the  contract,  a 
refusal  of  the  society  to  pay  on  other  grounds,  before  the  time 
for  making  proofs  has  expired,  is  a  waiver  of  this  require- 
ment.5    Where  a  by-law  of  a  mutual  benefit  society  provides 

'Timayenis   v.   Union    Mutual,   21  When  disappearance  is  evidence  of 

Fed.  Rep.    223;   Wuesthoff    v.    Ger-  death.    Braunstein  v.  Ins.  Co.,  31  L. 

mania  Co.,  107  N.  Y.  580,  overruling  J.  R.  Q.  B.  17;  Prudential  Ins.    Co. 

52  Superior  Ct.  208.  v.  Edmunds,  2  App.  Cas.  487;  John 

2  Covenant  Mutual  v.  Spies,  114  111.  Hancock  Ins.  Co.  v.  Moore,  34  Mich. 

463.  41;  Tisdale  v.  Ins.  Co.,  28  Iowa  12; 

3 Taylor  v.  Relief  Union,  94  Mo.  35;  Travelers  Ins.    Co.   v.   Sheppard,  85 

6  S.  W.  Rep.  71.  Ga.  751;  12  S.  E.  Rep.  18. 

4  National  Association  v.  Grauman,        6  Metropolitan  Association  v.  Wind- 

107  Ind.    288;  7  N.  East.    Rep.    233.  over,  137  111.  417;  27  N.   East.    Rep. 


ACTION    ON    CONTRACT   OF    SOCIETY.  633 

that  upon  receipt  of  notice  of  death  of  a  member  the  secre- 
tary shall  immediately  forward  to  the  beneficiary  the  proper 

blanks,  and  full  instructions  how  to  make  proofs  of  death,  and 
the  society,  upon  notice  of  the  death  of  a  member,  with  a  request 
to  send  the  blanks  and  instructions  as  to  the  required  proof, 
refuses  to  send  the  same  on  the  ground  that  the  decedent  had 
failed  to  pay  his  assessments,  and  had  ceased  to  be  a  member 
before  his  death,  this  refusal  to  send  the  blanks  and  instruc- 
tions is  a  waiver  of  the  preliminary  proof  of  death.1  The  laws 
of  a  society  made  it  the  duty  of  the  secretary  of  the  subor- 
dinate lodge,  on  the  death  of  a  member,  to  notify  the  supreme 
council  thereof,  in  accordance  with  a  form  provided  by  it,  con- 
taining particulars,  many  of  which  could  ordinarily  be  known 
only  to  an  officer  of  the  lodge,  and  provided  that  proofs  for 
benefits  should  be  passed  on  by  the  subordinate  lodge  and  then 
by  the  supreme  council.  Under  these  laws,  it  was  held  that 
all  a  claimant  had  to  do  was  to  notify  the  subordinate  lodge 
of  the  death  of  the  member,  and  the  duty  was  then  put  on  it 
of  furnishing  proof  of  death  to  the  supreme  council."  Where 
the  constitution  and  by-laws  of  a  mutual  benefit  association 
do  not  require  the  beneficiary  to  make  proofs  of  death  of  a 
member,  the  failure  of  the  subordinate  lodge  to  make  a  report 
of  the  cause  of  death  of  a  member,  as  required  by  the  consti- 
tution and  by-laws,  does  not  affect  the  right  of  the  beneficiary 
to  recover.3 

The  obstinate  and  unjust  refusal  of  a  physician  to  furnish  a 
certificate  of  the  cause  of  the  death  of  the  member,  so  that 
those  interested  are  thereby  prevented  from  complying  with  a 
condition  of  the  contract,  can  not  deprive  them  of  the  right  to 
enforce  the  policy.4 

§  327.  Attachment  of  benefit  fund— Garnishment. — In 
treating  of  the  question  as  to  who  may  by  contract  legally 

538;  Lazensky  v.  Supreme  Lodge,  31  'Anderson    v.    Supreme    Council 

Fed.  Rep.  592.  Chosen   Friends,  L85  X.  Y.  107;  31  X. 

1  Covenant  Mutual  v.  Spies.  114111.  East.    Rep.  1092;  affirming    16  N.  V. 

463;    Kansas     Protective      Union    v.  Supp.  947. 

Whitt,  36  Kan.  760;  14  Pac.  Rep.  27;  -Supreme  Council  v.   Boyle  (Ind. 

Grattan  v.  Ins.   Co.,   80  N.  Y.    281;  App.),  37  X.  Past.  Rep.  1105. 

Evarts  v.  Association.  16  X.  Y.Supp.  *0'Neill  V.  Massachusetts  Ass'n,  18 

27;  Meagher  v.  Union,  20  X.  Y.  Supp.  N.  Y.  Supp.  22. 
247. 


634:  ACTION    ON    CONTKACT    OF    SOCIETY. 

acquire  the  benefits  of  a  certificate  of  insurance  in  a  mutual 
benefit  society,  it  is  proper  also  to  inquire  whether  those  bene- 
fits may  be  reached  by  third  parties  by  process  of  law.  As  a 
general  rale,  when  the  preliminary  proofs  of  death,  the  making 
of  which  is  a  condition  precedent  to  a  recovery  upon  a  life 
insurance  policy,  have  been  made,  the  amount  due  and  owing 
to  the  beneficiary  may  be  reached  by  attachment  and  garnish- 
ment in  the  same  manner,  and  to  the  same  extent,  as  other 
choses  in  action.  In  Girard  Ins.  Co.  v.  Field,1  it  was  held  that 
where  a  loss  had  occurred  under  the  policy  of  insurance,  a  gar- 
nishment would  lie  against  the  fund,  whether  proofs  of  loss 
had  been  made,  or  not,  at  the  time  garnishee  process  was  served, 
and  that  the  simple  operation  of  the  garnishee  process  was  to 
place  the  plaintiff  in  the  garnishee  proceedings  into  the  same 
relation  with  the  company  that  the  defendant  would  have  held, 
but  for  the  proceedings  in  garnishment.3  Several  cases,  how- 
ever, hold  that  the  proceeds  of  a  policy  of  insurance  can  not  be 
made  the  subject  of  attachment  or  garnishment  proceedings 
until  such  preliminary  proofs  have  been  made.  They  base 
their  view  upon  the  theory  that,  as  the  liability  of  the  com- 
pany does  not  ripen  into  an  indebtedness  by  the  mere  lapse  of 
time,  but  upon  the  performance  of  some  act  by  the  other  party 
to  the  contract,  the  company  may,  until  such  act  has  been  per- 
formed, properly  say  that  there  is  nothing  due  the  beneficiary 
upon  the  policy.3 

§  328.  When  benefit  fund  may  or  may  not  be  attached. — 
While,  with  regard  to  ordinary  life  insurance  contracts,  the  rule 
is  undoubtedly  as  above  stated,  it  has,  nevertheless,  been  held 
that  contracts  of  insurance  in  mutual  benefit  societies  can  not 
be  made  the  subject  of  attachment  or  garnishment  proceed- 
ings. This  immunity  of  the  fund  from  such  proceedings  arises, 
if  at  all,  from  the  provisions  of  the  law  providing  for  the  organ- 

'45  Pa.  St.  129.  Ill  Pa.  St.  507.     As  to  the  rights  of 

2  Hanover  Ins.  Co.  v.  Connor,  20  an  assignee  of  an  insolvent  in  a  policy 
111.  App.  297.  payable  to  his  executors,  administra- 

3  Love  joy  v.  Ins.  Co.,  11  Fed.  Rep.  tors  or  assigns,  see  In  re  McKinney, 
63;  Martz  v.  Ins.  Co.,  28  Mich.  201;  15  Fed.  Rep.  535;  Brigham  v.  Ins. 
Bishop  v.  Young,  17  Wis.  46.  A  pol-  Co.,  131  Mass.  319;  Bassettv.  Parsons, 
icy  of  life  insurance,  pa3rable  to  the  140  Mass.  169;  Heyman  v.  Dubois,  13 
legal  representatives  of  the  assured  is  L.  R.  Eq.  158;  In  re  Russell's  Policy 
not  subject    to  attachment  proceed-  Trusts,  15  L.  R.  Eq.  26. 

ings  during  his  life.     Day  v.  Ins.  Co., 


ACTION    ON    CONTRACT    OF    SOCIETY.  635 

ization  of  such  societies.  A  law  of  Massachusetts  enacts  that 
a  corporation  organized  under  it  may  "provide  in  its  by-laws 
for  the  payment  by  each  member  of  a  fixed  sum,  to  be  held  by 
such  association  until  the  death  of  a  member  occurs,  and  then 
to  be  forthwith  paid  to  the  person  or  persons  entitled  thereto, 
and  such  fund  so  held  shall  not  be  liable  to  attachment  by 
trustee  or  other  process."  In  construing  this  provision  of  the 
law,  the  court  said  :  "  In  view  of  the  object  of  these  beneficiary 
corporations,  of  the  limited  number  of  persons  for  whose 
benefit  they  are  intended,  of  the  fact  that  the  member  of  the 
corporation  could  not  provide  for  his  creditors  by  a  benefit 
certificate,  or  dispose  of  the  fund  by  testamentary  bequest,  we 
can  not  doubt  that  the  fund  due  on  the  certificate  is  not  sub- 
ject to  the  attachment  while  it  remains  in  the  hands  of  the 
corporation.  If  it  were,  it  would  be  impossible  for  the  mem- 
ber, in  many  instances,  to  provide  for  those  for  whom  it  was 
contemplated  that  lie  should,  by  this  method,  be  able  to  make 
provisions."  The  court  held  that,  upon  the  death  of  the  hus- 
band, the  wife's  interest  in  the  benefit  fund  could  not  be  at- 
tached in  the  hands  of  the  society  for  her  debt.1 

In  another  case  2  it  was  held  that  a  certificate  of  member- 
ship in  a  mutual  benefit  society,  payable  to  the  widow  of  a 
member,  is  for  the  benefit  of  the  member's  family,  and  can  not 
be  seized,  upon  the  death  of  a  member,  by  the  widow's  cred- 
itors, where  the  charter  of  the  association  provides  that  the 
funds  shall  be  for  the  relief  of  the  member's  family,  and  shall 
be  exempt  from  seizure  under  execution  or  other  Legal  proc- 
ess, to  pay  any  debt  of  the  deceased  member.  This  con- 
struction was  given  to  this  provision  of  the  charter,  on  the 
ground  that  it  harmonized  with  the  legislative  action  upon  the 
subject,  as  well  as  with  the  rule  which,  when  applied  to  such 
organizations,  requires  a  liberal  construction  of  their  charters 
in  favor  of  the  objects  of  their  bounty,  and  to  prevent  the  ap- 
plication of  their  funds  to  the  benefit  of  those  who  are  stran- 
gers to  the  organization.  The  charter  of  a  society  provided: 
"Ko  part  of  the  stock  or  interest,  which  any  member,  or  his 

1  Saunders  v.  Robinson,  1)1  Mass.       *Schillinger  v.  Boes,  85  Kv.  857;  3 

806;  10  N.  East.  Rep.  815;  see  Breckel  s.  \v.   Rep,   127;  see   Vilbon  v.  Mar- 

v.  Imperial  Council,  11  N.  Y.  Supp.  souin,   18  Lower    Can.    Jurist.  349; 

831.  Brown  v.  Balfour,  40  Minn.  88. 


636  ACTION    ON    CONTRACT    OF   SOCIETY. 

widow,  or  children  may  have  in  said  institution,  shall  be  sub- 
ject to  any  debt,  liability,  or  legal  or  equitable  process  against 
him,  or  any  of  them."  A  member  died,  and  his  son  became 
entitled  to  $100  as  a  beneficiary  of  his  certificate.  A  cred- 
itor of  the  son  levied  upon  that  sum  in  the  hands  of  the  society 
by  attachment,  and  it  was  held  that  the  money  was  subject  to 
such  attachment.  The  court  said  :  "  The  money  due  to  the 
representatives  of  a  deceased  member,  is  in  no  sense  an  inter- 
est '  in  said  institution.'  It  is  a  debt  due  from  it  to  them,  not 
as  shareholders,  but  as  creditors."  ' 

In  Hankinson  v.  Page,2  it  was  held  that  the  interest  of  an 
heir  at  law  of  a  deceased  member  of  a  mutual  benefit  society, 
in  a  sum  to  be  raised  and  paid  by  the  society  on  the  death  of 
a  member,  was  attachable  in  New  York.  In  this  case,  it  was 
insisted  that  the  demand  against  the  society  was  in  the  nature 
of  equitable  assets,  and,  therefore,  could  not  be  attached,  but, 
upon  this  point,  the  court  said  :  "  Although  an  attachment  is 
a  special  remedy  at  law,  and.  in  the  absence  of  statutory  au- 
thority, does  not  reach  property  or  interests  which  can  only 
be  realized  by  the  assistance  of  a  court  of  equity,  the  tendency 
of  legislation  in  this  country  has  been  to  enlarge  the  opera- 
tion of  the  writ,  and  subject  interests  and  kinds  of  propert}'  to 
seizure  under  an  attachment,  which  are  not  subject  to  execu- 
tion at  law." 3  The  court  held  that,  as  the  beneficiary  could 
maintain  a  suit  at  law  to  enforce  the  contract  against  the  as- 
sociation, and  was  not  compelled  to  resort  to  equity,  the  point 
was  not  well  taken.  Where  the  law  under  which  a  mutual 
benefit  society  is  organized  provides  that  the  benefit  fund 
shall  be  exempt  "  from  execution,  and  shall  not  be  liable  to  be 
seized,  taken  or  appropriated  by  any  legal  or  equitable  process 
to  pay  any  debt  or  liability  of  such  deceased  member,"  the 
fund,  after  it  has  been  received  by  the  beneficiary,  is  not  ex- 
empt from  the  claims  of  the  creditors  of  such  beneficiary.4 

1  Geiger  v.  McLin,  78  Ky.  232.  4  Bolt    v.    Keyhoe,    30    Hun    619; 

2  31  Fed.  Rep.  184.  Crosby  v.  Stephan,  32  Hun  478. 

3  Drake  on  Attachment  at  Sec.  7. 


CHAPTER  XXV. 

ACTION  ON  THE  CONTRACT  OF  THE  SOCIETY. 

§  329.  Plans  and  schemes  of  mutual  benefit  insurance. 

330.  Mandamus  as  a  remedy. 

331.  Remedy  in  equity. 

332.  Contract  to  resort  to  equity. 

333.  An  action  at  law  is  a  proper  remedy. 

334.  Pleading,  breach  of  promise  to  pay. 

335.  Pleading,  evidence,  breach  of  promise  to  pay. 

336.  Averment  of  a  demand  for  an  assessment. 

337.  Plea  or  answer  setting  up  that  no  fund  has  been  raised  by  assess- 

ment. 

338.  Evidence,  effect  of  the  collection  of  an  assessment  by  the  society. 

339.  Evidence  of  the  amount  which  might  have  been  realized  by  an 

assessment. 

340.  Burden  of  proof. 

341.  Nominal  damages  in  an  action  at  law. 

342.  Substantial  damages  in  an  action  at  law. 

343.  Burden  of  proof  and  measure  of  damages  discussed. 

344.  Measure  of  damages  in  certain  cases. 

345.  Measure  of  damages  for  change  of  the  plan  of  insurance. 

§  329.    Plans  and  schemes  of  mutual  benefit  insurance. 

— Each  mutual  benefit  society  has  its  own  form  of  contract  of 
insurance.  While  these  contracts  differ  in  detail,  they  seem 
to  be  formed  upon  three  general  plans.  First.  Where  the 
society  agrees,  on  certain  conditions,  to  pay  a  certain  sum  of 
money  on  the  death  of  a  member.  Second.  Where  the  society 
agrees  to  pay,  on  certain  conditions,  as  many  dollars  as  there 
are  members  of  the  society  in  good  standing  at  the  time  of  the 
death  of  a  member.  Third.  Where  the  society  agrees,  on 
certain  conditions,  on  the  death  of  a  member,  to  levy  an  assess- 
ment upon  its  members  in  a  certain  sum  of  money,  and  to  pay 
the  proceeds  of  such  assessment  to  the  beneficiary  of  the  mem- 
ber. Actions  upon  certificates  issued  under  the  first  plan, 
where  the  agreement  is  to  pay  a  fixed  sum  of  money  to  the 
beneficiary  of  a  member  dying  in  good  standing,  are  governed 
by  the  same  principles  which  obtain  in  suits  upon  ordinary 

(637) 


638  ACTION    ON    CONTRACT    OF    SOCIETY. 

insurance  policies.  Concerning  actions  upon  certificates  issued 
under  the  second  plan,  where  the  society  agrees  to  pay  to  the 
beneficiary  of  a  member  dying  in  good  standing  as  many  dol- 
lars as  there  are  members  of  the  society  at  the  time  of  his 
death,  little  need  here  be  said.  There  is  nothing  in  such  a  con- 
tract suggestive  of  the  idea  that  defendant's  liability  is  depend- 
ent upon  collections  received  from  an  assessment,  and  a  com- 
plaint or  declaration  upon  it  states  a  cause  of  action,  although 
it  neither  alleges  the  actual  receipt  of  money  upon  an  assess- 
ment to  meet  the  loss,  nor  a  neglect  to  make  such  assessment.1 
Parol  evidence  is  admissible  to  show  the  number  of  members 
of  the  society  at  the  death  of  the  deceased  member,  in  order 
to  ascertain  the  sum  recoverable  under  the  contract.2  Where 
the  society  agrees,  on  the  death  of  a  member  in  good  stand- 
ing, to  levy  an  assessment  of  a  certain  sum  of  money  on  each 
surviving  member  of  the  society,  and  to  pay  the  proceeds 
thereof  to  the  beneficiary  of  the  member,  many  questions  may 
arise.  In  the  first  place,  let  us  inquire  whether  mandamus  is 
the  proper  remedy  for  a  breach  of  the  contract. 

§  330.  Mandamus  as  a  remedy. — In  the  lower  courts,  the 
point  is  often  made  that  the  proper  proceeding  upon  such  a 
certificate  of  membership  is  neither  by  suit  at  law  nor  bill  in 
equity,  but  is  by  mandamus  to  compel  the  officers  of  the  soci- 
ety to  make  an  assessment.  But  this  point  has  seldom  been 
pressed  in  courts  of  last  resort,  for  an  investigation  readily 
shows  that  it  is  not  well  taken.  It  is  elementary  that  a  court 
has  no  jurisdiction  by  mandamus  to  compel  the  performance 
of  executory  contracts,  and  especially  is  this  the  case  where,  in 
the  performance  of  such  contracts,  discretion  and  judgment 
must  be  exercised.3  It  is  also  laid  down  as  the  rule,  both  in 
this  country  and  in  England,  that  where  a  party  has  another 
specific  legal  remedy  he  may  not  resort  to  a  proceeding  by 
mandate.  It  has  been  held,  upon  this  ground,  that  the  bene- 
ficiary may  not  resort  to  such  a  proceeding.4     In  discussing  the 

1  Neskern  v.  Association,  30  Minn.  People.  85  111.  396;  High  Ext.  Rem. 
406;  see  Curtis  v.  Ins.  Co.,  48  Conn,    at  section  321. 

98.  4  Excelsior  Mutual  Aid  v.   Riddle, 

2  Benefit  Society  v.  Fietsam,  97  111.  91  Ind.  84;  see  State  v.  Turnpike  Co., 
474 .  16  Ohio  St.  308 ;  State  v.  Railroad  Co. , 

3  People  ex  rel.  v.  Dulaney  et  al. ,  96  43  N .  J.  Law  505 ;  State  v.  Bridge  Co. , 
111.  503;  County  of   St.  Clair  v.  The  20  Kan.  404;    State  v.    Trustees   of 


ACTION    ON    CONTRACT    OF    SOCIETY.  639 

propriety  of  mandamus  as  a  remedy  in  a  case  cf  contract 
between  parties  and  a  breach  thereof,  the  court  said  :  "  Such  a 
writ  does  not  purport  to  adjudge  or  decide  any  right.  It  is 
rather  in  the  nature  of  an  award  of  execution  than  of  judg- 
ment. It  is  the  mode  of  compelling  the  performance  of  ac- 
knowledged duty  or  enforcing  an  existing  right  rather  than 
deciding  what  that  right  or  duty  is.  The  award  is  no  finality. 
It  concludes  nothing.  If  the  writ  is  denied,  the  relator  can 
not  have  error,  and  if  granted,  the  award  could  not  be  pleaded 
in  law.  If  the  writ  were  issued  in  this  case,  it  could  not  direct 
the  payment  of  any  specific  amount,  as  that  is  dependent  upon 
the  number  of  certificates  in  force  at  a  given  time,  which  must 
first  be  ascertained,  so  that  a  question  might  arise  whether  it 
would  not  be  necessary  to  issue  several  in  order  to  give  the 
party  adequate  relief.  But  why  should  this  be  done  while  the 
defendant  company  denies  all  and  any  liability  because  of 
fraud  or  false  representations  ?  Here  is  a  question  that  should 
first  be  settled,  and  manifestly  an  ordinary  trial  in  a  court  of 
law  is  the  proper  way  of  so  doing.  The  argument  that  the 
company  has  no  funds  to  pay  a  judgment,  if  one  is  recovered, 
can  be  no  reason  for  issuing  the  writ.  If  it  were,  this  court 
might  be  under  the  necessity  of  issuing  it  in  the  case  of  in- 
solvent debtors  generally.  Indeed,  it  may  be  said  that  a 
private  corporation  can  not  by  the  peculiar  form  of  contract  it 
enters  into  with  individuals,  nor  because  of  its  insolvency,  or 
both,  avoid  an  action  at  law  upon  a  breach  of  its  agreement, 
or  confer  original  jurisdiction  upon  this  court  for  the  collec- 
tion of  money  demands."  ' 

Where  the  by-laws  of  a  mutual  benefit  association  provide 
that  its  members  shall  be  subject  to  but  one  assessment  for  each 
death  loss,  and  one  assessment  is  made  from  whieh  only  part 
of  the  amount  due  on  a  certificate  is  paid,  mandamus  will  not 
lie  to  compel  the  levy  of  another  assessment  in  order  to  pay 
a  judgment  obtained  for  the  remainder  found  to  be  due,  and  it 
is  immaterial  in  that  regard  whether  the  first  assessment  was 
sufficient  to  pay  the  claim  in  full  or  not,3     In  a  suit  upon  a 

Salem  Church,  114  Ind.  389;  16  N.  *  People  ex  rel.  Meyers  v.  AsB'n,  126 
East.  Rep.  808.  N.  Y.  615;  27  N.  Bast.    Rep.  L037,  re- 

1  Burland  v.  Association,  47  Mich,    versing  12  N.  Y.  Supp.  171. 
427;  Bates  v.  Association,  47  Mich. 
646. 


64:0  ACTION    ON   CONTRACT    OF    SOCIETY. 

fire  insurance  policy  issued  by  a  mutual  insurance  company, 
which,  in  substance,  provided  that  the  loss  as  adjusted  should 
be  paid  by  assessments  upon  its  members,  it  was  held,  that,  as 
the  society  had  adjusted  plaintiff's  loss,  and  had  neglected  to 
make  the  necessary  assessment  within  the  time  stipulated  in 
the  contract,  plaintiff  was  entitled,  under  sections  3375  and 
3381  of  the  Code  of  Iowa,  to  an  order  of  mandamus  to  com- 
pel the  levy  of  such  assessment.1 

§  331.  Remedy  in  equity. — It  has  been  held  that  courts  of 
equity  have  jurisdiction  to  enforce  specific  performance  of 
those  contracts  of  insurance  which  provide,  in  substance,  that, 
upon  the  death  of  a  member  who  has  complied  with  all  the 
requirements  of  the  contract  upon  his  part  to  be  performed, 
the  society  will  levy  an  assessment  upon  its  members,  and  col- 
lect and  pay  over  to  the  beneficiary  the  proceeds  thereof.  The 
grounds  of  such  equitable  jurisdiction  are  not  discussed  at 
length  in  any  of  the  cases  holding  this  doctrine,  though  the 
relation  of  trustees  and  cestuis  que  trustent  is,  in  a  measure, 
assumed,  and  the  inadequacy  of  the  legal  remedy  seems  to  be 
the  foundation  of  the  decisions.  Ordinary  mutual  life  insur- 
ance companies  are  not,  in  any  sense,  trustees  in  their  relations 
to  their  policy  holders.2  It  has,  however,  been  held  that  a 
mutual  benefit  society  stands  as  a  trustee  of  the  fund  which 
it  collects  for  the  beneficiary  entitled  thereto.3  Whether  rela- 
tions of  trust  exist  between  the  society  and  its  officers  or 
between  the  society  and  its  members  need  not  here  be  inquired 
into,  but  it  would  certainly  be  difficult  to  define  any  general  fidu- 
ciary relation  between  the  society  and  a  beneficiary  of  one  of  its 
contracts  of  insurance.  When  we  consider  that  the  contract  is 
unilateral,  binding  upon  the  society  in  case  the  member  desires 
to  continue  the  contract,  but  not  enforceable  against  a  member 
refusing  or  neglecting  to  pay;  that  so  many  courts  have  held  the 
leo-al  remedy  to  be  practicable  and  adequate;  that  assumed  fidu- 
ciary relations  between  the  parties  are  illusive,  intangible  and 

1  Harl  v.  Ins.  Co.,  74  Iowa  39;  36  N.  s  Relief  Association  v.  McAuley,  2 
W.  Rep.  880;  see  Rainsbarger  v.  As-  Mackey,  D.  C.  70;  Covenant  Mutual 
sociation,  72  Iowa  191.  Benefit  Association  v.  Sears,  114  111. 

2  Taylor  v.  Charter  Oak,  9  Daly  108;  In  re  Protection  Life  Ins.  Co. ,  9 
489;  Bewley  v.  Equitable  Society,  61  Bissell  188;  Wilber  v.  Torgerson,  24 
How.    Pr.  344:   Cohen  v.  N.  Y.    Mu-  111.  App.  119;  see  §  121  et  seq. 

tual,  50  N.  Y.  610. 


ACTION    ON    CONTRACT    OF    SOCIETY.  641 

incapable  of  satisfactory  definition,  we  may  be  in  doubt  as  to 
equitable  jurisdiction  in  such  cases.  Nevertheless,  because  of 
the  peculiar  provisions  of  the  contract  of  insurance,  and  the 
power  of  a  court  of  equity  to  give  adequate  and  direct  relief 
in  the  enforcement  of  its  provisions,  and  because  of  the  uncer- 
tain and  narrow  relief  by  execution  on  a  judgment  at  law,  it 
is  certain  that  such  contracts  possess  the  essential  elements  and 
incidents  which  give  to  courts  of  equity  the  jurisdiction  to 
compel  the  performance  of  them. 

A  society  issued  to  a  member  a  certificate  by  which  it  agreed, 
upon  his  death,  to  make  an  assessment  on  each  member 
of  the  society,  and  to  pay  the  proceeds  of  such  assessment, 
not  exceeding  the  sum  of  twenty-five  hundred  dollars,  to  his 
beneficiary.  After  the  death  of  the  member,  the  beneficiary 
brought  an  action  at  law  upon  the  certificate,  but  the  supreme 
court  Iowa,  Beck,  J.,  dissenting,  held  that,  upon  the  refusal  of 
of  the  defendant  to  make  the  assessment  and  pay  over  the 
proceeds  of  such  assessment,  an  action  at  law  could  not  be 
maintained  for  the  recovery  of  such  sum  as  it  might  be  sup- 
posed would  have  been  realized  if  the  assessment  had  been 
made;  'that  the  remedy  of  the  beneficiary  was  by  a  proceeding 
to  compel  the  society  to  make  the  assessment.1  In  another 
case  a  decided  by  the  same  court  three  days  after  the  case  of 
Rainsbarger  v.  Association,  sujjm,  it  was  held  that  an  action 
at  law  was  properly  brought  on  such  a  contract,  but  that  in 
such  an  action  nominal  damages  only  could  be  recovered.  A 
bill  in  chancery  was  brought  to  recover  the  bene  lit  fund 
agreed  to  be  paid  by  the  terms  of  a  certificate  of  mem- 
bership in  a  society.  Objection  was  taken  to  the  jurisdic- 
tion of  the  court,  that  there  was  an  adequate  remedy  at 
law.  The  supreme  court  of  Illinois,  in  passing  upon  this 
question,  said:  ,k  The  certificate  of  membership  docs  not  con- 
tain any  contract  to  pay  to  the  beneficiaries  $5,000,  or  any 
sum,  absolutely,  but  to  levy  assessments  ratably  upon  all 
members  holding  certificates  in  force  at  the  death  of  decedent, 
for  an  amount  not  less  than  the  limit  of  the  certificate,  and 

1  Ramsl>ar^t>r    v.    Association,    72        s  Newman  v.  Association,  76  Iowa 
Iowa  191:  33  N.  W.  Rep.  626;  Bailey    50;  33  N.  W.  Rep.  662. 
v.  Association,   71  Iowa  689;   27  N. 
W.  Rep.  770. 
41 


042  ACTION    ON    CONTRACT    OF    SOCIETY. 

to  pay  over  the  sura  so  collected  on  such  assessments,  less 
the  collection  costs.  As  the  corporation  is  not  organized  for 
pecuniary  profit,  has  no  surplus,  and  relies  entirely  upon  the 
mortuary  assessments  made  upon  each  death  for  the  payment 
of  benefits  to  the  beneficiaries  of  a  decedent,  it  would  be  diffi- 
cult to  realize  anything  by  execution.  And  the  association 
stands  as  a  trustee  of  a  fund  in  the  hands  of  its  numerous 
members,  but  belonging  to  the  beneficiaries,  which  can  be 
called  in  by  assessment  for  their  use.  It  would  seem,  then, 
that  a  court  of  equity  might  properly  be  resorted  to  as  being 
capable  of  affording  a  more  adequate  remedy,  by  directing  a 
specific  performance  of  the  contract  of  the  defendant  by  the 
levying  of  the  proper  assessments."  ' 

§  332.  Contract  to  resort  to  equity. — "While  parties  may 
not,  by  contract  in  advance,  waive  all  their  remedies  for  a 
breach  of  a  contract,  yet  they  may  waive  some  of  them,  and 
may  stipulate  in  advance  which  remedies  only  may  be  pursued 
in  case  of  its  breach.  The  only  limitation  upon  this  abridg- 
ment of  remedies  is  that  the  one  stipulated  to  be  pursued  shall 
be  capable  of  affording  substantial  relief.  Such  a  waiver  or 
stipulation  must  be  in  express  and  unequivocal  terms.  A 
society  issued  a  certificate  of  membership  in  which  it  agreed 
that,  if  the  member  died  in  good  standing,  it  would  make  an 
assessment  upon  the  surviving  members  and  pay  over  the  pro- 
ceeds of  the  assessment,  not  exceeding  $5,000,  to  the  benefi- 
ciaries of  the  insured.  The  certificate  contained,  among  other 
conditions,  the  following:  "The  only  action  maintainable 
upon  this  policy  shall  be  to  compel  the  association  to  levy  the 
assessments  herein  agreed  upon,  and  if  a  levy  is  ordered  by  the 
court,  the  association  shall  be  liable  under  this  policy  only  for 
the  sum  collected  under  an  assessment  so  made."  In  an  action 
at  law  on  the  policy,  the  court  said :  "  If  the  policy  provided 
in  clear  terms  that  the  beneficiaries  shall,  in  case  of  death,  receive 

'Covenant    Mutual  v.    Sears,    114  East.  Rep.  642;  N.  "W.  Association  v. 

111.    108,     distinguished     and     com-  Wanner,  24  111.  App.  357;  Burdon  v. 

mented  upon  in  Ring  v.  Association,  Association,  147  Mass.  360;    O'Brien 

33  111.  App.  168;   Suppiger  v.  Associ-  v.  Society,  117  N.  Y.  310;  22  N.  East, 

ation,  20  111.  App.  595;    Metropolitan  Rep.  954;  see  also  Taylor  v.  Union, 

Association  v.  Windover,  137  111.  417;  94  Mo.  35;  6  S.  W.  Rep.  71;  Newman 

27  N.  East.   Rep.  538;   see  Union  Mu-  v.     Association,    supra;    Britton    v. 

tual  v.  Frohard,   134  111.  128;  25  N.  Supreme  Council,  46  N.  J.  Eq.  102. 


ACTION    ON    CONTRACT    OF    SOCIETY.  643 

a  particular  sum  to  be  recovered  by  assessment,  or  to  be  paid 
by  the  company  after  making  an  assessment,  if  the  company 
had  refused  to  make  an  assessment,  1  am  inclined  to  the  opinion 
that  an  action  at  law  might  be  maintained,  especially  if  there 
was  no  provision  in  the  policy  itself  forbidding  it.  But  since 
the  policy  here  does  not  fix  upon  the  company  an  absolute  lia- 
bility to  pay  any  particular  sum,  but  only  a  liability  to  pay 
|  the  proceeds  of  a  particular  assessment,  to  be  levied  in  a  par- 
ticular way;  and  since  it  further  provides  that  the  company 
shall  only  be  liable  in  a  proceeding  to  compel  it  to  make  the 
assessment,  we  are  of  the  opinion  that  an  action  at  law  can 
not,  at  least  in  the  first  instance,  be  maintained.  However  in- 
equitable such  a  contract  may  be,  it  is  undoubtedly  within  the 
power  of  the  parties  to  enter  into  it,  and,  therefore,  we  think 
that  the  only  remedy,  according  to  the  practice  of  this  court, 
and  under  the  terms  of  the  policy,  is  by  a  proceeding  in  chan- 
cery to  compel  a  specific  performance." l 

§  333.  An  action  at  law  is  a  proper  remedy. — Though  a 
beneficiary  may  resort  to  a  court  of  equity  to  require  the 
society  to  levy  an  assessment,  upon  its  neglect  or  refusal  to  do 
so,  he  may,  if  he  prefer,  bring  an  action  at  law  for  damages 
for  breach  of  the  contract  to  levy  the  assessment.  Nearly 
all  of  the  adjudicated  questions  in  mutual  benefit  insurance 
have  arisen  in  suits  at  law.  It  is  true  that  in  many  of  these 
cases  there  is  no  discussion  as  to  the  proper  form  of  action 
or  the  proper  forum  for  the  adjudication  of  the  rights  of  the 
parties.  This  may  at  first  impression  seem  to  detract  from 
their  force  as  authorities  in  favor  of  the  proposition  that  an 
action  at  law  is  a  proper  and  adequate  remedy,  but  the  general 
;ic<  luiescence  of  the  bench  and  bar  in  this  proposition  is  certainly 
a  strong  argument  in  favor  of  its  soundness.11 

1  E^gleston  v.  Association,  18  Fed.  tis  v.   Mutual   Benefit   Life  Co.,   48 

Rep.  it:  19  Fed.  Rep.  201.  Conn.  98;  Mutual  Endowment  Asso- 

■  The  following  are  some  of    the  ciation  v.  Essender,  59  Bid  468;  Yoe 

cases  in  which  it  is   decided   or   as-  v.  Masonic  Mutual.  69  Md.  sir.  Bates 

BUmed  that  an  action  at  law  for  dam-  v.  Association.  17  Midi.  646;  1?  N.  W. 

ages  is  a  proper  and  adequate  remedy  Rep.  67;  Burland  v.  Association,  47 

for  a  breach  of  the  agreement  to  levy  Mich.  427;  11  N.  W.  Rep.  269;  Bank- 

an  a-sessment  and  pay  over  the   pro-  inson  v.  Paige,  31  Fed.  Rep.  top  page 

ceeds,    and   in   which   the  questions  189;   S.   W.   Mutual  v.  Swenson,  49 

arising   in  the  record  are  discussed  Kans.  449. 
and  decided  upon  that  theory.     Cur- 


64-i  ACTION    ON    CONTRACT    OF    SOCIETY. 

Where  the  contract  provides  that  on  the  death  of  a  member 
an  assessment  shall  be  levied  on  the  surviving  members,  and 
the  sura  collected  on  such  assessments  shall  be  paid  to  the  ben- 
eficiary, an  action  at  law  will  lie  for  breach  of  the  contract 
to  levy  the  assessment.1 

Where  the  contract  stipulates  that  the  society  shall  pay  a 
certain  amount  as  a  benafit  fund,  or  such  part  thereof  as 
may  be  raised  by  an  assessment  levied  upon  its  members,  an 
action  at  law  for  breach  of  the  contract  to  levy  the  assessment 
is  a  proper  remedy.2 

§  334.  Pleadings,  breach  of  promise  to  pay. — Where  the 
contract  of  the  society  is  to  pay  a  specific  sum  of  money,  it  is 
sufficient  to  aver,  in  a  complaint  or  declaration  on  the  con- 
tract, a  breach  of  the  promise  to  pay  that  sum.  But  where 
the  contract  provides  that  the  society  shall  pay  as  many  dol- 
lars, or  as  many  times  a  specific  sum,  as  there  are  members  of 
the  society  in  good  standing  at  the  time  of  the  death  of  the 
member,  it  is  evident  that,  in  addition  to  an  averment  of  a 
breach  of  the  contract  to  pay,  there  must  be  an  allegation  of  the 

1  Covenant  Mutual  v.  Hoffman,  110  i  Metropolitan  Association  v.  Wind- 
Ill.  603;  Suppiger  v.  Covenant  Mu-  over,  137  111.  417;  27  N.  East.  Rep. 
tual,  20  111.  App.  595;  New  Home  538;  N.  W.  Ass'n  v.  Wanner,  24  III. 
Life  Ass'n  v.  Hagler,  23  111.  App.  457;  App.  357;  N.  W.  Ass'n  v.  Hall,  118 
Abe  Lincoln  Society  v.  Miller,  23111.  111.  169;  Mandego  v.  Association,  64 
App.  341;  Miller  v.  Georgia  Masonic,  Iowa  134;  Kansas  Protective  Union 
57  Ga.  221;  Kaw  Life  Ass'n  v.  Lemke,  v.  Whitt,  36  Kan.  760;  14  Pac.  Rep. 
40  Kan.  142;  19  Pac.  Rep.  337;  Earn-  275;  Supreme  Council  v.  Anderson , 
shaw  v.  Society,  68  Md.  465;  12Atl.  61  Texas  293;  Excelsior  Mutual  Aid 
Rep.  884;  11  Cent.  Rep.  508;  Oriental  Ass'n  v.  Riddle,  91  Ind.  84;  Elkhart 
Ins.  Co.  v.  Glancey,  70  Md.  101;  16Atl.  Mutual  v.  Houghton,  103  Ind.  286; 
Rep.  391;  Taylor  v.  Relief  Union,  94  Peck  v.  Association,  52  Hun  255;  5 
Mo.  35;  6  S.  W.  Rep.  71;  National  N.  Y.  Supp.  215;  Fulmer  v.  Associa- 
Ass'n  v.  Heckman,  86  Ky.  254;  Jack-  tion.  12  N.  Y.  St.  Rep.  347;  Freeman 
son  v.  Association,  73  Wis.  507;  41  v.  Society,  42  Hun  252;  O'Brien  v. 
N.  W.  Rep.  708;  Splawn  v.  Chew,  60  Society,  117  N.  Y.  310;  22  N.  East. 
Texas 532;  Lenders'  Executor  v.  Ins.  Rep.  954;  affirming  51  Hun  495;  21 
Co.,  12  Fed.  Rep.  465;  4  McCrary,  N.  Y.  St.  Rep.  640;  4  N.  Y.  Supp. 
149;  Fairchild  v.  Association,  51  Vt.  275;  Doty  v.  Association,  9  N.  Y. 
613;  Darrow  v.  Society,  116  N.  Y.  Supp.  42;  Fitzgerald  v.  Association, 
537;  22  N.  East.  Rep.  1093;  42  Hun  5  N.  Y.  Supp.  837;  Bentz  v.  Asso- 
245;  Silvers  v.  Association,  94  Mich,  ciation,  40  Minn.  202;  41  N.  W. 
39;  53  N.  W.  Rep.  935;  Bentz  v.  As-  Rep.  1037;  Stewart  v.  Association,  64 
sociation,  40  Minn.  202;  Herndon  v.  Miss.  499;  1  Southern  Rep.  743;  U.  S. 
The  Triple  Alliance,  45  Mo.  App.  Association  v.  Barry,  131  U.  S.  100; 
426.  Lawler  v.  Murphy,  58  Conn.  294. 


ACTION    ON    CONTRACT    OF    SOCIETY.  645 

number  of  such  members,  in  order  to  give  the  data  from  which 
the  amount  of  the  liability  may  be  computed.  The  want  of 
such  allegation  would,  doubtless,  be  cured  after  verdict.  It 
is  also  evident  that,  where  the  contract  provides  merely  that 
the  society  shall  levy  an  assessment  upon  its  members  and  pay 
over  the  proceeds  thereof  to  the  beneficiary,  it  is  not  sufficient 
to  aver  a  breach  of  the  promise  to  pay.  The  facts  must  be 
alleged  which  raise  the  promise  to  pa}r,  and  it  is  necessary  to 
aver,  in  a  complaint  or  declaration  on  such  a  contract,  either 
that  an  assessment  has  been  levied  and  a  certain  amount  col- 
lected thereon,  which  the  society  refuses  to  pay,  or  that  the 
society  has  neglected  or  refused  to  levy  an  assessment  upon  its 
members  and  to  pay  to  the  plaintiff  the  amount  which  would 
have  been  realized  from  such  an  assessment.  The  want  of 
such  an  averment  is  a  fatal  defect  on  demurrer,  on  motion  in 
arrest  of  judgment,  or  when  the  question  is  raised  for  the  first 
.time  in  the  court  to  which  an  appeal  has  been  taken,  for  there 
is  not  only  an  omission  to  state  any  facts  to  show  the  ground 
of  the  society's  liability,  but  there  is  also  a  want  of  data  to 
show  the  amount  of  such  liability,  or  from  which  it  ma}'  be 
computed.  Where,  however,  the  contract  provides  that  the 
society  shall  levy  an  assessment  upon  its  members  and  pay  to 
the  beneficiary  the  proceeds  thereof,  not  exceeding  a  certain 
sum,  there  is  a  division  of  authority  as  to  whether  it  is  neces- 
sary to  allege  either  a  neglect  to  levy  suclfassessment  and  the 
amount  which  would  have  been  realized  had  it  been  levied, 
or  that  an  assessment  had  been  levied  and  the  payment  of  the 
proceeds  refused.  One  line  of  authorities  holds  that,  as  the 
society  has  set  the  limit  to  its  liability,  and  held  out  the  hope 
that  so  large  an  amount  may  be  realized  from  an  assessment, 
the  beneficiary  may  declare  as  upon  an  express  promise  to  pay 
the  maximum  amount  named  in  the  contract,  Leaving  the 
society  to  aver,  as  a  matter  of  defense,  the  facts  which  show 
the  amount  of  the  liability  to  be,  in  fact,  less  than  that  limit.1 

•Supreme  Lori^e  v.  Kni^M,   117  Mutual  v.   Frohard,    184   111.  ?28;  35 

Ind.   489;  20  N.  Bast.   Rep  179;  Elk-  N.  East.  Rep.  642;   Metropolitan    \s- 

hart  Mutualv.    Eoughton,  103  Ind.  sociation   v.  Windover,  137   III.  417; 

286;  Luders'  Ex'rv.  Ins.  Co.,  VI  Fed.  27  N.  East.  Rep.  588;  Suppiger  v.  As- 

Rep.   465;  4  McCrary,    149;    Kansas  Bociation,  20  111.  App.  595;  Lawler  v. 

Protective   Union   v.  Whitt,  86  Kan.  Murphy,  58  Conn.  2lJ4. 
760;  14  Pae.  Rep.  275;  see  also  Union 


G46  ACTION    ON    CONTRACT    OF    SOCIETY. 

The  other  line  of  authorities  holds  that  as  the  maximum 
amount  is  not  absolutely  promised,  but  is  merely  mentioned 
as  the  limit  of  liability,  the  rule  of  pleading  is  not  changed  by 
such  words  of  limitation.1  It  has  also  been  held,  in  another  line 
of  cases,  that  to  entitle  plaintiff  to  recoyer  in  an  action  at  law  for 
damages,  he  must  allege  in  his  declaration  and  show  on  the 
trial  that  the  society  has  levied  an  assessment  upon  its  surviv- 
ing members  to  pay  the  death  loss,  has  collected  the  amount  of 
such  assessment,  and  has  failed  to  pay  the  sum  so  collected; 
that  it  must  appear  both  in  the  'declaration  and  in  evidence 
that  the  society  has  in  its  hands  the  money  collected  by  assess- 
ment, which  it  ought  to  pay  to  plaintiff  as  beneficiary  entitled  to 
it;  that  if  the  association  has  failed  to  make  the  required  assess- 
ment, or,  having  made  the  assessment,  has  neglected  to  collect 
the  same,  plaintiff's  remedy  is  in  some  other  form  of  action  or 
proceeding.2  Where  the  complaint  or  declaration  alleges  that 
the  amount  due  the  plaintiff  is  a  certain  sum,  the  failure  to 
deny  such  allegation  must  be  taken  as  an  admission  that  that 
sum  is  due  on  the  certificate,  unless  it  is  invalid  for  reasons 
stated  in  defense  of  the  action.3  An  allegation  in  a  complaint 
or  declaration,  that  an  assessment  under  the  articles  of  incor- 
poration and  by-laws  at  the  time  of  the  death  of  the  member, 
and  for  a  long  time  thereafter,  far  exceeded  the  sum  named  in 
the  certificate,  refers  to  an  assessment  such  as  the  policy  calls 
for,  and  evidence  is  admissible  to  show  what  an  assessment 
under  the  contract  would  have  amounted  to.4 

§  335.  Pleading?  evidence,  breach  of  promise  to  pay.— 
It  is  evident  that,  in  those  courts  where  it  is  held  that  the  fix- 
ing of  a  limit  to  the  amount  which  will  be  paid  as  a  benefit 

1  Curtis  v.  Ins.  Co.,  48  Conn.  98;  2  Smith  v.  Association,  24  Fed.  Rep. 
Earnshaw  v.  Society,  68  Md.  465;  12  685;  Newman  v.  Association,  76  Iowa 
Atl.  Rep.  884;  11  Cent.  Rep.  508;  56;  33  N.  W.  Rep.  662;  Tobin  v.  So- 
Taylor  v.  Union,  94  Mo.  35;  6  S.  W.  ciety,  72  Iowa  261;  33  N.  W.  Rep.  663; 
Rep.  71;  New  Home  Association  v.  Baily  v.  Association,  71  Iowa  689;  27 
Hagler,  23  111.  App.  457;  Deardorff  v.  N.  W.  Rep.  770. 
Association,  89  Cal.  599;  27  Pac.  Rep.  3Doty  v.  Association,  9  N.  Y. 
158;  Jackson  v.  Association,  73  Wis.   Supp.  42. 

507;  Oriental  Association  v.  Glancey,       4  Martin  v.   Association,  16  N.  Y. 
70  Md.  101;  16  Atl.  Rep.  391;  Mutual  Supp.  279. 
Association  v.  Tuggle,    138  111.  428; 
28  N.  East.  1066;  Meyers  v.  Ass'n,  17 
N.Y.  Supp.  727. 


ACTION    ON    CONTRACT   OF    SOCIETY.  G4T 

fund,  floes  not  change  the  rule  of  pleading,  so  as  to  permit  the 
claimant  to  declare  as  upon  an  express  promise  to  pay  a  speci- 
fied amount,  a  certificate  of  membership,  providing  that  on 
the  death  of  a  member  and  due  proof  thereof,  an  assessment 
shall  be  levied  upon  the  members  holding  certificates,  and  that 
the  amount  collected  from  such  assessment  shall  be  paid  to 
his  beneficiaries,  not  to  exceed  a  certain  sum,  is  not  admissible 
in  evidence  under  a  declaration  which  avers  a  promise  by  de- 
fendant to  pay  a  specific  sum.  In  so  deciding,  it  was  said  : 
"  The  certificate  of  membership  read  in  evidence  was  clearly 
inadmissible  under  the  declaration,  which  does  not  aver  that 
any  assessment  was  made,  or  the  number  of  members  liable  to 
assessment,  or  the  amount  that  could  have  been  collected  by 
such  assessment,  or  aver  any  facts  showing  a  duty  by  defend- 
ants to  make  such  assessment,  but  avers  a  promise  by  defend- 
ants to  pay  plaintiffs  a  specific  sum  of  s-k<  )<>().  The  certificate 
read  to  support  this  averment  is  a  conditional  promise  to  pay 
the  amount  collected  of  members  by  assessments,  less  cost  and 
expense  of  collection.  There  is  a  fatal  variance  between  the 
averments  and  the  proof  offered  to  sustain  them."  l  But 
where  the  opposite  rule  obtains,  such  a  certificate  is  admissible 
under  an  averment  of  an  express  promise  to  pay.* 

§  336.  Averment  of  a  demand  for  an  assessment. — It  is 
not  necessary,  in  order  to  lay  the  foundation  for  a  recovcrv. 
that  the  plaintiff  shall  make  or  aver  that  he  has  made  a 
demand  upon  the  society  for  an  assessment  upon  its  members 
to  pay  the  death  loss.     The  duty  to  make  an  assessment  is 

1  New  Home  Life  Association    v.  sum   under  and  subject  to  certain 

Hagler,  '2-i  111.   A  pp.   457;    Supreme  conditions  was  not  admissible  inevi- 

Council  v.  Anderson.  61  Texas  29(5.  dence    under    an   allegation   of   t'.ie 

•'  See  §  340  et  acq.  In  .Supreme  complaint  that  the  society  had 
Council  v.  Anderson,  supra,  it  was  agreed  to  pay  the  full  sum  of  *.">.(  nit; 
held  that  where  a  society  agreed  to  that  such  a  variance  was  fatal.  Set- 
pay  '"a  sum  not  exceeding  $5,000  in  Oriental  Ins.  Co.  \.  Glancey,  7c  Mil. 
accordance  with  and  under  the  pro-  101;  l6Atl.  Bep.  :'>'.H:  Curtis  v.  Mu- 
visions  of  the  laws  governing  said  tual  Ben.  Life  Co.,  48  Conn.  98;  Tay- 
fund,"  the  liability  of  the  society  was  lor  v.  Union,  !»4  Mo.  85;  Earnshaw 
prima  facie  the  full  sum  of  $5,000,  v.  Sun  Mutual.  68  Bid.  465.  Hut  in 
and  that  the  burden  was  on  the  Hefferman  v.  Supreme  Council,  40 
society  to  set  up  and  show  thai  the  Mo.  App.  606,  it  was  held  that  the 
plaintiff  was  entitled  to  recover  a  variance  was  doI  material,  since  it 
less  sum:  bul  it  was  also  held  that  a  could  not  have  misled  the  society. 
certificate   agreeing    to   pay   such  a 


648  ACTION    ON    CONTRACT    OF    SOCIETY. 

imposed  upon  the  society  by  contract,  and  if  the  society  faib 
in  this  duty,  the  'beneficiary  has  the  right  to  his  proper 
remedy  for  such  failure.1  The  furnishing  of  satisfactory  proof 
of  the  death  of  the  member  to  the  society,  according  to  the 
provisions  of  the  certificate  issued  to  him,  should  be  held  to 
be  a  demand  for  payment,  and,  impliedly,  a  demand  upon  the 
society  to  procure  the  necessary  fund  by  an  assessment  if 
need  be.2 

§337.  Plea  setting  up  that  no  fund  lias  been  raised  by 
assessment. — In  an  action  of  assumpsit  on  a  certificate  of 
membership,  the  society  pleaded  that  it  was  provided  in  its 
by-laws  that  the  money  to  be  paid  on  the  death  of  any  mem- 
ber should  be  produced  by  an  assessment  of  $2,  to  be  levied 
upon  each  of  the  remaining  members  of  the  series  of  member- 
ship to  which  the  decedent  belonged,  and  that  no  such  assess- 
ment had  been  levied  or  ordered.  The  court  said:  "This 
plea  is  bad,  as  it  is  the  duty  of  the  officers  of  the  defendant  to 
order  an  assessment  on  the  death  of  a  member,  and  to  permit 
the  defendant  to  set  up  the  failure  of  duty  of  its  officers,  as  a 
reason  for  defeating  the  plaintiff's  action,  would  be  to  allow 
it  to  take  advantage  of  its  own  wrong.1' ''  By  a  certificate  of 
insurance  issued  to  a  member  of  a  society,  there  was  to  be 
paid  to  the  beneficiary,  if  living,  in  ninety  days  after  due 
proof  of  the  death  of  said  member,  a  sum  equal  to  the  amount 
received  from  a  death  assessment,  but  not  to  exceed  three 
thousand  dollars.  The  fourth  condition  thereof  provided  that 
"the  death  claim  under  this  contract  shall  be  payable  in 
ninety  days,  after  satisfactory  proof  of  the  death  of  the  said 
member  shall  have  been  furnished,"  as  therein  provided. 
In  a  suit  by  the  beneficiary,  after  the  death  of  the  member, 
the  society  objected  to  the  right  of  the  plaintiff  to  maintain 
the  action  to  recover  the  amount,  upon  the  ground  that  the 
promise  to  pay  was  contingent,  not  absolute,  as  payment  was 
to  be  made  out  of  a  special  fund,  the  death  fund,  to  be  pro- 
cured from  an  assessment  on  the  members  of  the  society,  and 
that  the  beneficiary  was  restricted  to  the  fund  thus  specified; 

1  Smith    v.    Association,    24    Fed.  2  Freeman  v.  Society,  42  Hun  252. 

Rep.  685;  Kansas   Protective   Union  3Birnbaum  v.  Passenger  Conduct- 

v.  AVhitt,  36  Kans.  760;  14  Pac.  Rep.  or's,  etc.,  15  Weekly  Notes  of  Cases 

275;  S.   W.   Mutual  v.   Svvenson,   49  (Pa.)  518:    see  Hankinson  v.   Paige, 

Kans.  449.  31  Fed.  Rep.  184-188-189. 


ACTION    ON    CONTRACT   OF    SOCIETY.  649 

and,  further,  that  there  was  no  proof  of  the  existence  of  such 
a  fund.  The  court  said  :  "  It  may  well  be  that  the  beneficiary 
would  be  thus  restricted,  in  case  of  due  effort  by  the  society 
to  assess  its  members  liable  to  assessment  therefor.  An  amis- 
sion to  make  an  assessment  which,  if  made,  would  produce  a 
fund  equal  or  greater  than  the  claim,  would  create  an  obliga- 
tion against  the  society,  the  same  as  if  it  had  the  fund  on  hand 
from  which  to  make  payment.  It  could  not  lie  by,  and  omit. 
to  put  into  operation  the  means  possessed  by  it  to  obtain  the 
fund,  and  omit  payment  because  of  its  own  neglect  of  duty. 
This  would  be  to  take  advantage  of  its  own  wrong;,  and  it 
would  pperate  as  a  fraud  on  the  beneficiary  under  the  cer- 
tificate, since  the  obligation  to  raise  the  fund  b\7  assessment, 
when  shown  to  be  adequate  for  that  purpose,  would  take  the 
place  of  the  fund  in  determining  the  question  of  liability.  So, 
too,  the  furnishing  of  satisfactory  proof  of  the  deatli  of  the 
member  of  the  society,  according  to  the  provisions  of  the  cer- 
tificate issued  to  him,  should  be  held  to  be  a  demand 'for 
payment,  and  impliedly  would  also  be  a  demand  upon  the  com- 
pany to  procure  the  necessary  fund  by  assessment  if  need  be. 
It  should  be  further  observed  that  according  to  the  fourth 
condition  upon  which  the  certificate  was  issued  and  accepted, 
payment  was  to  be  made  absolutely  in  ninety  days  after  satis- 
factory proof  of  the  death  of  the  member  was  duly  furnished 
to  the  society.  So,  too,  the  provision  in  the  body  of  the  cer- 
tificate, thai  payment  should  be  made  of  a  sum  equal  to  the 
amount  received  from  a  death  assessment,  not  to  exceed  the 
sum  specified,  in  ninety  days  after  due  proof  of  the  death  of 
the  member  was  given,  implies  an  obligation  upon  the  company 
to  proceed  and  make  the  necessary  assessment  to  raise  the  fund 
within  the  time  during  which  it  was  provided  that  the  claim 
should  remain  in  abeyance.  For  all  these  reasons,  the  objec- 
tion to  recovery,  on  the  ground  that  there  was  no  proof  of  the 
existence  of  a  death  fund,  must  be  held  of  no  avail."1 

§  3:'>s.  Evidence,  effect  of  the  collection  of  an  assessment 
by  society. — In  an  action  on  a  certificate  of  membership,  it 
appeared  in  evidence  that  the  society  had  levied  an  assessment 
upon  its  members  and  realized  the  benefit  fund  with  which  to 

1  Freeman  v.  National  Benefit  So-  v.  Society,  t  N.  Y.  Supp.  375;  Law<- 
ciety   42  Hun    (N.  Y.)  253;    O'Brien    lerv.  Murphy,  58  (una.  2lJ4. 


650  ACTION    ON    CONTKACT    OF    SOCIETY. 

pay  plaintiff's  claim.  The  society  offered  to  show  the  invalid- 
ity of  the  plaintiff's  claim  by  proving  the  falsity  of  certain 
representations  made  by  the  member  upon  procuring  the  cer- 
tificate, which  representations  were  made  a  part  of  the  con- 
tract. The  evidence  was  excluded,  under  the  objection  of  the 
society,  upon  the  ground  that,  as  the  society  had  acquired  the 
money  sought  to  be  recovered,  by  virtue  of  assessments  levied 
upon  and  paid  by  its  members  for  the  purpose  of  paying  the 
claim,  it  thereby  became  the  agent  of  its  members  for  the  pur- 
pose of  paying  the  money  upon  the  claim,  and  had  no  right  to 
contest  its  validity  or  withhold  the  payment  of  the  money. 
But,  on  appeal,  it  was  held  that  the  court  erred  in  so  excluding 
the  evidence ;  that  it  was  the  right  and  duty  of  the  society 
to  protect  its  members  and  the  benefit  fund  from  all  invalid 
claims.1 

§  339.  Evidence  of  the  amount  which  might  have  been 
realized  by  assessment. — In  one  case2  proof  was  introduced 
showing  prima  facie  that  an  assessment  upon  the  members 
liable  to  contribute  to  the  death  fund  would  have  been  ade- 
quate to  the  payment  of  the  loss  sued  for.  This  proof  was  the 
report  of  the  society  made  to  the  state  insurance  department 
only  a  few  days  after  the  death  of  the  member.  The  evidence 
was  objected  to,  as  not  the  best  evidence  of  the  facts  stated 
therein;  and  it  was  claimed  that  the  books  of  the  society 
should  have  been  produced.  The  court  said  :  "  The  report  so 
made  was,  however,  of  equal  dignity  and  certainty  with  the 
records  of  the  society.  It  was  made  up  by  the  society  from 
its  records — indeed,  was  itself  a  record  required  by  law  to  be 
made  by  the  society,  and  filed  in  the  insurance  depa.  tment  as 
a  record.  It  was,  therefore,  competent  evidence  of  the  facts 
therein  stated  and  certified,  and  the  evidence  of  (a  witness) 
went  merely  to  calculations  in  elucidation  of  those  facts,  in 
connection  with  the  table  of  the  defendant's  assessment  rates, 
which  evidence  and  table,  it  seems,  were  received  as  proof 
without  objection.  The  report  to  the  insurance  department, 
with  the  other  proof  above  referred  to,  made  &  prima-  fade 

1  Mayer  v.   Equitable  Reserve,    42  Iowa  462;  39  N.  W.  Rep.  709;    see 

Hun  (N.  Y.)237;   see   also   Swett  v.  §309. 

Citizens  Mutual,    78  Me.  541;  7  Atl.  2  Freeman  v.  National  Benefit  Soci- 

Rep.   394;    Bock  v.  A.  O.  U.  W.,75  ety,  supra. 


ACTION    ON    CONTRACT   OF    SOCIETY.  651 

case  against  the  defendant  on  the  point  of  its  ability  with  due 
diligence  to  raise  a  death  fund  sufficient  to  answer  the  claim  in 
suit;  and  no  proof  whatever  was  given  or  offered  to  gainsay 
such  prima  facie  case.  If  it  might  have  been  the  case,  as  is 
suggested  by  the  defendant's  counsel,  that  all  persons  who 
were  members  of  the  society  December  31,  1885,  when  the  re- 
port to  the  insurance  department  was  made,  were  not  also 
members  when  barrow  (the  deceased  member)  died,  but 
twenty  days  previously;  and  that  the  members  named  in  the 
report  may  not  have  been  solvent  and  able  to  pay  an  assess- 
ment if  one  had  been  made;  or,  that  each  and  every  as- 
sessment would  have  been  paid  if  made,  these  were  matters  to 
be  shown  by  the  defendant  against  what  was  fairly  inferable 
from  the  case  as  made  by  the  plaintiff  on  the  evidence  sub- 
mitted. The  report  was  made  during  the  time  within  which 
there  should  have  been  an  assessment  to  meet  and  answer  the 
plaintiff's  claim.  It  was,  therefore,  to  be  inferred,  in  the  ab- 
sence of  all  proof  to  the  contrary,  that  it  contained  the  facts 
constituting  a  proper  and  adequate  basis  therefor." ' 

AVhere  each  notice  of  assessment  contained  a  statement  of 
the  number  of  members  liable,  as  for  instance — "  AVe  have 
now  eleven  hundred  members  and  are  adding  thereto  daily" — 
"  We  have  eleven  hundred  and  eighty-five  members,"  etc.,  the 
court  held  such  statements  admissible  to  show  the  number 
of  members;  and,  it  being  shown  that  such  statements  were 
made  only  a  short  time  before  the  death  of  a  member,  the 
court  held  that  this  evidence  had  a  tendency,  a1  least,  to  prove 
that,  at  his  death,  there  were  as  many  as  our  thousand  mem- 
bers, and  was  properly  submitted  to  the  jury  tor  that  pur- 
pose.' 

Parol  evidence  is  admissible  to  show  the  number  of  mem- 
bers in  good  standing,  in  order  to  ascertain  the  sum  recov- 
erable  under  the  contract.1     The  number   of   certificates  of 

'See   Kaw  Valley   Association  v.  this  case  the  certificate  provided  for 

Lemke, 40  Kans.  142  and  (><>1;  l'.»  I'ae.  an  ;ississhh'mI    of  one  dollar  on   each 

Rep.  837;  O'Brien  v.  Society,  4  N.  Y.  surviving  member  to  pay   the  death 

Supp.  275;  51    Idm   495;  117   N.    Y.  loss.bul  also  provided  that  the  amount 

810;  22  X.  Bast.  Rep.  954;  Cuahman  to  he  paid  to  the   beneficiary  >1 Id 

V.   Society.    11   N.   Y.  Sll|)|).   428.  'lot  exceed  one    thousand  dollars. 

'Fairchild  v.    North    Eastern  Mu*      » Benefit  Society  v. Fietaam,  Adm'r 

tual  Life  Associ.  tion,  51  Vt.  613.     In    97  111.  474. 


C52  ACTION    ON    CONTRACT    OF    SOCIETY. 

membership  which  have  been  issued  by  a  society  is  prima 
facie  evidence  of  the  number  of  members  in  good  standing, 
and  the  burden  is  on  the  society  to  show  that  any  persons,  to 
whom  certificates  of  membership  have  been  issued,  have  ceased 
to  be  members  by  forfeiture,  suspension  or  otherwise.  It  has 
peculiarly  within  its  possession  the  means  of  showing  such 
facts,  and  to  require  a  plaintiff  to  prove  a  negative  in  case  of 
each  person  who  has  been  received  into  membership,— that 
such  person  had  not  been  suspended,  or  had  not  forfeited  his 
membership — would  be  unreasonable  and  impracticable.1 

§34:0.  Burden  of  proof. — Where  the  society  covenants  to 
maintain  a  death  fund,  to  levy  assessments  whenever  the  fund 
shall  have  become  diminished  or  depleted  and  to  pay  there- 
from a  certain  sum  of  money  on  the  death  of  the  member,  it 
is  not  incumbent  on  the  plaintiff  to  show  that  the  fund  is 
sufficient  to  pay  the  demand,  or  that  the  proceeds  of  proper 
assessments  will  be  sufficient.2  Where  the  contract  provides 
that  the  society  shall  pay  as  many  times  a  certain  sum  of 
money  as  there  are  members  at  the  time  of  the  death  of  the 
member  insured,  or  where  it  merely  provides  that  an  assess- 
ment shall  be  levied  upon  the  surviving  members  and  the  pro- 
ceeds thereof  paid  to  the  beneficiary,  the  burden  is  on  the 
plaintiff  to  prove  by  proper  evidence  the  number  of  members 
of  the  association,  or  the  amount  which  would  have  been 
realized  from  the  assessment.  Where  the  contract  provides, 
in  substance,  that  an  assessment  shall  be  levied  upon  the  sur- 
viving members,  and  the  proceeds  thereof,  not  exceeding  a  cer- 
tain named  sum,  shall  be  paid  to  the  beneficiary,  the  society 
is,  according  to  some  authorities,  prima  facie  bound  to  pay 
the  maximum  amount  of  its  liability  as  specified  in  the  con- 
tract, and  the  burden  is  on  the  society  to  prove  that  a  less 
amount  would  have  been  realized  by  an  assessment.3 

^eskernv.  Association,  30  Minn.  3  Supreme  Lodge  v.  Knight,  117 
406.  Ind.  489;  20  N.   East.  Rep.  479:  Elk- 

2  Cushman  v.  Society,  13  N.  Y.  hart  Mutual  v.  Houghton,  103  Ind. 
Supp.  428;  La  Manna  v.  Accident  2  6;  2  N.  East.  Rep.  763;  Lawler  v. 
Company,  10  N.  Y.  Supp.  221;  Harl  Murphy,  58  Conn.  294;  Silvers  v.  As- 
v.  Ins.  Co.,  74  Iowa  39;  36  N.  W.  sociation,  94  Mich.  39;  Leuders'  Exr. 
Rep.  880;  Wadsworth  v.  Co.,  132  N.  v.  Ins.  Co.,  12  Fed.  Rep.  465;  4  Mc- 
Y.  540;  29  N.  East.  Rep.  1104;  af-  Crary,  149;  Kansas  Protective  Union 
firming  9  N.  Y.  Supp.  711.  v.  Whitt,  36  Kans.  760;  14  Pac.  Rep. 


ACTION    ON    CONTRACT    OF    SOCIETY.  653 

In  one  case  the  court  said : x  "  The  certificates  each  provide 
that,  upon  the  death  of  the  assured,  appellee  is  entitled  to 
$1,000,  or  so  much  as  may  be  realized  from  one  assessment. 
The  undertaking  in  each  certificate  is  for  $1,000.  unless  an 
assessment  will  not  produce  that  much.  That  an  assessment 
would  not  produce  $2,000  we  think  is  a  matter  of  defense  to 
be  set  up  by  appellant.  It  would  be  difficult,  if  not  impossible, 
for  appellee  to  know  how  many  members  of  the  association 
there  are.  The  books  of  the  association  doubtless  show  the 
number.  These  books  are  in  the  possession  and  custody  of  the 
officers  of  the  association.  If  the  members  are  such  in  number 
that  an  assessment  would  not  produce  $2,000,  that  fact  is 
known  to  the  officers  of  the  association,  and  they  should  set 
it  up  in  an  answer,  and  make  good  the  answer  by  proof, 
as  they  readily  could,  if  true."  And  in  another  case  it 
Avas  said:2  "Despite  some  decisions  to  the  contrary,  this 
court  can  not  hold  otherwise  than  that  when  suit  has  to  be 
brought,  the  recovery  should  be  for  the  maximum  insure. I. 
unless  the  defendant  shows  by  pleadings  and  proof  that  said 
sum  should  be  reduced.  *  *  In  the  absence  of  any  proof 
to  the  contrary,  the  sum  recoverable  should  be  against  the 
corporation  for  the  maximum  insured.  Any  other  rule  would 
make  this  insurance  scheme  a  mere  delusion  and  snare."  Put 
on  the  other  hand,  there  are  many  authorities  holding  that 
the  fixing  of  a  maximum  amount  which  the  society  will  pay 
from  the  proceeds  of  an  assessment  does  not  relieve  the  plaint  ill" 
from  the  burden  of  showing  the  amount  which  would  have 
been  realized  from  an  assessment  made  pursuant  to  the  con- 
tract.'    It  has  been  held  that  in  an  action  on  a  certificate  of 

275;  S.  W.  Association  v.    Swenson,  '  Elkhart  .Mutual  v.  Houghton,  ntr 

49    Eans.    449:    30   Pac.     Rep.   405;  pra. 

Suppiger  v.  Association,  20  111.  App.  -  Lenders'  Ex'r  v.  Ius.  Co.,  supra. 

51):);  Union  Mutual  v.  Frohard,   lot  8  Earnshaw  v.  Sun  Mutual,  68  Md. 

111.  228;  25  N.  East.  Rep.  648;  Metro-  465;  12  Atl.  Rep.   884;  11  Cent.   Rep. 

pol it  an  Association  v.  Windover,  187  508;  Curtis  v.  Ins.   Co.,  48  Conn.  98; 

111.417;  27  N.  East.  Rep.  538;  Cove-  Fairchild  v.  Association,  51    \'\.  618; 

nant  Mutual  v.  Hoffman,  110  111.603;  Ball  v.  Association.  <;i  N.  h.  j'.u:  g 

Supreme  Council  v.    Anderson,    61  Atl.  Rep.  l<c>;  Deardorff  v.  Associa- 

Tezas  296;  Bentz  v.   Association.  40  tion,  89  Cal.  599;  'J7   Pac.  Rep.  158. 
Minn.    202;    41    N.   W.    Rep.    1037; 
Jackson  v.  Association.   ~s  Wis.  403; 
41  N.  W.  Rep.  708;  see  §335. 


G54  ACTION    ON    CONTRACT    OF    SOCIETY 

life  insurance  issued  by  a  mutual  benefit  society,  by  the  terms 
of  which  the  plaintiff  is  entitled  to  the  amount  of  one  assess- 
ment, not  exceeding  five  thousand  dollars,  he  can  recover 
nominal  damages  only  in  the  absence  of  evidence  of  the  amount 
of  one  assessment.1 

§  341.  Nominal  damages  in  an  action  at  law. — When  the 
contract  provides,  in  substance,  that,  upon  the  death  of  a  mem- 
ber in  good  standing,  an  assessment  shall  be  levied  upon  the 
surviving  members  and  the  proceeds  thereof  paid  over  to  the 
beneficiary,  there  is  a  conflict  of  authority  upon  the  question 
as  to  the  proper  measure  of  damages  in  an  action  at  law  for  a 
breach  of  the  agreement  to  levy  the  assessment  and  pay  the 
money.  Some  authorities  hold  that  in  such  an  action  nominal 
damages  only  are  recoverable.2  A  certificate  provided  that 
uan  assessment  shall  be  levied  upon  all  the  members  holding 
certificates  in  force  at  the  time  of  the  death  of  said  members, 
for  the  full  amount  named  in  their  respective  certificates,  and 
the  sum  so  collected  on  such  assessments  *  *  the  associa- 
tion agrees  to  pay  and  cause  to  be  paid  to  *  *  ,  but  in  no 
case  shall  the  payment  under  this  certificate  exceed  $5,000." 
The  court  said :  "  The  theory  of  the  plaintiff  is  that  if  the  cer- 
tificate has  not  been  forfeited,  and  the  defendant  disclaims  all 
liability  to  pay  the  claim,  and  refuses  to  make  the  assessment, 
it  thereby  becomes  liable  to  pay  the  maximum  sum  named  in 
this  certificate,  provided  its  membership  was  large  enough  to 
have  produced  such  sum,  if  an  assessment  had  been  made,  and 
all  the  members  had  paid  their  assessments.  But  in  our  opin- 
ion the  plaintiff's  position  can  not  be  sustained.  The  extent  of 
the  defendant's  obligation  is  fixed  by  the  certificate  of  member- 
ship. The  association  does  not  agree  to  pay  any  sum  from  any 
general  fund,  nor  does  it  provide  any  general  fund.     It  merely 

1  Ball  v.  Association,  sujyra;  Fair-  ciety,  72  Iowa  261;   33  N.  W.  Rep. 

child  v.  Association,  supra;  O'Brien  663;   Smith   v.   Association,  24   Fed. 

v.    Society,  46  Hun  426;  O'Brien  v.  Rep.  685;  see  Garretson  v.  Equitable 

Society,  4  N.  Y.  Supp.  275;  51  Hun  Mutual,  74  Iowa  419;  38  N.  W.  Rep. 

495;  117  N.  Y.  310;  22  N.  East.  Rep.  127,  where  verdict  for  full  amount 

954;  Martin  v.  Association,   9  N.  Y.  limited  in  the  certificate  was  per- 

Supp.  16;  Cram  v.  Association,  11  N.  mitted  to  stand  because  no  question 

Y.  Supp.  462.  of   error  in  assessment  of  damages 

-  Newman  v.  Association,  76  Iowa  was  raised  in  the  record. 
56;  33  N.  W.  Rep.  662;  Tobin  v.  So- 


ACTION   ON    CONTRACT    OF    SOCIETY.  C55 

agrees  to  levy  an  assessment  and  pay  over  such  sum  as  mavbe 
collected  upon  it.  If  the  company,  doubting  or  denying  its 
liability  in  a  given  case,  refused  to  levy  an  assessment,  the 
contract  is  not  thereby  changed,  and  the  company's  liability 
extended.  It  may  be  conceded  that  a  wrongful  refusal  to  make 
an  assessment  would  be  a  breach  of  the  contract.  But  we  are 
unable  to  see  how  more  than  nominal  damages  could  be  re- 
covered for  such  breach.  No  evidence  was  introduced  in  this 
case,  and  none  could  have  been,  showing  how  many  members 
would  have  paid  their  assessment,  and  how  many  would  have 
chosen  to  refuse  to  make  payment,  and  suffer  the  only  conse- 
quence of  such  refusal,  namely,  a  forfeiture  of  their  member- 
ships, nor  can  either  party  invoke  any  presumptions  as  to  how 
many  would  have  paid,  and  how  many  would  have  refused  pay- 
ment. As  to  the  wisdom  or  propriety  of  this  form  of  insur- 
ance, or  the  difficulties  in  the  way  of  realizing  the  benefit  under 
the  certificates  issued,  the  courts  have  no  responsibility.  It  is 
for  them  to  enforce  the  contracts,  according  to  their  terms. 
which  the  parties  have  made  for  themselves."1  In  Smith  v. 
Association,  supra,  the  contract  of  insurance,  in  substance  pro- 
vided that  on  the  death  of  a  member  an  assessment  should  be 
levied  upon  all  the  members,  and  the  sum  so  collected  on  such 
assessments  the  society  agreed  well  and  truly  to  pay  to  the 
beneficiary,  but  in  no  case  should  the  payment  exceed  the  sum 
of  twenty -five  hundred  dollars.  In  discussing  the  measure  of 
damages  in  a  suit  at  law  upon  the  certificate,  Dyer,  J.,  in  an 
opinion  concurred  in  by  Justice  Harlan,  said:  "Conceding 
that  the  heirs  of  the  decedent  are  the  legal  beneficiaries  en- 
titled to  the  benefits  conferred  by  the  certificate,  what  arc  the 
rights  of  the  parties  respecting  a  recovery  upon  the  certificate 
on  failure  of  the  association  to  pay  the  death  loss  ?  The  the<  »rv 
upon  which  this  suit  is  brought  is  that,  as  in  the  case  of  an  or- 
dinary life  policy  of  insurance,  the  plaintiffs  are  entitled  to  re- 
cover the  full  sum  named  in  the  certificate  without  regard  to 
the  levy  of  any  assessment  upon  certificate  holders,  or  the 
collection  by  the  association  of  any  amount  so  levied.  After 
deliberate  consideration  of  the  question,  we  are  of  opinion 
that  this  is  an  erroneous  view  of  the  relation  and  rights  of 
the  parties  under  the  certificate.     The  association  covenants 

1  Newman  v.  Association,  supra. 


656  ACTION    ON    CONTKACT    OF    SOCIETY. 

in  its  agreement,  not  absolutely  to  pay  the  sum  of  $2,500,  but 
to  levy  an  assessment  upon  all  members  holding  certificates  at 
the  time  of  the  death  of  the  deceased  member,  and  to  pay  the 
sum  so  collected  on  such  assessment  as  a  benefit  to  the  desig- 
nated beneficiaries,  such  payment  in  no  case  to  exceed  the  sum 
of  $2,500.  Thus  it  is  apparent  that  the  obligation  of  the  asso- 
ciation is  only  to  pay  whatever  amount  is  collected  from  other 
certificate-holders,  not  exceeding  the  sum  named.  Suppose 
that  no  assessment  whatever  is  made,  or  suppose,  an  assess- 
ment being  made,  nothing  is  collected,  is  the  association  liable 
absolutely  for  the  sum  named  in  the  certificate  in  an  action 
like  the  present  ?  If  not,  what  is  the  remedy  for  failure  to 
levy  an  assessment,  or  for  failure  to  collect  the  amount  of  an 
assessment  actually  made,  but  not  responded  to  by  the  holders 
of  certificates?  If  it  appeared  that  an  assessment  had  been 
levied,  and  the  amount  thereof  had  been  collected,  but  its  pay- 
ment to  the  beneficiary  refused,  there  would  be  no  doubt,  in 
the  ;  bsmce  of  other  grounds  of  defense,  of  the  plaintiff's  rights 
to  recover  in  a  money  action  the  sum  so  collected,  not  exceed- 
ing $2,500.  But  this  state  of  the  case  is  not  alleged.  And, 
indeed,  it  was  admitted  on  the  argument  that  no  assessment 
was  levied  to  pay  this  loss,  and,  therefore,  no  sum  had  been 
collected  for  that  purpose  by  the  association  from  certificate- 
holders.  Hence  the  difficulties  above  suggested.  It  seems 
clear  that  the  right  acquired  by  virtue  of  the  certificate  held 
by  the  decedent  was  to  an  assessment  upon  all  members  hold- 
ing certificates,  and  the  payment  of  the  amount  collected  on 
such  assessment  within  a  prescribed  period  of  time,  the  assess- 
ment not  to  exceed  the  limit  of  the  particular  certificate.  We 
were  at  first  disposed  to  think  that  it  was  incumbent  upon  the 
plaintiffs,  in  any  view  of  the  case,  to  make  a  demand  for  an 
assessment  in  order  to  lay  the  foundation  of  a  recovery.  But 
we  are  now  convinced  that  the  duty  to  make  an  assessment 
was  imposed  by  the  contract,  and  if  the  association  failed  in 
this  duty,  the  beneficiaries  had  the  right,  by  appropriate  pro- 
ceedings to  compel  the  performance  of  it.  Undoubtedly,  a 
court  in  such  a  proceeding  could  enforce  the  discharge  of  that 
duty  by  compulsory  measures  against  the  officers  and  mana- 
gers of  the  association,  or,  perhaps,  through  its  own  officers, 
by  making  the  necessary  assessment  and  collection  at  the  cost 
of  the  association,  or  of  the  certificate-holders  assessed. 


ACTION    ON    CONTRACT    OF    SOCIETY.  C57 

It  is  quite  clear  that  every  certificate-holder  agreed  to  look 
for  payment  to  the  specific  mode  set  out  in  the  certificate;  that 
is,  by  assessments  and  collections  within  a  certain  limit  as  to 
the  amount  to  be  assessed.  The  holders  of  certificates  are  co- 
members  of  the  association,  who  have,  in  effect,  agreed  to 
insure  each  other,  and  have  stipulated  as  to  the  mode  in  which 
their  liability  to  the  heirs  or  devisees  of  a  deceased  member 
may  be  ascertained  and  enforced.  But  this  plan  would  be 
defeated  altogether  if  such  heirs  or  devisees  could  obtain  a 
judgment  against  the  association  for  the  amount  limited  in  the 
certificate,  without  regard  to  any  assessment  or  any  amount 
collected  on  an  assessment,  and  enforce  payment  in  the  or- 
dinary mode  in  which  judgments  for  money  are  enforced.  To 
this  it  may  be  replied  that  the  association  is  liable  to  suit  for 
breach  of  covenant  if  it  fails  to  make  the  required  assessment. 
This  may  be  so.  But,  if  so,  what  would  be  the  measure  of 
damages  ?  To  say  that  the  measure  of  damages  would  be  the 
amount  of  the  certificate,  with  the  interest  from  date  when  it 
should  have  been  paid,  and  to  give  judgment  therefor  against 
the  association,  would  be  to  ignore  the  fact  that  the  parties 
have  provided  a  special  mode  for  the  payment  of  the  sum 
named  in  the  certificate,  viz.,  an  assessment  against  and  col- 
lection from  the  living  members.  The  ordinary  life  policv 
rests  upon  the  promise  of  the  company  to  pay  the  sum  therein 
named.  A  policy-holder  in  such  a  company  is  under  no  obliga- 
tion to  pay  anything  for  the  benefit  of  the  holders  of  other 
policies.  Here  the  insured  pays  seven  dollars  to  insure  a  mem- 
ber and  agrees  to  meet  mortuary  assessments  from  time  to 
time,  as  set  out  in  the  conditions  of  the  certificate.  The  asso- 
ciation does  not  contract  absolutely  itself  to  pay  the  sum 
named  in  any  certificate,  but,  as  we  have  seen,  only  that  it  will 
assess  the  living  members,  and  pay  over  within  a  certain  time 
the  sum  collected  on  such  assessment.  *  *  To  maintain  this 
action  it  must  appear  that  the  association  has  in  its  hands  the 
money  collected  by  assessment,  which  it  ought  to  pay  to  the 
plaintiffs  as  the  beneficiaries  entitled  to  the  same." 

§  342.     Substantial  damages  in  an  action  at  law. — The 

opinions  of  the  supreme  court  of  Iowa,  Justice  Harlan  and 

,)  udge  Dyer,  are  of  great  weight  in  determining  such  questions, 

and  they  have  certainly  covered  the  ground  thoroughly  in  the 

42 


658  ACTION    ON    CONTRACT    OF    SOCIETY. 

presentation  of  the  arguments  in  favor  of  the  position  assumed 
by  them  in  these  decisions.  When  the  language  of  these  opin- 
ions has  been  quoted,  all  has  been  said  which  can  be  said  from 
that  standpoint.  But  there  is  another  line  of  decisions  hold- 
ing that  substantial  damages  may  be  recovered  on  such  a  con- 
tract in  an  action  at  law.  As  has  frequently  been  said  of  con- 
tracts of  insurance  upon  the  assessment  plan,  the  scheme  is  a 
peculiar  one.  While  courts  can  not  refuse  to  construe  and 
enforce  peculiar  contracts,  it  is  their  duty  to  construe  them  in 
such  a  way  that  a  society  may  not,  because  of  the  peculiar 
form  and  terms  of  its  contract  with  individuals,  avoid  an  action 
at  law  for  the  breach  of  its  agreement,  and  such  a  construction 
of  the  .contract  as  will  deprive  the  beneficiary  of  his  right  to 
damages  at  law  for  a  breach  thereof  is  to  be  avoided,  unless 
that  right  is  waived  in  express  terms.1  The  contract  of  insur- 
ance is  prepared  by  the  society  in  advance,  and  in  the  con- 
struction of  its  provisions  the  member  and  his  beneficiary  have 
no  hand  whatever.  According  to  a  familiar  maxim  of  the  law, 
the  provisions  of  this  contract  are  to  be  construed  most 
strongly  against  the  society.  It  is  safe  to  presume  that  some 
available  and  substantial  measure  of  indemnity  for  the  breach 
of  the  agreements  made  by  the  society  was  contemplated  by 
the  parties,  and  it  is  right  and  just  to  presume  that  they  have 
left  the  law  to  apply  its  usual  remedies,  where  the  society  has, 
in  the  contract,  placed  no  limitation  upon  the  remedy  to  be 
pursued  by  the  beneficiary.  All  the  authorities  agree  that  the 
contract  has  been  broken,  when  the  society  wrongfully  neglects 
or  refuses  to  levy  an  assessment,  and  the  question  under  dis- 
cussion is,  as  to  whether  such  wrongful  neglect  or  refusal  shall 
be  held  to  be  a  technical  or  a  substantial  breach  of  that  con- 
tract, or,  to  speak  more  exactly,  whether  for  such  a  breach  of 
contract  substantial  or  merely  nominal  damages  may  be  re- 
covered. To  hold  that  such  neglect  or  refusal  is  a  technical 
breach  of  the  contract  for  which  nominal  damages  only  can  be 
recovered  at  law,  and  to  lay  down  the  rule  as  stated  in  the 
cases  above  quoted,  namely,  that  the  beneficiary  can  sue  at 
law  only  for  the  proceeds  of  an  assessment,  and  not  for  dam- 
ages for  failure  to  collect  the  proceeds  in  the  manner  provided 

1  Burland  v.  Association,  47  Mich.  424;  Hankinson  v.  Page,  31  Fed.  Rep. 
184. 


ACTION    ON    CONTRACT    OF    SOCIETY.  659 

for,  gives  to  the  parties  an  anomalous  standing  in  court.  For 
it  places  the  parties  to  the  contract  in  an  anomalous  and 
peculiar  position,  when  the  society  is  permitted  in  a  court  of 
law  to  say  that  nothing  but  nominal  damages  is  due  to  the 
plaintiff,  because  of  its  own  default  in  not  doing  what  it  has 
agreed  to  do;  when  the  society  is  permitted,  as  in  Newman 
v.  Covenant  Mutual,  siipra,  to  set  up  in  bar  of  the  action,  as 
to  all  but  nominal  damages,  its  own  default  in  not  making  and 
collecting  an  assessment,  and  paying  the  proceeds  to  the  bene- 
ficiary. 

As  sustaining  the  necessity  of  this  position,  it   is  not   suffi- 
cient to  say  that  the  contract  shows  upon  its  face  that  the 
society  has  no  funds  with  which  to  pay  a  judgment,  or  a  claim 
against  it  for  a  death  loss,  except  from  the  proceeds  of  assess- 
ments.    Courts  have  nothing  to  do  with  the  physical  impossi- 
bility of  collecting  money  on  executions  on  their  judgments; 
and  if  they  had,  insolvent  debtors  would* be  active  in  setting 
up  their  insolvency  in  resisting  claims  against  them.     If  the 
contract  is  to  be  scrutinized  upon  this  principle,  and  the  ade- 
quacy of  the  remedy  looked  to,  it  might  be  answered  that  a 
court  of  equity  might  find   it  difficult  to  enforce   a  decree 
against  a  foreign  corporation,  requiring  it  to  levy  an  assessment; 
that  such  a  court  might  find  it  exceedingly  difficult  to  collect 
anything  in  the  manner  suggested  by  Judge  Dyer  in  Smith  v. 
Covenant  Mutual,  «»j>/'a,  namely,  "through  its  own  officers, 
by  making  the  necessary  assessment  and  collection  at  the  cost 
of  the  association,  or  of  the  certificate  holders  assessed, "  or  to 
enforce  a  forfeiture  of  membership  in  the  society  for  non-pay- 
ment of  such  an  assessment.     Nor  can  the  necessity  of  such  a 
position  be  sustained  upon  the  theory  that,  while  the  damages 
at  law  are  so  uncertain  and  speculative  as  to  be  beyond  the  possi- 
bility of  legal  measurement,  equity  furnishes  a  direct  and  ade- 
quate remedy.     The  suggestion  that  equity  can  enforce  the 
specific  performance  of  such  a  contract  presents  to  our  minds. 
at  first  impression,  an  easy  solution  of  many  perplexing  ques- 
tions, but  an  inquiry  into  the  matter  develops  quite  as  much 
uncertainty,  and  quite  as  many  difficulties  as  can  possibly  arise 
in  the  measurement  of  damages  at  law.     The  membership  in  a 
mutual  benefit  society   is  constantly  changing.     On  the  one 
hand,  new  members  are  constantly  coming  into  the  society, 


660  ACTION    ON    CONTRACT    OF    SOCIETY. 

while  on  the  other,  members  die  from  time  to  time,  and 
others  forfeit  their  membership.  Suppose  that  a  beneficiary, 
should  file  his  bill  in  equity  for  specific  performance  of  the 
contract  to  levy  and  collect*  the  assessment,  and  at  the  end  of 
six  months,  or  what  is  far  more  likely,  a  year  and  six  months, 
at  the  hearing  of  the  cause,  the  chancellor  should  find  that  the 
beneficiary  is  entitled  to  the  benefit  fund,  and  that  an  assess- 
ment ought  to  have  been  levied  upon  the  surviving  members, 
— say  within  three  months  after  the  death  of  the  assured; 
what  decree  shall  the  chancellor  enter?  Shall  he  order  an 
assessment  upon  all  members  in  good  standing  at  the  date  of 
such  decree  %  Such  an  assessment  might  not  be  binding  upon 
members  who  had  entered  since  the  death  of  the  assured,  for 
the  by-laws  of  such  societies  usually  provide,  and  the  plan  of 
mutual  benefit  insurance  contemplates,  that  a  member  shall  not 
be  subject  to  an  assessment  for  losses  and  expenses  incurred 
prior  to  the  date  of  Bis  admission.  The  levy  of  an  assessment 
for  losses  and  expenses  incurred  prior  to  the  admission  of  a 
member  is  invalid  as  to  the  new  member,  and  non-payment  Of 
such  an  assessment  will  not  work  a  forfeiture  of  his  policy.1 

But  assuming,  for  the  further  investigation  of  this  question, 
that  under  the  insurance  contract  in  the  particular  instance, 
the  society  may  lawfully  assess  new  members  for  deaths 
occurring  prior  to  their  admission  into  the  society,  will  such  a 
decree  be  just  to  the  parties  ?  If  between  the  time  when  the 
society  should  have  levied  the  assessment,  and  the  time  when 
the  decree  of  the  court  is  executed,  the  membership  liable  to 
assessment  has  decreased  by  five  hundred  members,  the  court 
is  not  rendering  to  the  beneficiary  the  full  measure  of  his 
rio-ht.  And  if  during  that  time  the  membership  of  the  society 
has  increased  in  the  number  of  five  hundred  members,  the 
decree  will  give  to  the  beneficiary  a  larger  benefit  than  he  is 
entitled  to,  and  will  operate  unjustly  and  oppressively  to  the 
society.  Shall  the  chancellor  enter  an  order  requiring  the 
society  to  assess  only  those  members  who  were  in  good  stand- 
ino-  at  the  date  when  the  assessment  should  have  been  levied  % 
If  so,  what  account  is  to  be  taken  of  those  members  who  have 

1  Roswell  v.  Union,   13  Fed.  Rep.    J.  L.  33;  Farmers'  Mutual  v.  Chase, 
840;  Ins.  Co.  v.  Houghton,  6  Gray  77;    56  N.  H.  311. 
Columbia  Ins.  Co.  v.  Kenyon,  37  N. 


ACTION    ON    CONTRACT    OF    SOCIETY.  CGI 

since  that  time  died,  or  forfeited  their  membership?  If  the 
innocent  beneficiary  is  not  to  suffer  this  loss,  an  adjustment 
must  be  made  upon  the  same  principles  by  which  courts  of 
law*  measure  the  damages  for  a  breach  of  the  contract  to  levy 
the  assessment.  "What  decree,  then,  shall  the  chancellor 
enter,  which  will  demonstrate  the  alleged  peculiar  and  ade- 
quate remedy  which  may  be  administered  by  a  court  of 
equity  ? ' 

No  case  can  better  illustrate  the  inefficiency  of  the  remedy 
in  equity  against  a  foreign  corporation  than  Newman,  Trustee, 
v.  Covenant  Mutual,  etc.,  supra.  After  the  judgment  of  the 
lower  court  in  the  action  at  law  was  reversed  on  the  ground 
that  in  such  an  action  no  more  than  nominal  damages 
could  be  recovered,  and  after  the  cause  was  remanded  to 
that  court,  the  plaintiff  amended  the  prayer  of  his  petition 
and  demanded  that  the  society  proceed  to  make  an  assessment 
upon  its  members,  collect  the  money  and  pay  off  the  certificate. 
A  hearing  was  had,  and  a  decree  was  entered,  ordering  an  as- 
sessment to  be  made.  The  remainder  of  the  proceedings  and 
the  judgment  may  be  stated  in  the  language  of  the  supreme 
court  of  Iowa :  "  The  defendant  refused  to  make  the  assess- 
ment ordered  by  the  decree  of  the  court.  This  decree  was 
entered  January  5,  18S8,  and  the  defendant  was  ordered  to 
make  return  of  its  doings  in  that  behalf  by  the  first  day  of  the 
next  term  to  which  the  cause  was  continued.  On  the  5th  day 
of  April,  1888,  it  being  the  March  term  of  said  court,  a  sup- 
plemental petition  was  filed,  in  which  the  decree  of  the  former 
term  was  recited,  and  it  was  therein  alleged  that  the  defend- 
ant had  disregarded  and  defied  said  decree  by  neglecting 
and  refusing  to  make  any  assessment  whatever,  and  that  by 
reason  thereof  the  plaintiff  was  unable  to  realize  any  thing  upon 
said  certificate,  and  that  defendant  has  a  large  amount  of 
assets  and  property,  and  praying  for  a  judgment  for  the 
amount  of  the  certificate,  with  interest  from  the  time  an  assess- 
ment should  have  been  made  before  the  suit  was  first  insti- 
tuted. A  demurrer  t<>  this  supplemental  petition  was  overruled. 
The  defendant  stood  on  its  demurrer,  and  the  court,  upon 
the  record  before  it,  and  without  the  introduction  of  further 

1  See  decrees  in  Lindsey  v.  Society,  Newman  v.  Association,  76  Iowa  56; 
84    Iowa     734;    50  N.   W.    Rep.    29;   40  N.  \V.  Kep.  87. 


6G2  ACTION   ON   CONTRACT   OF    SOCIETY. 

evidence,  entered  judgment  as  prayed  in  the  supplemental 
petition.  It  is  claimed  that  this  judgment  is  erroneous,  and 
that  the  only  power  possessed  by  the  court  was  to  punish  the 
officers  of  the  company  for  contempt  in  disobeying  the  order 
to  make  the  assessment.  We  think  the  judgment  was  not 
erroneous.  It  may  be  that  the  officers  of  this  association 
honestly  believed  when  proofs  of  loss  were  made  that  the  as- 
sociation was  not  liable,  or,  rather,  was  under  no  legal  obliga- 
tion to  make  an  assessment  to  pay  the  loss.  The  record  shows 
that  they  were  in  error  in  refusing  to  provide  for  the  pay- 
ment of  the  loss.  They  postponed  it  for  nearly  six  years.  It 
is  well  understood  that  the  membership  of  these  assessment 
associations  are  constantly  changing;  that  new  members  are 
not  assessable  for  losses  which  occur  before  they  become 
members;  and  that  assessments  can  be  made  only  on  the 
members  liable  to  pay  when  the  losses  occur.  It  appears 
from  the  answer  of  the  defendant  that  when  this  loss  was  pay- 
able there  were  at  least  5,000  members  liable  to  assessment  in 
the  sum  of  one  dollar  each  for  the  payment  of  this  death  claim. 
No  court,  so  far  as  we  have  observed,  has  determined  just 
what  is  the  liability  of  one  of  these  assessment  companies. 
This  court,  and  most  of  the  other  courts  of  the  country,  have 
held  that  an  action  at  law  to  recover  the  amount  of  the  policy 
will  not  lie.1  The  defendant's  position  is  that,  if  the  officers 
refuse  to  make  an  assessment,  the  remedy  is  punishment  for 
contempt,  which  is  a  fine  of  $50.  This  is  a  safe  refuge,  and, 
if  adopted  by  the  courts,  it  discharges  the  corporation  from 
all  liability,  and  for  that  matter  the  court  in  this  case  would 
have  been  powerless  to  punish  the  officers  for  contempt. ' 
They  are  be}^ond  the  jurisdiction  of  the  court  in  the  state  of 
Illinois.  Some  one  should  answer  for  any  shrinkage  in  an  as- 
sessment now  to  be  made  on  account  of  the  delay.  The  party 
should  suffer  for  it  who  is  in  the  wrong,  and  the  defendant  is 
obviously  that  party.  It  should  make  good  to  the  plaintiff 
what  he  has  lost  by  its  breach  of  its  contract  to  make  an  as- 
sessment, collect  the  money,  and  pay  it  to  the  plaintiff.  To 
require  less  upon  the  record  made  in  this  case  would  be  a 
license  to  natural  persons  to  organize  corporations  as  a  cover 

1  (The  court  is  evidently  mistaken  in  this  assertion;  see  §  333  and  cases 
cited). 


ACTION    ON    CONTRACT    OF    SOCIETY.  GG3 

to  the  grossest  frauds.  Something  is  said  in  argument  to  the 
effect  that  the  court  had  no  jurisdiction  to  enter  the  decree 
because  the  defendant  is  an  Illinois  corporation.  The  proposi- 
tion is  not  sound.  The  defendant  was  properly  brought  into 
court,  the  decree  was  a  personal  decree,  and  the  judgment  is  a 
personal  judgment.  It  can  not  be  enforced  by  execution  by 
the  courts  of  this  state,  but,  being  a  personal  judgment  against 
the  corporation  defendant,  it  will  be  entitled  to  full  force  and 
credit  in  the  courts  of  Illinois." ' 

The  truth  is,  the  more  we  analyze  this  plan  of  insurance, 
and  inquire  into  the  remedial  rights  of  the  parties  to  the  con- 
tract, the  greater  and  more  numerous  seem  to  be  the  legal  dif- 
ficulties which  present  themselves.  It  may  be  that  it  is  im- 
possible to  give  to  these  contracts  a  logical  and  harmonious 
construction.  Any  rule  which  a  court  may  lay  down  as  to 
the  remedial  rights  of  the  parties  seems  to  do  violence  to 
some  provision  of  the  contract.  Under  these  circumstances, 
courts  have  generally  brushed  away,  as  far  as  possible,  those 
peculiarities,  anomalies  and  inconsistencies  which  relate  to 
matters  of  detail,  and  have  attempted  to  effectuate  the  gen- 
eral purposes  of  the  societies  by  the  application  of  general 
principles  of  law.  A  reasonable  construction  of  the  above 
contract  between  the  society  and  the  member  is  that  the  bene- 
ficiary shall  look  to  the  assessment  made  and  collected  by  the 
society,  for  the  payment  of  the  death  loss; 3  and  an  answer  or 
plea  by  the  society,  admitting  its  liability,  setting  up  the  levy 
of  an  assessment,  notice  thereof  to  its  members  as  required 
by  the  contract,  and  alleging  that  no  money  had  been  received 
by  means  thereof,  within  the  time  stipulated  for  the  pay- 
ment of  such  assessments,  would  certainly  state  a  good  de- 
fense to  the  action.  But  where  the  society  denies  all  liability 
on  the  contract  and  refuses  to  make  an  assessment  and  pay 
the  benefit  fund,  the  law  will  give  to  the  beneficiary  his  or- 
dinary remedy  for  breach  of  a  contract,  and  hold  thesocietvto 
respond  in  damages  in  such  an  amount  as  might  have  bean 
collected  by  making  the  assessment.     It  ought  not  to  be  a 

1  Newman  v.  Covenant  Mutual,  76  39  N.  W.  Rep.  312;  Hesinger  v.  Aaso- 

Iowa  56;    40  N.    W.    Rep.    87.    see  c-iation,  41  Minn.  510;  43  N.  \V.  Rep, 

Lindsey  v.  Society,  84  Iowa  7:54.  481. 
2 Kerr  v.  Association,  39  Minn.  174; 


664:  ACTION    ON   CONTRACT   OF    SOCIETY. 

matter  of  great  difficulty  to  show  with  reasonable  certainty 
what  could  have  been  realized  upon  an  assessment  at  any  given 
tima.  Members  die  from  time  to  time,  and  assessments  are 
made  every  few  weeks.  Some  contracts  provide  that  they 
shall  not  be  levied  more  than  once  in  each  calendar  month. 
Even  where  the  contracts  provide  that,  after  proof  of  death 
of  a  member  in  good  standing,  an  assessment  shall  be  levied 
without  delay,  the  officers  of  the  society  may  exercise  their 
discretion  about  waiting  a  reasonable  time  before  making  the 
assessment  for  the  payment  of  the  death  loss.1  Very  fre- 
quently the  levy  is  postponed  for  a  few  days,  in  order  that  no- 
tice of  assessments  for  two  or  more  death  losses  may  be  given 
at  one  time.  It  will  be  an  easy  matter  to  show  what  was 
realized  upon  an  assessment  made  at  a  time  when  the  assess- 
ment upon  the  particular  certificate  of  membership  sued  on 
might  have  been  made.  And  where,  by  custom,  or  the  con- 
tract of  insurance,  the  assessments  are  made  in  one  month  for 
all  death  losses,  of  which  proof  has  been  made  in  the  preced- 
ing month,  the  amount  may  often  be  reduced  to  a  certainty. 
It  is  practically  impossible  for  litigation  to  arise  on  such  a 
contract  of  insurance,  unless  the  society  denies  its  liability, 
and  refuses  to  make  an  assessment.  When  the  society  con- 
tests the  claim,  it  certainly  can  not  complain  that  the  ordinary 
legal  remedy  is  unjust  or  unreasonable. 

§  343.  Burden  of  proof  and  measure  of  damages  dis- 
cussed.— Courts  of  law  have  in  many  cases  taken  notice  of  the 
fact  that  ordinary  insurance  companies  "  send  their  agents  all 
over  the  land,  with  directions  to  solicit  and  procure  applica- 
tions for  policies,  furnishing  them  with  printed  arguments  in 
favor  of  the  value  and  necessity  of  life  insurance,  and  of  the 
special  advantages  of  the  corporation  which  the  agent  repre- 
sents," that  "  they  pay  these  agents  large  commissions  on  the 
premiums  thus  obtained,"  etc.  And,  from  these  facts,  these 
courts  lay  down  certain  doctrines,  and  among  them,  that  the 
powers  of  an  insurance  agent  are  prima  facie,  co-extensive  with 
the  business  intrusted  to  his  care.2  Courts  may  with  equal  pro- 
priety refuse  to  shut  their  eyes  to  the  fact  that  mutual  benefit 
societies  send  men  all  over  the  land  to  establish  subordinate 

'People's  Ins.  Co.  v.  Allen,  10  2 Union  Mutual  v.  Wilkinson,  13 
Gray  (Mass.)  297.  Wall.  222. 


ACTION    ON    CONTRACT    OF    SOCIETY.  G65 

lodges,  furnishing  them  with  printed  arguments  in  favor  of 
assessment  insurance,  as  against  ordinary  "  straight  line " 
insurance — wherein  these  societies  hold  out  to  their  members, 
and  all  persons  solicited,  the  hope  and  expectation  that  they 
may  pay  the  maximum  sum  limited  in  the  certificate;  and  from 
these  facts  courts  may  reasonably  and  justly  hold  that  prima 
facie  they  are  liable  for  the  maximum  amount  named  in  their 
policies,  and  must  assume  the  burden  of  alleging  and  proving 
that  an  assessment  would  have  realized  a  less  amount.  The 
society  has  set  the  maximum  sum  which  it  will  pay  in  any 
event;  it  has  within  its  possession  the  records  which  show  the 
number  of  members  in  good  standing,  and  from  which  it  can 
know  with  reasonable  certainty  how  much  can  be  realized  from 
an  assessment,  and  this  rule  can  not  operate  harshly  or  oppres- 
sively. In  Newman  v.  Covenant  Mutual,  supra,  stress  is  laid 
upon  the  fact  that  no  evidence  could  possibly  be  introduced 
showing  how  many  members  would  have  paid  the  assessment 
on  the  certificate,  and  how  many  would  have  refused  to  do  so, 
and  the  court  says :  "  Nor  can  either  party  invoke  any  pre- 
sumptions as  to  how  many  would  have  paid,  and  how  many 
would  have  refused  payment."  If  these  insurance  societies 
carry  on  business  with  proper  method  and  attention  to  details, 
a  society  should  be  able  to  show  by  proper  evidence,  and  witli 
reasonable  accuracy,  the  proportion  of  those  who  forfeit  their 
membership  by  non-pa}rment  of  an  assessment,  as  compared 
with  those  who  pay  an  assessment.  From  the  fact  that  the 
contract  is  unilateral — payment  of  an  assessment  not  being 
enforceable — it  must  not  be  assumed  that  a  great  number  of 
11 H -i nbers  forfeit  their  membership  at  the  levy  of  an  assessment. 
M<n  enter  these  societies  for  insurance  upon  their  lives  to  secure 
at  their  death  a  fund  for  the  benefit  of  their  wives,  children 
and  other  dependents,  and  it  is  reasonable  to  suppose  thai  they 
will  use  every  endeavor  to  pay  an  assessment,  when  non-pay- 
ment forfeits  the  right  of  their  beneficiaries  to  such  fund.  The 
history  and  growth  of  mutual  benefit  societies  are  a  refutation 
of  the  idea  that  the  lew  of  an  assessment  causes  a  great  num- 
ber of  members  to  forfeit  their  membership. 

There  are  strong  reasons  why  a  beneficiary  may  invoke  pre- 
sumptions as  to  how  many  members  will  pay  and  how  many 
will  refuse  payment.     When  a  man  becomes  a  member  of  a 


GQQ  ACTION    ON    CONTRACT    OF    SOCIETY. 

society,  and  enters  into  a  contract  of  insurance  for  the  benefit, 
after  his  death,  of  those  who  are  dependent  upon  him,  he  does 
so  upon  the  faith  that  the  society  has  the  ability  to  carry  out 
its  part  of  the  contract.  The  society  has  presented  itself  to 
the  world  as  an  insurance  organization.  In  the  printed  matter 
which  it  carefully  circulates,  it  reminds  the  reader  of  his  duty 
to  provide  for  those  dependent  upon  him  by  insurance  upon 
his  life,  and  recommends  the  scheme  adopted  by  it,  as  the  best 
method  by  which  men  may  accomplish  that  object.  "When  a 
loss  has  occurred  upon  its  contract,  a  society  should  not  be 
heard  to  argue  that  its  means  of  raising-  the  benefit  fund  are 
so  speculative  and  uncertain  that  the  damages  for  a  failure  to 
collect  the  proceeds  of  an  assessment  can  not  be  measured. 
But  it  is  just  to  presume,  in  favor  of  the  beneficiary  and 
against  the  society,  that  every  member  will  pay  his  assessment 
on  the  certificate,  and  to  require  the  society  to  show  by  satis- 
factory evidence  the  number  of  those  who  would  not  have  paid. 
The  society  has  it  in  its  power  to  demonstrate  to  a  mathemat- 
ical certainty  the  result  of  an  assessment  on  the  certificate. 
When  a  claim  is  made  against  the  society  on  one  of  its  con- 
tracts recognizing  him  as  a  member  in  good  standing,  the  pre- 
sumption is  that  the  assured  died  in  good  standing,  and  the 
burden  is  on  the  society  to  allege  and  show  the  fact  that  he  did 
not  so  die.  It  can,  therefore,  levy  an  assessment  upon  its  mem- 
bers which  they  must  pay  within  the  stipulated  time  after 
notice,  on  penalty  of  forfeiture  of  their  claims  upon  the 
society.  The  proceeds  of  this  assessment  may  be  held,  pend- 
ing the  investigation  or  litigation  of  the  claim,  and  if  the 
claim  is  defeated,  may  be  used  in  the  payment  of  other  losses. 
While  a  society  might  probably  levy  an  assessment  under  such 
circumstances  and  conditions  as  would  estop  it  from  denying 
the  validity  of  a  claim,  yet  the  mere  levy  of  an  assessment  for 
a  death  loss,  unaccompanied  by  any  act  recognizing  the  valid- 
ity of  a  contract  of  insurance,  is  not  a  waiver  of  a  forfeiture; 
and  the  fact  that  after  the  death  of  a  member,  the  other  mem- 
bers paid  in  their  voluntary  assessments  to  meet  the  amount 
of  insurance,  gives  the  beneficiary  no  additional  rights.1  As 
said  by  Judge  Dyer  in  Smith  v.  Covenant  Mutual,  supra,  "  if 

1  Swett  v.  Citizens  Mutual,  78  Me.  541;  17  Atl.  Rep.  394;  Mayer  v.  Equi- 
table Reserve,  42  Hun  (N.  Y.)  237. 


ACTION    ON    CONTRACT    OF    SOCIETY.  GG7 

it  appeared  that  an  assessment  had  been  Levied,  and  the 
amount  thereof  had  been  collected,  but  its  payment  to  the 
beneficiaries  refused,  there  would  be  no  doubt,  in  the  absence 
of  other  grounds  of  defense,  of  the  plaintiff's  right  to  recover 
in  a  money  action,  the  sum  so  collected,  not  exceeding  $2,500." 
As  the  levy  of  an  assessment  does  not  of  itself  estop  the 
society  from  setting  up  "other  grounds  of  defense;"  as  the 
society  can,  by  complying  with  its  own  agreement  to  levy  an 
assessment  upon  its  members  measure  accurately  the  damages 
which  the  plaintiff  is  entitled  to  recover,  in  case  the  "'other 
grounds  of  defense  "  are  not  sustained  in  the  suit,  why  should 
not  the  plaintiff  "invoke  any  presumptions  as  to  how  many 
would  have  paid,  and  how  many  would  have  refused  pay- 
ment ? " 

Where  it  appears  that  the  society  might  by  the  levy  of  an 
assessment  have  paid  a  benefit  fund  in  full,  but  that  it  wrong- 
fully refused  to  make  the  assessment  until  it  was  doubtful 
whether  enough  could  be  realized  thereby,  a  court  of  equity 
may  decree  that  an  assessment  be  levied  and  the  proceeds  be 
paid  to  the  beneficiary,  and  that  the  society  pay  any  deficiency 
which  may  arise  from  the  assessment.1 

§  344.  Measure  of  damages  in  certain  cases. — A  mutual 
benefit  society  issued  a  certificate  of  membership,  agreeing, 
upon  the  death  of  a  member,  to  levy  an  assessment  of  one 
dollar  on  each  surviving  member,  and  to  pay  the  proceeds  of 
such  assessment  to  his  widow.  Afterward  in  November,  L869, 
the  member  disappeared.  In  June,  1871,  the  board  of  direct 
ors  of  the  society  passed  a  resolution  declaring  themselves 
satisfied  of  his  death,  and  ordering  an  assessment,  though  no 
regular  proof  of  his  death  was  ever  presented  as  required  by 
the  contract.  When  the  order  of  the  board  of  directors  was 
made,  there  were  six  hundred  and  forty-nine  members,  but  at 
the  time  of  his  disappearance  the  membership  was  much 
larger.  The  widow  and  the  society  could  not  agree  upon  the 
amount  which  should  be  paid  to  her.  and.  on  the  trial  of  an 
action  broughl  by  the  widow  againsl  the  society,  the  jury,  un- 
der the  charge  of  the  court,  found  a  verdict  lor  the  plaintiff 
for  the  sum  of  $649.  (  >n  the  appeal  of  the  widow,  the  supreme 
court  of  Georgia  held   that   the  amount  of  the  verdict   was 

1  Union  Mutual  v.  Frohard,  184 I1L  228. 


663  ACTION    ON    CONTRACT    OF    SOCIETY. 

substantially  correct;  that  the  assessment  should  be  made  on 
those  who  were  members  of  the  society  at  the  date  of  the 
resolution  of  the  directors,  and  not  on  such  as  were  members 
at  the  time  of  the  disappearance.  In  the  opinion  the  court 
said:  "  Whether  the  defendant  could  have  resisted  the  pay- 
ment of  the  plaintiff's  claim  for  want  of  proper  proof  of  Mil- 
ler's death,  if  the  foregoing  action  of  its  board  of  directors 
had  not  been  taken,  it  is  not  necessary  to  decide;  but  even  the 
action  of  the  board  of  directors  does  not  fix  the  time  of  Mil- 
ler's death.  Inasmuch  as  the  plaintiff  relies  on  this  action  of 
the  defendant's  board  of  directors  to  show  its  liability  to  her 
for  the  death  of  Miller,  the  basis  of  her  recovery  should  have 
baen.  the  number  of  members  belonging  to  its  company,  of 
Miller's  class,  liable  to  be  assessed  at  the  time  the  defendant 
recognize:!  the  death  of  Miller,  and  ordered  the  assessment  to  be 
made,  and  not  the  number  of  that  class,  which  belonged  to  its 
company  at  the  time  of  the  reported  disappearance  of  Miller, 
in  November,  1869,  the  defendant  not  being  satisfied  from  the 
evidence  then  before  it  (the  same  not  being  such  as  its  by-laws 
required)  that  he  was  dead.  The  defendant  is  made  liable,  not 
because  the  death  of  Miller  was  proved  in  accordance  with 
the  requirements  of  its  by-laws,  but  because  it  recognized  his 
death  in  June,  1871."  '  A  contract  to  pay  as  a  benefit  a  sum 
"  not  exceeding  $1,000,"  with  no  other  provisions  helping  it 
out,  is  an  agreement  to  pay  one  thousand  dollars.2 

By  its  contract  a  society  agreed  to  pay  "  an  amount  equal 
to  $1.50  for  each  certificate  in  force  at  the  time  such  amount 
shall  become  due,  but  not  to  exceed  $4,000  *  *  within 
ninety  days  after  the  receipt  by  the  association  of  due  notice 
and  proof  of  death  of  (the  member);  and  this  association 
promises  to  pay  the  full  amount  of  this  certificate  at  its 
maturity :  provided,  there  shall  be  sufficient  moneys  in  the 
fund  from  which  this  certificate  shall  become  payable;  and 
provided,  further,  that  said  moneys  shall  be  distributed  pro- 
portionately in  payment  of  this  and  any  other  certificate  be- 

1  Miller  v.  Georgia  Masonic,  57  Ga.  People,  18  Mich.  84;  Senserv.  Bower, 

221.     Presumption  of  death  by  rea-  1  Pa.  450;  Hull  v.  Rawls,  27  Miss.  471 ; 

son  of  absence  for  seven  years;  John-  Harris  v.  Harris,  8  111.  App.  57. 

son  v.  Johnson,  114  111.    611;  Rex  v.  '2  Robyn  v.  Supreme  Sitting,  55  Mo. 

Twyning,  2  B.   &  Al.  3S6;    Yates  v.  App.  198. 
Houston,  3  Texas  449;   Dixon  v.  The 


ACTION    ON    CONTRACT    OF   SOCIETY.  6G9 

coming  due  and  payable  the  same  quarter;  such  payment  in  no 
case  to  exceed  the  amount  named  in  this  certificate."  In 
determining  the  measure  of  plaintiff's  damages  in  a  suit  on 
this  certificate  the  court  said  :  "There  is  some  dispute  over 
the  terms  of  the  policy  in  relation  to  the  extent  of  the  defend- 
ant's liability  to  beneficiaries;  but  it  is  obvious,  Ave  think,  that 
the  obligation  is  to  pay  not  less  than  $1.50  for  each  certificate 
in  force,  nor  more  than  $4,000  to  be  paid  from  the  assessment 
fund.  *  *  An  action  for  the  full  amount  of  $4,000,  which 
would  in  any  case  be  the  limit  of  liability,  could  only  be  main- 
tained upon  its  being  shown  that  there  was  that  amount  in 
the  assessment  fund  subject  to  be  applied  to  the  claim  ratably 
with  others  in  the  same  quarter;  which  fact  is  not  alleged  or 
found.  *  *  The  measure  of  plaintiff's  damages  is,  there- 
fore, the  sum  of  $1.50  for  each  certificate  in  force."  '  A  cer- 
tificate declared  that  the  amount  therein  mentioned  should  be 
payable  from  the  death  fund  at  the  time  of  death,  or  from  any 
moneys  which  should  be  realized  to  the  fund  from  the  next 
assessment  and  that  "  no  claim  should  be  otherwise  due  or 
payable  except  from  the  reserve  fund,  as  hereafter  provided." 
It  also  provided  that  if  the  death  fund  was  insufficient  to  meet 
existing  claims  by  death,  an  assessment  should  then  be  made 
upon  every  member  at  the  date  of  the  death  last  assessed  for, 
and  80  per  cent,  of  the  net  proceeds  thereof  should  go  into 
the  death  fund.  The  constitution  provided  that  the  death 
fund  should  be  used  only  for  the  payments  of  death  claims: 
that  payment  should  be  made  to  the  beneficiaries,  of  the 
amount  to  which  they  were  entitled,  according  to  the  terms 
of  their  certificates;  that,  so  long  as  the  mortuary  fund  was 
sufficient  to  pay  existing  claims,  no  assessment  should  be 
made;  and  that,  whenever  a  single  assessment  was  insufficient 
to  meet  a  death  claim  in  full,  there  should  be  paid,  in  full 
satisfaction  of  such  claim,  a  sum  pro  rata  of  the  membership 
and  benefits  in  force  at  the  time  of  death.  The  company 
required  each  person  proposing  to  become  a  member  to  pay 
what  was  called  the  "first  assessment."  The  insured  was  the 
first  member  to  die,  and  the  death  fund  at  his  death  was 
insufficient  to  pay  the  claim,  and  assessments  were  made  to 
meet  it.     It  was  held  that  the  claim  was  not  satisfied  by  pay- 

1  Kerr  v.  Benefit  Association,  39  Minn.  174;  39  N.  W.  Rep.  312. 


670  ACTION   ON    CONTRACT    OF   SOCIETY. 

ing  the  amount  of  the  death  fund  o»  hand,  and  that  the  pro- 
ceeds of  the  assessment  made  to  meet  It  should  be  appro- 
priated to  the  full  satisfaction  thereof.1  A  recovery  may  be 
limited  to  the  amount  in  a  particular  fund,  or  to  the  amount 
which  may  be  brought  into  it  by  proper  assessments  according 
to  the  plan  of  the  society." 

A  certificate  set  forth  the  obligation  of  the  society  to  pay 
"  the  sum  of  five  thousand  dollars  from  the  mortuary  fund  of 
the  society,  and  not  otherwise,  except  from  the  reserve  fund 
as  hereinafter  provided,"  and  provided  that  all  claims  on  the 
mortuary  fund,  arising  between  stated  intervals  of  assessment, 
should  be  -psddpro  rata  out  of  the  next  succeeding  mortuary 
call,  "  but  not  to  exceed  the  face  of  each  certificate."  The 
society  was  held  to  be  liable  only  for  the  pro  rata  part  of  the 
mortuary  fund,  where  it  appeared  that  the  reserve  fund  was 
not  available.3  In  an  action  on  a  death  claim  for  $3,000, 
testimony  by  the  secretary  of  the  society  that  the  assessment 
levied  to  meet  plaintiff's  claim  produced  only  $600,  does  not 
preclude  a  recovery  for  a  larger  sum,  where  the  evidence 
shows  that,  in  circulars  and  advertisements  issued  by  it  and 
statements  made  by  its  officers  at  or  about  the  time  plaintiff's 
claim  matured,  it  claimed  to  be  prosperous  and  to  have  a 
large  membership  and  reserve  fund.4 

§  345.  Measure  of  damages  for  change  of  plan  of  insurance. 
— A  deceased  member  of  a  mutual  benefit  society  held  a  certifi- 
cate which  stipulated  that  it  should  be  governed  by  the  laws 
of  the  order  then  in  force  or  thereafter  enacted,  and  the  con- 
stitution provided  that  it  and  the  by-laws  should  be  amend- 
able by  the  supreme  lodge.  The  certificate  also  stipulated  for 
the  payment  on  his  death   to  his  beneficiary  of   $2,000,  or, 

1  Wadsworth  v.  Co.,  132  N.  Y.  540;  228;  Elkhart  Association  v.  Hough- 
29  N.  East.  Rep.  1104;  affirming  9  ton,  103  Ind.  286;  Kansas  Union  v. 
N.  Y.  Supp.  711.  Whitt,  36  Kan.  760;  Kansas  Union  v. 

2  Hesinger  v.  Association,  41  Minn.  Gardner,  41  Kan.  397;  Bentz  v.  As- 
516.  sociation,  40   Minn.  202;    O'Brien  v. 

sGyllenhammer  v.  Society,  24  N.  Society,  46  Hun  426;  4  N.  Y.  Supp. 

Y.  Supp.  930;  see  Wadsworth  v.  Co.,  275.     The  beneficiary  may  be  entitled 

132  N.  Y.  540;  29  N.  East.  Rep.  1104;  only  to  the  amount  of  an  assessment. 

La  Manna  v.  Accident  Co.,  10  N.  Y.  See  Kentucky  Mutual  v.  Turner,  89 

Supp.  221.     As  to  payment  from  re-  Ky.  666. 

serve  fund  and  from  assessments,  see  4  Wabash    Union  v.    James    (Ind. 

Union  Mutual  v.   Frohard,    134  111.  App.),  35  N.  East.  Rep.  919. 


ACTION    ON    CONTRACT    OF    SOCIETY.  671 

if  there  should  be  less  than  two  thousand  members  of  the  class 
to  which  he  belonged,  then  only  $1  for  each  member.  The 
number  of  members  increased  to  sixteen  thousand,  when,  by 
an  amendment  of  the  constitution  and  by-laws,  a  new  class 
was  established  with  an  assessment  based  on  life  expectancy, 
which  was  less  expensive  for  young  men  than  the  old  rank', 
but  was  more  expensive  for  old  men.  The  }Tounger  members 
of  the  old  class  were  rapidly  transferred,  and  at  the  deceased 
member's  death,  some  three  years  later,  only  one  hundred  and 
seventy-three  members  of  the  old  class  remained.  During 
his  membership  of  nine  years  he  had  paid  to  the  society 
$240.  The  new  plan  was  adapted  in  good  faith,  to  ben- 
efit the  society  in  general.  The  deceased  and  his  benefi- 
ciary, upon  learning  of  the  new  plan,  notified  the  society  that 
they  protested  against  it.  In  an  action  on  the  certificate,  set- 
ting up  these  facts  and  making  the  proper  allegations  as  to  the 
death  of  the  member  and  proof  thereof,  it  was  held  that  the 
beneficiary  could  recover  only  8173  on  the  certificate;  that 
the  change  of  plan  was  within  the  scope  of  the  powers  of  the 
society,  and  was  not  a  violation  of  the  contract  of  insurance 
made  with  the  deceased;  that  if  the  acts  of  the  society,  in  de- 
pleting the  class  to  which  deceased  belonged,  were  a  breach  of 
the  contract  of  insurance,  only  nominal  damages  would  be 
recoverable,  as  the  loss  occasioned  thereby  would  be  so  remote 
and  conjectural  as  not  to  form  the  basis  of  a  recovery.  Upon 
tli is  last  point  the  court  said:  "The  result  that  would  have 
followed  had  not  the  s}Tstem  been  changed  is  a  mere  matter  of 
speculation  and  conjecture.  It  can  not  be  said  that,  if  no 
change  had  been  made,  there  would  have  been  no  reduction  in 
the  numbers  of  the  class.  If  the  system  originally  adopted 
was  not  one  (and  this  the  facts  stated  make  very  probable) 
that  would  maintain  itself,  then  the  appellee  would  have  been 
much  worse  off  than  she  is  now.  Whether  it  would  have 
endured  can  only  be  conjectured.  The  damages  are  both  con- 
jectural and  remote.  There  is  no  connection  between  the 
change  in  the  system  and  the  depletion  of  the  class  of  which 
Ilussey  was  a  member,  that  can  be  Legally  said  to  be  proximate 
and  natural." ' 

1  Supreme  Lodge  v.  Knight,  117  Ind.  439;  20  N.  Bast.  Rep.  479. 


CHAPTEE  XXYI. 

PAYMENT  OF  THE  BENEFIT  FUND. 

§  346.     Payment  is  not  a  gift. 
347,  348.     Payment  of  the  benefit  fund,  rights  of  parties. 
349-351.     To  whom  the  money  is  payable  when  the  contract  is  for  the 
benefit  of  a  creditor  of  the  member. 

352.  Payment  from  reserve  fund. 

353.  Contract  to  surrender  the  certificate  when  the  fund  is  paid  by  the 

society. 

354.  Payment  of  the  fund  into  court,  interpleader  by  the  society. 

355.  Payment  of  a  less  amount  than  is  due,  receipt  in  full. 

356.  Settlement  procured  by  the  fraud  of  the  society. 

357.  A  member  may  not  enjoin  payment. 

358.  Payment  procured  by  fraud. 

359.  Right  to  double  payment. 

360.  Interest  on  the  amount  of  the  benefit  fund. 

361.  Proceedings  to  obtain  payment  of  judgment. 

362.  Restricting  the  operation  of  the  judgment  against  a  society. 

§  346.  Payment  of  the  fund  to  the  beneficiary  is  not  a 
gift. — The  payment  by  a  mutual  benefit  society  of  the  benefit 
fund  to  the  beneficiary  named  in  the  contract  of  insurance  is 
not  voluntary,  and  in  the  nature  of  a  gift.  It  is  the  fulfill- 
ment of  the  contract  of  insurance  entered  into  for  a  valuable 
consideration  between  the  member  and  the  society  for  the 
benefit  of  the  bsneficiary.  If,  therefore,  payment  be  made  by 
the  society  to  the  wrong  person,  under  the  mistaken  belief 
that  he  is  the  proper  beneficiary,  when  he  is  not,  the  society 
may  recover  the  money  back.1 

§  347.  Payment  of  the  benefit  fund,  rights  of  parties. — 
It  is  often  difficult  to  decide  whose  receipt  for  the  money  due 
on  a  certificate  will  discharge  the  society  from  further  liabil- 
ity, and  who  is  entitled  to  bring  an  action  against  the  society 

1  Townsend  v.  Crowdy,  8  C.  B.  (N.    McGiloray,  4  Gray  518;  National  Life 
S.)  98  E.  C.  L.  477;  Kelly  v.  Solari,  9   Ins.  Co.  v.  Minch,  53  N.  Y.  144;  Gil- 
Mees.  &  W.  54;  Dails  v.  Lloyd,  12  Q.    bert  v.  Moose,  104  Pa.  St.  74. 
B.  64  E.  C.  L.  531;  Appleton  Bank  v. 

(672) 


PAYMENT   OF    BENEFIT    FUND.  673 

when  it  has  refused  to  pay.  "Where  a  person  is  expressly  desig- 
nated as  the  beneficiary  of  the  certificate,  such  designation  is 
conclusive,  in  the  absence  of  some  question  of  insurable  in- 
terest, proper  change  of  beneficiaries,  or  rights  of  creditors. 
He  may  sue  for  and  recover  the  amount  due  at  the  maturity 
of  the  contract,  and  the  receipt  of  such  person  will,  generally 
speaking,  discharge  the  society  from  further  liability.  In  such 
case  the  legal  representative  of  the  member  has  no  claim  upon 
the  fund,  and  can  not  maintain  an  action  therefor.  But  where 
the  fund  forms  a  part  of  the  estate  of  the  member  and  is  be- 
queathed as  a  part  of  the  estate,  under  the  general  term  of 
"all  my  estate  and  effects,"  subject  to  the  payment  of  his 
debts,  it  is  not  payable  to  the  devisee,  but  to  the  administra- 
tor of  his  estate  for  due  administration  and  distribution.'  A 
contract  of  insurance  expressly  promised  "  to  pay  to  E.  P.,  his 
executors,  administrators  or  assigns,  for  the  sole  use  and  bene- 
fit of  "  his  four  children  named  therein,  a  certain  sum  of  money. 
After  his  death  the  question  arose  as  to  whether  the  money 
was  payable  to  the  administratrix  of  his  estate  or  directly  to 
his  children,  and  it  was  held  that,  as  the  insurance,  although 
for  the  sole  use  and  benefit  of  the  children,  was  payable,  not 
to  them,  but  by  the  terms  of  the  contract  to  his  own  legal 
representative,  the  administratrix  was  alone  entitled  to  the 
money.2  Where  the  contract  is  that  the  benefit  fund  shall  be 
paid  to  the  representative  of  the  member,  rather  than  to  the 
beneficiaries,  such  representative  is  the  only  proper  party  to 
maintain  an  action  for  its  recovery.  "When  collected,  the  fund 
is  held  by  him  as  trustee  under  an  express  trust  for  such  bene- 
ficiaries as  may  be  entitled  to  it.  This  doctrine  is  founded  on 
reason  as  well  as  authority  and  is  in  harmony  with  the  entire 
line  of  decisions  upon  this  question.  In  Gould  v.  Emerson,' 
the  contract  was  made  payable  to  the  assured,  his  executors, 
administrators  or  assigns,  for  the  benefit  of  his  widow,  if 
any.  and  Ins  surviving  child  or  children.  The  court  said  :  "The 
contract  of  the  insurance  company  having  been  made  with 

•  Wint  erhalter    v.    Association,  75  25  N.  East.  Rep.  716.  and  cases  cited; 
Cal.  245;  17  Pac.  Rep.  1.  Rindge  v.  Society,   140  Mass.  286;  15 

*  Stowe  v.  Phinney,  78  Me.   250:  3  N.  East.  Rep.  628. 
Atl.  Rep.  914;  2  N.  Eng.  Rep.  74;  see       3  99  Mass.  157. 
Flynn  v.  Association,   152  Mass.  288; 

43 


674  PAYMENT    OF    BENEFIT    FUND. 

the  assured,  his  executors,  administrators  and  assigns,  the  de- 
fendant, as  his  administrator,  might  by  law  collect  the  amount 
of  the  policy."  In  Bailey  v.  New  England  Ins.  Co.,1  the  as- 
sured procured  a  policy  upon  his  life  payable  to  him,  his  exec- 
utors, administrators  and  assigns  for  the  benefit  of  his  widow. 
Suit  was  brought  in  the  name  of  the  beneficiary  against  the 
company,  and  judgment  was  rendered  in  favor  of  the  defend- 
ants. The  court  in  referring  to  two  previous  decisions 2  makes 
use  of  the  following  language  :  "  The  principle  upon  which 
these  decisions  rest  is,  that  in  policies  of  this  kind  the  executor, 
administrator  or  assignee,  becomes  a  trustee  under  an  express 
trust,  and  the  legal  title  being  in  him,  he  can  maintain  an 
action  in  his  own  name  against  the  company.  It  therefore 
necessarily  follows  that  the  eestuis  que  trust  can  not  main- 
tain such  action,  but  must  have  their  rights  determined  be- 
tween themselves  and  the  trustee  in  other  forms  of  proceed- 
ing. This  brings  this  class  of  trusts  within  the  general  rules 
governing  all  trusts,  and  renders  the  practice  simple  and  uni- 
form. To  allow  cestuis  que  trust  to  maintain  actions  in  their 
own  names,  might  subject  insurers  to  several  suits  on  the  same 
policy,  or  call  upon  them  to  determine  who  has  the  beneficial 
interest,  or  force  them  to  resort  to  a  bill  of  interpleader  to 
ascertain  the  equitable  rights  of  the  parties."  3  A  contract  of 
insurance  was  taken  out  by  a  husband  "  for  the  sole  use  of  his 
wife,"  and  it  was  held  that  the  fund  was  payable  to  his  ad- 
ministrator in  trust  for  the  widow.4 

In  Mass.  Mutual  v.  Robinson,5  the  promise  of  the  company 
was  to  pay  the  sum  insured  to  the  "  assured,  his  executors,  ad- 
ministrators or  assigns,"  for  the  express  benefit  of  C.  M.  Ii., 
wife  of  the  assured,  and  their  children.  The  court  held  that 
the  executrix  of  the  assured  was  the  proper  party  to  bring  suit 
upon  the  policy.  In  another  case,6  however,  where  the  loss 
was  payable  to  "  the  assured,  his  executors,  administrators  or 
assigns,"  for  the  benefit  of  his  daughter,  it  was  held  that  the 

1  114  Mass.  177.  588;  Campbell  v.  Ins.   Co.,   98  Mass. 

2  Burroughs  v.   Assurance  Co.,  97    381. 

Mass.  359;  Gould  v.  Emerson,  supra.       *  Unity  Association  v.  Dugan,  su- 

3  See  Mass.  Mutual  v.  Robinson,  98  pra. 

111.  324;  Unity  Association  v.  Dugan,       5  98  111.  324. 

118  Mass.  221;    Stokellv.  Kimball,  59       6Hogle  v.   Ins.    Co.,  6   Robertson 

N.  H.  14;  Cables  v.  Prescott,  67  Maine   567;  4  Abb.  N.  S.  346. 


PAYMENT    OF    BENEFIT    FEND.  t'»75 

daughter  was  the  party  in  interest,  and,  as  such,  entitle*  1  to 
maintain  the  action  under  a  provision  of  the  code  of  New 
York,  requiring  actions  to  be  in  the  name  of  the  real  party  in 
interest.1  The  cases  just  treated  of  are  unlike  those  cases 
where  by  the  terms  of  the  contract,  it  is  expressly  promised, 
that  the  amount  shall  be  paid,  either  absolutely  or  upon  the 
happening  of  some  expressed  contingency,  to  the  beneficiaries 
themselves,  instead  of  to  the  legal  representative  of  the  member. 
Thus,  in  Martin  v.  ./Etna  Ins.  Co.,2  the  insurance  money  was  pay- 
able to  the  wife,  her  executors,  administrators  or  assigns,  if  she 
survived  her  husband,  otherwise  to  their  children.  She  did  not 
survive  him,  and  the  court  held  that  by  her  death  the  promise 
inured  to  the  children  who  alone  could  avail  themselves  of  the 
promise.3  A  policy  was  taken  out  by  a  man  "  for  the  benefit 
of  his  wife  and  children,'1  payable  to  "  the  said  assured,  their 
executors,  administrators  or  assigns  or  the  guardian  of  the 
children  under  age,"  and  it  was  held  that  the  benefit  fund  was 
the  property  of  his  widow  and  children,  and  that  the  adminis- 
trator could  not  collect  it.4  A  contract  of  insurance  contem- 
plated that  the  designation  of  a  beneficiary  should  be  made 
during  the  lifetime  of  the  member,  but,  having  made  no  such  des- 
ignation, he  bequeathed  the  fund  to  his  second  wife.  After 
his  death,  the  fund  was  claimed  by  his  widow,  by  his  children 
by  his  first  wife,  and  by  his  executor.  The  society  admitted 
its  moral  obligation  to  pay  the  fund  to  whomsoever  the  court 
might  direct  it  to  be  paid,  and  the  court  rendered  judgment 
that  the  executor  of  the  estate  of  the  member  take  it,  to  be 
distributed  as  the  probate  court  might  direct.5  The  probate 
court  distributed  it  according  to  the  will,  holding  that  the 
second  wife  was  entitled  to  it  as  against  the  testator's  child  pen, 
and  on  appeal  this  order  was  affirmed.' 

§318.  If  a  person,  not  the  proper  beneficiary  under  the 
contract  of  insurance,  has  received  money  paid  to  him  in  the 
belief  that  he  was  the  proper  beneficiary,  the  law  implies  a 

i  Bee  Price  v.  Ins.    Co.,    17   Minn.  *Cragin  v.  CraKin.  66  Me.  517. 

497;  2  Ins.  L.  J.   223;    Hillyanl   v.  'Order  of  Mutual  Companions  v. 

Ins.  Co.,  35  N.  J.  L.  415;  2  Ins.  L.  J.  Griest,  76  Cal.  494;  18  Pac  Rep.  662. 

137.  "  /"  ''  Griest's   Estate,  70  Cal.  497; 

*73  Me.  25.  18  pac.  Rep.  654. 

3  See    Knickerbocker   Ins.    Co.    v. 
Weitz,  99  Ma«s.  159. 


676  PAYMENT  OF  BENEFIT  FUND. 

promise  on  his  part  to  pay  it  over  to  the  rightful  owner.  The 
beneficiary  may  recover  from  him  the  amount  thus  wrongfullv 
received.1  Where  money  has  been  paid  without  cause  or  con- 
sideration to  one  who  was  not  entitled  in  law,  honor  or  o-ood 
conscience  to  receive  it,  the  person  paying  it  may  recover  it 
back,  provided  it  was  paid  under  a  palpable  misconception  of 
the  law  essentially  bearing  upon  and  affecting  the  contract. 
A  mutual  benefit  society  issued  a  certificate  of  membership  by 
which  it  agreed  to  pay  the  benefit  fund,  upon  the  death  of  the, 
member,  to  a  person  who  was  not  a  member  of  his  f amity. 
When  the  certificate  was  issued,  the  officers  of  the  society  be- 
lieved that  it  had  the  right  under  its  charter  to  make  such  a 
contract,  and,  after  the  death  of  the  member,  they  paid  to  the 
beneficiary  named  in  the  certificate  the  amount  of  the  benefit 
fund,  believing  that  he  was  entitled  to  it  under  the  contract. 
Under  the  charter,  the  society  had  no  power  to  make  such  a 
contract,  for  by  its  terms  the  fund  was  payable  to  the  widow 
and  children  of  the  member  taking  out  a  certificate,  and  it 
could  not  be  diverted  from  these  charter  beneficiaries  by  any 
act  of  the  society  or  the  member.  Afterward  the  widow  and 
children  of  the  deceased  member  brought  an  action  against 
the  society  to  recover  the  benefit  fund,  and  the  society  insti- 
tuted a  proceeding  against  the  person  to  whom  it  had  paid  the 
fund  to  recover  the  amount  which  it  had  paid  under  a  mistake  of 
law.  The  court  held  that  the  society  might  recover  the  amount 
which  it  had  paid  to  such  person  under  a  mistake  of  law,  less 
the  amount  of  all  assessments  which  he  had  paid  upon  the  cer- 
tificate, and  the  amount  expended  by  him  in  making  out  proofs 
of  loss,  and  further  held  that  he  was  chargeable  with  interest 
only  from  the  date  of  the  judgment.3 

Where  money  has  been  collected  upon  a  contract  which  had 
its  inception  in  a  scheme  of  mere  speculation  upon  the  life  of 
the  person  who  was  the  subject  of  insurance,  or  where  insur- 
ance is  taken  out  by  a  debtor  as  a  security  for  the  benefit  of 
his  creditor,  the  expense  of  procuring  and  continuing  the  con- 
tract being  borne  by  the  debtor,  the  authorities  justify  the 
conclusion,  in  either  case,  that  the  amount  collected,  less  the 

1  Bolton  v.  Bolton,  73  Me.  299;  Mel-       2  Gibson  v.  Society,  8  Ky.  L.  Rep. 
lows  v.  Mellows,  61  N.  H.  137;  Hoi-   520. 
land  v.  Taylor,  111  Ind.  121. 


PAYMENT    OF    BENEFIT    FUND.  l>  4  I 

debt  secured  or  the  sums  advanced  in  obtaining  and  keeping 
the  contract  in  force,  may  be  recovered  by  the  personal  repre- 
sentatives of  the  person  insured.1 

The  payment  by  the  society  of  the  whole  amount  of  the 
benefit  fund  to  certain  persons,  under  the  supposition  that 
they  were  the  heirs  at  law  of  the  beneficiary  and  entitled  to 
the  fund,  is  no  defense  to  a  claim  of  one  of  such  heirs,  to 
whom  no  payment  has  been  made,  for  his  share  thereof.* 
Where  the  charter  expressly  provides  that  the  widow  and 
children  of  a  deceased  member  shall  take  the  benefit  fund, 
they  are  entitled  to  it,  even  though  the  certificate  is  made  pay- 
able to  another  person,  and  the  charter  beneficiaries,  as  be- 
tween themselves  and  the  beneficiary  named  in  the  certificate, 
do  not  waive  their  right  to  the  fund  by  consenting  that  it  may 
be  paid  to  him,  unless  there  is  some  consideration  for  the 
waiver,  or  something  to  operate  as  an  estoppel.3 

The  innocent  payment  by  the  societ}^  of  the  benefit  fund  to 
the  person  whom  the  deceased  member  in  his  lifetime  desig- 
nated as  his  beneficiary  and  represented  to  be  his  wife  is  a  bar 
to  the  claim  of  the  widow  against  the  society.  A  society 
was  formed  for  "  benefiting  and  aiding  the  widows  and  or- 
phans of  deceased  members  "  and  its  by-laws  provided  that  a 
member  might  designate  his  beneficiary,  and  if  no  designation 
were  made,  then  the  fund  should  be  paid  to  the  widow,  child 
or  children,  mother  or  legal  heirs,  in  the  order  named.  A 
member,  before  his  death,  made  the  following  direction  :  "  The 
payment  allowed  to  me  by  the  constitution  and  by-laws  of  the 
grand  Lodge  to  be  made  to  Fanny  Supplee  (my  wife)."  Under 
this  designation,  the  fund  was,  after  the  death  of  the  member, 
paid  to  the  person  named.  This  person  never  had,  in  point  of 
fact,  been  the  wife  of  the  deceased  member,  who  had  been  dur- 
ing the  whole  period  of  his  membership,  married  to  another 
woman.  The  widow  brought-  suit,  against  the  society  for  the 
amount  of   the  benefit    fund,  and  it   was    held    that  in    ab- 

1  Amickv.  Butler,  111  Ind.  578;  12  American    Life  v.    RobertehaMT,    20 

N.  East.  Rep.  518;  9  West.  Rep.  842;  Pa.  St.  189;  Mathews  v.  Sheehan,  69 

Gilbert    v.    Moose,    104     Pa    St.    71:  N.  Y.  585;  Bruce  v.    Garden,  5  Ch. 

Cammadk  v.  Lewis,    15    Wall.    643;  App.  C.  32. 

Page   v.  Burnstine,  102  U.   S.   601;  » Mutual  Aid  Society  v.  Miller,  107 

Warnock  v.    Davis,    104  U.   S.   775;  Pa.  St,  102. 

Dutton  v.    Willner,   52  N.    Y.  312;  8  Gibson  v.  Society ,  supra. 


678  PAYMENT  OF  BENEFIT  FUND. 

sence  of  notice  to  the  proper  officer  of  the  society,  or  of  the 
subordinate  lodge  to  which  the  deceased  member  belonged, 
that  she  was  the  widow,  prior  to  the  payment  to  the  bene- 
ficiary designated,  she  was  not  entitled  to  recover.1 

Where  a  society  has  paid  over  the  benefit  fund  to  the  assignee 
of  a  certificate  on  the  faith  of  the  assignment,  and  the  original 
beneficiary  seeks  to  recover  the  benefit  fund  on  the  ground  of 
fraud  upon  the  member  by  the  assignee,  before  recovery  may 
be  had  against  the  society  it  must  be  shown  that  it  had  notice 
of  the  fraud  prior  to  the  payment  to  the  assignee.2  Where  a 
party  insures  his  life  in  favor  of  a  person  who  has  no  insur- 
able interest  in  his  life,  and  the  society  pays  the  amount  to  the 
person  stipulated  in  the  contract,  the  society  will  not  be  com- 
pelled to  pay  it  again  to  the  heirs  of  the  deceased  or  to  the 
executrix  of  the  estate,  although  notified  not  to  pay  the  bene- 
ficiary by  the  heir  and  widow  of  the  deceased.*  A  member 
died  leaving  a  will  in  which  he  left  all  his  property  to  his  wife 
and  grandchildren.  There  was  a  policy  of  insurance  upon 
his  life  in  favor  of  Catherine  Bernhard,  who  had  no  insurable 
interest  in  his  life.  Notice  was  given  by  the  widow  and  heirs 
to  the  society  that  they  claimed  the  benefit  fund,  and  that  it 
must  not  be  paid  to  the  beneficiary  named  in  the  policy.  But, 
in  disregard  of  such  notice,  the  society  paid  it  to  the  bene- 
ficiary named  in  the  certificate  of  membership.  The  court 
said :  u  The  defendant  paid  the  money  according  to  the  terms 
of  its  contract,  and  to  the  person  named  in  the  certificate  of 
membership.  The  company  did  not  agree  to  pay  the  amount 
of  the  insurance  to  the  estate  of  the  person,  on  whose  life  the 
risk  was  taken.  *  *  There  was  no  contract  with  the  widow 
and  heirs,  and  no  right  of  action  or  legal  capacity  existed  in 
them,  as  such,  to  collect  the  money  or  to  forbid  its  payment 
to  the  beneficiary."  4  In  one  case  it  was  held,  that  where  a 
member  had  changed  the  designation  of  his  beneficiary  in  a 
manner  other  than  that  provided  for  in  the  laws  of  the  so- 
ciety, and  the  society  had  consented  to  such  change,  and,  after 
the   death  of  the  member,  had  paid  the  benefit  fund  to  the 

1  Supplee  v.  Knights   of  Birming-  3  Smith  v.  Pinch,  86  Mich.  484;  45 

ham,  18  W.  N.  Cas.  280.  N.  W.  Rep.  183. 

n-  N.  W.  Mutual  v.   Roth,  87  Pa.  St.  4  Bomberger,  Ex'tr,  v.  Society.  Pa. 

409.  St.  (not  reported),  6  Atl.  Rep.  41. 


PAYMENT  OF  BENEFIT  FUND.  679 

beneficiary  in  whose   favor   the   change  had  been  made,  the 
original  beneficiary  could  not  maintain  an  action  for  the  fund.' 

Though  a  sale  of  a  certificate  to  one  who  has  no  insurable 
interest  in  the  life  of  the  assured  is  void  as  being  against  pub- 
lic policy,  that,  as  a  matter  of  contract  right,  is  a  question 
between  the  society  and  the  purchaser,  and,  where  the  society 
recognizes  its  validity  by  issuing  a  new  certificate,  in  which 
the  purchaser  is  named  as  the  beneficiary,  and  upon  the  death 
of  the  member,  pays  the  money  due  under  the  certificate  to 
such  purchaser,  no  stranger  or  volunteer  may  assail  the  valid- 
ity of  the  payment.2 

§  349.  To  whom  the  money  is  payable  when  the  contract 
is  for  the  benefit  of  a  creditor  of  the  member. — Unless  pro- 
hibited by  the  provisions  of  its  charter  and  by-laws,  a  creditor 
may  in  good  faith  take  insurance  on  the  life  of  his  debtor,  by 
procuring  membership  for  his  debtor  in  a  society  and  either 
having  himself  made  the  beneficiary  of  the  certificate,  or  hav- 
ing it  assigned  to  him.  The  amount  of  such  insurance,  how- 
ever, must  bear  some  just  proportion  to  the  debt,  or  to  the 
extent  of  the  obligation  assumed  by  the  beneficiary,  and  the 
probable  contingencies  attending  the  future  maintenance  of  the 
certificate.  The  circumstances  must  be  such  as  not  to  raise 
the  presumption  that  the  transaction  on  its  face  was  a  mere 
speculation.3  But  in  such  case,  the  amount  of  insurance  which 
may  be  contracted  for  is  not  limited  to  the  amount  of  such 
debt  or  obligation.  If  it  were,  the  creditor  would  inevitably 
be  compelled  to  lose  whatever  sums  he  might  be  required  to 
pay  in  effecting  the  insurance  and  paving  assessments.  The 
beneficiary  takes  the  chance  of  all  future  contingencies,  includ- 
ing the -continued  solvency  of  the  society;  and  that  a  sufficient 
number  of  members  will  continue  to  pay  their  assessments  to 
reimburse  him  for  his  advances  of  assessments.  Where  the 
creditor  insures  with  his  own  funds,  for  an  amount  in  fair 
proportion  to  the  amount  of  his  debt,  he  may  recover  as  his 
just  measure  of  damages  the  full  amount  of  the  contract;  and 
the  debtor's  representatives  have  no  claim  upon  him  for  any 

•Manning  v.  A.  O.  U.  W.,  86  Ky.       3  Amick  v.  Butler.  111  Ind.  578;  12 

136;  5  S.  W.  Rep.  385.  N.  East.    Rep.  518;   Fox  v.   Ins.   Co., 

'Stoelker  v.  Thornton,  88  Ala.  841;  4  Big.  L.  &  A.  his.  Rep.  468;  Mowry 

6  So.  Rep.  680.  v.  Home  Life  etc.,  'J  R.  I.  346. 


> 

680  PAYMENT  OF  BENEFIT  FUND. 

excess  over  the  debt  and  expense  of  maintaining  the  contract.1 
In  Grant  v.  Kline,2  A,  being  indebted  to  B,  his  brother-in-law, 
in  the  sum  of  $743.56,  insured  his  life  for  the  benefit  of  B,  in 
in  the  sum  of  $3,000,  B  paying  all  assessments.     Upon  A"s 
death,  the   society   paid  the  amount  of  the  insurance  to   B, 
against  whom  the  administrators  of  A  brought  a  suit  to  recover 
the   $3,000,  less  the  indebtedness  and  assessments  paid.     It 
appeared  that  A  was  considered  by  the  society  a  good  risk, 
and  that  the  transaction  between  A  and  B  was  in  perfect  good 
faith.     The  court  held  that  the  disproportion  between  the  ac- 
tual indebtedness  and  the  sum  insured  did  not,  under  the  cir- 
cumstances, create  a  presumption  that  this  was  a  wagering 
contract,  nor,  in  the  absence  of  positive  proof,  that  it  was  in- 
tended as  a  collateral  security  merely.     Where,  however,  the 
disproportion  between  the  amount  of  a  contract  taken  out  by 
a  creditor  on  the  life  of  his  debtor  and  the  debt  thereby  secured 
is  very  great,  as  where  the  insurance  is  $5,000,  and  the  debt 
$1()(>,  it  is  the  duty  of  the  court  to  declare  the  transaction   a 
waerer.  as  a  matter  of  lav/.     A  contract  of  insurance  taken  out 
by  a  creditor  on  the  life  of  his  debtor  ought  to  be  limited  to 
the  amount  of  the  debt,  with  interest,  and  the  amount  of  the 
cost  of  maintaining  the  contract,  with  interest  thereon,  during 
the  expectancy  of  the  life  insured,  according  to  the  Carlisle 
tables.3     A  creditor  who  takes  out  certificates  in  mutual  bene- 
fit societies,  amounting  to  $6,500,  on  the  life  of  his  debtor,  who 
owes  him  $1,000,  where  the  amount  to  be  realized  from  such 
certificates   depends   on  the  number  and  persistency  of  the 
members  can  not  be  said  to  be  acting  in  bad  faith,  for,  in  view 
of  the  character  of  the  certificates,  and  the  manner  in  which 
such  societies  bind  themselves  to  pay,  it  can  not  be  said  that 
the  disproportion  between  the  debt  and  the  real  amount  and 
value  of  the  contracts  of  insurance  is  so  great  as  to  warrant  a 
sentence  of  condemnation  against  the  transaction  as  being  a 
mere  speculation  on  wager  on  the  life  of  the  debtor;  and  where 
such  creditor  pays  all  mortuary  assessments,  and,  on  the  death 
of  the  debtor,  realizes  only  $2,121.82  on  the  certificate,  he  is 

»  Bliss  on  Insurance,    §§   30,   326;       3  Cooper  v.  Schaeffer,  117  Pa,  St. 
Amick  v.  Butler,  supra.  (not  reported);  11   Atl.   Rep.   548;    9 

2 115  Pa.  St.  618;  9  Atl.  Rep.  150.       Cent.  Rep.  601. 


PAYMENT    OF    BENEFIT    FUND.  GS1 

entitled  to  retain  the  remainder,  after  deducting  the  debt,  in- 
terest and  expenses.1 

§  350.  In  case  the  certificate  originates  in  a  transaction 
which  the  law  condemns,  or  where  the  debtor,  having  taken 
insurance  on  his  own  life,  at  his  own  expense,  merely  pledges 
the  certificate  as  a  security  for  an  existing  debt,  the  holder, 
whether  by  assignment  or  otherwise,  who  receives  the  entire- 
proceeds,  will  be  regarded  as  a  trustee  of  the  representatives 
of  the  insured  fur  the  amount  received,  less  the  amount  of  his 
debt,  or  the  sums  advanced  on  the  certificats,  with  interest." 
If  the  insurance  is  effected  at  the  expense  of  the  debtor,  either 
with  his  prior  consent,  or  by  his  not  objecting  to  charges 
made  against  him  for  assessments  paid  in  maintaining  the  con- 
tract, and  it  appears  to  have  been  intended  as  a  security  only, 
the  debtor  or  his  representative  is  entitled  to  the  surplus  after 
payment  of  the  debt,  and,  on  payment  of  the  debt,  the  debtor 
is  subrogated  to  the  rights  of  the  ereditor  and  is  entitled  to 
the  policy.3  A  society  issued  a  certificate  on  the  life  of  a 
member,  payable  to  his  creditor.  There  was  nothing  tending 
to  impeach  the  good  faith  of  the  transaction.  The  member 
owed  his  creditor  about  $600.  He  afterward  died  without 
having  paid  any  part  of  his  debt,  and  without  having  paid 
any  part  of  the  cost  of  procuring  and  continuing  in  force  the 
certificate  of  membership.  The  society  paid  the  creditor 
about  si ,003  in  discharge  of  its  liability  upon  its  contract. 
After  deducting  the  amount  of  the  indebtedness  and  the  sums 
advanced  for  the  insurance,  it  was  found  that  there  remained 

1  Rittl.T  v.  Smith,  70  Md.  261;  16  tinguishing  Cooper  v.  Shaeffer,  su- 

Atl.   Rep.   890.     Defendants   insured  j>nr.  Shutter  v.  Spangler,  144  Pa.  St. 

their  debtor,  a  healthy  man  of  42  323;  22  Atl.  Rep.  865. 

y<  are,  in  the  sum  of  $3,000,  to  protect  *Amick  v.  Butler,  supra. 

a  debt  of  about  $100.     Eisexpectancy  3Bliss  on   Insurance,  §326;   Levy 

of  life,  according  t<»  the  Carlisle  ta-  v.  Taylor,  60  Texas  ('..v.':   American 

hi. »,  was  26  years,  and  the  assess-  Life  v.  Robertshaw,  26  Pa.  St.   189; 

mints  and  annual   dues  during  such    Mathews   v.  Sliechan.    <>'.i    N.    Y.  585; 

time  would  hare  amounted,  together  Gilbert  v.  Moose,  104  Pa.  St.  74;  ( !am- 

witli  interest,  to  $4,336.31.     It  was  mack  v.  Lewis,  15  Wall.  643;  Equita- 

held  thai  this  was  not   a   gambling  ble  Life  v.  Hazlewood,  75  Texas  338; 

transaction,  and  that  defendants  were  128.  W.  Rep.  621;  Schonfield  v.  Tur- 

entitled  to  the  full   amount  of   the  ner,  75 Texas  824;  12  8.  W.  Rep.  626; 

policy,  though  the  assured  died  within  Tateuni  v.  Ross,  L50  .Mass.  440;  28  X. 

a  few  years.     Ulrich  v.  Reinoehl,  143  East.  Rep.  280. 
Pa.  St.  238;    22  Atl.    Rep.    862;  dis- 


682  PAYMENT  OF  BENEFIT  FUND. 

of  the  sum  received  from  the  society,  $1,259.58.  This  sum 
the  administrator  of  the  member  demanded  from  the  benefi- 
ciary of  the  certificate,  and  upon  his  refusal  to  pay,  the  ad- 
ministrator brought  suit  for  the  amount. 

It  appeared  in  evidence  that  the  creditor  had  agreed  to  pay 
the  expense  of  procuring  the  insurance  and  keeping  it  in  force, 
and  that  he  had  also  agreed  that  the  debtor  might  at  any  time 
pay  the  debt,  reimburse  the  creditor  for  such  expenses,  and 
thereby  entitle  himself  to  an  assignment  of  the  certificate. 
Upon  these  facts  the  court  said  :  "  The  amount  thus  collected 
became  the  property  of  the  beneficiary,  unless  the  parol  agree- 
ment to  turn  the  policy  over  to  the  debtor  upon  the  conditions 
already  stated  affected  the  creditor  with  an  enforceable  trust  in 
favor  of  the  personal  representative.  We  can  discover  no  prin- 
ciple upon  which  a  trust  can  be  maintained  in  the  absence  of 
any  offer  by  the  debtor  in  his  lifetime  to  pay  the  debt  and  reim- 
burse the  creditor  for  his  advances.  *  *  In  the  absence  of 
an  offer  to  comply  with  his  agreement,  we  can  discover  no 
rational  ground  upon  which  the  court  can  now  compel  the 
appellant  to  surrender  money  to  which,  according  to  every 
principle  of  law,  he  has  a  perfect  title,  and  in  which  neither 
the  debtor  nor  his  representatives  ever  had  any  interest,  legal 
or  equitable.  A  distinguishing  element  in  the  determination 
of  cases  of  this  character  is,  whether  the  one  whose  life  is 
insured  so  contracts  himself  to  pay  the  premiums  that  an  action 
could  be  maintained  against  him  by  the  creditor  for  that 
amount.  If  such  a  contract  is  shown,  then  the  policy  is  to  be 
regarded  as  a  collateral  security,  and  the  debtor  is  entitled  to 
it  upon  the  extinguishment  of  the  principal  debt;  while,  on  the 
other  hand,  if  the  creditor  pays  the  premiums,  and  the  debtor 
is  under  no  obligation  to  repay  them,  the  right  of  the  creditor 
is  absolute."  l  Where  a  creditor  charges  his  debtor  upon  his 
books  with  the  amount  paid  on  assessments  on  a  certificate,  it 
is  evident  that  he  understands  that  such  sums  are  to  be  consid- 
ered, as  between  him  and  the  debtor,  simply  as  loans;  and 
where  the  circumstances  under  which  the  creditor  was  made 
the  beneficiary  of  the  contract  show  that  it  was  done  solely  to 

1  Amick    v.    Butler,     supra;    see    Gottlieb  v.  Cranch,  4  De  G.,  M.  &  G. 
Freme  v.  Brode,  2  De  Gex  &  J.  582;    440;  Godsal  v.  Webb,  2  Keen  100. 
Knox  v.  Turner,  L.  R.,  5Ch.  App.  515; 


PAYMENT    OF    BENEFIT    FUND.  6S3 

give  to  the  creditor  a  security  for  the  debt  then  existing,  ar.d 
for  such  sums  as  he  should  have  to  pay  in  the  way  of  assess- 
ments to  keep  the  obligation  alive,  he  may  not,  as  against  the 
debtor  or  his  representative,  retain  an  excess  of  money  derived 
from  the  certificate  and  secure  the  payment  of  subsequently 
acquired  claims  against  the  debtor.1  In  a  recent  English  case 
it  was  held  that  a  creditor  who  had  insured  the  life  of  his 
debtor  could  retain  all  the  sums  he  had  received  from  the  pol- 
icies, without  accounting  for  them  to  the  representatives  of  the 
debtor,  unless  there  was  distinct  evidence  of  a  contract  to  the 
effect  that  the  creditor  should  take  out  the  insurance,  and  that 
the  debtor  should  pay  the  premiums,  in  which  case  only  could 
the  policy  be  said  to  be  held  in  trust  for  the  debtor.2 

§351.  It  was  formerly  held  in  England  that  though  the 
creditor  had  an  insurable  interest  in  the  life  of  his  debtor  at 
the  time  the  policy  was  issued,  yet,  if  his  debt  was  paid  in  the 
lifetime  of  his  debtor,  and  his  interest  had  therefore  ceased, 
he  could  not  recover,  because  in  such  case  the  contract  of  life 
insurance,  like  the  insurance  of  property,  was  one  of  indem- 
nity. But  it  is  now  the  settled  rule  in  that  country  that  aeon- 
tract  of  life  insurance  is  not  one  of  indemnity,  but  is  an  agree- 
ment  to  pay  a  certain  sum  of  money  upon  the  death  of  the 
person  insured,  in  consideration  of  certain  payments  during 
his  life,  and  hence,  if  the  contract  be  valid  at  the  time  it  was 
entered  into,  notwithstanding  the  fact  that  the  interest  of  the 
creditor  has  ceased  during  the  life  of  his  debtor,  he  may  still 
recover  on  the  policy  though  the  result  may  be  that  he  will 
be  twice  paid  for  his  debt — once  by  his  debtor  and  again  by 
recovery  on  the  policy.3     Where  the  creditor  takes  out  insur- 

1  Levy  v.  Taylor,  66  Texas  652;  see  but  there  was  no   evidence  that  the 

Johnson  w  Alexander,  125  Inu.  575;   account  had  ever  1 a  shown  to  him, 

25  N.  Kast.  Rep.  706.  or  that  he  knew    his   accounl    was 

'Bruce  v.  Garden,  L.  R.,  5  Ch.  App.  charged    with   tin-  premiums.      The 

83,    In  this  case  an  army  agent,  to  amount  received  from  the  policies  by 

whom  an  officer  was  Largely  indebted  1 1 1  *  -  creditor  was  Dearly  twice  as  much 

on  account,  effected  in  his  own  name  as  the  debt  due  him  from  his  debtor, 

policies  on  the  life  of  the  officer,  and  Freme  v.  Brode,  3DeG.  &  J.  58&; 

charged  the  account   of  tin-   officer  Brown  v.  Freeman,  4  De  G.  &  8m. 

with  premiums  paid  ami  with  inter-  444. 

est   'in   tin-   balances    including  the  aDalby  v.  India,  etc.,  Company, 28 

premiums.     The  office)    was   aware  Eng.  L.  &  Eq.  $12;  15  C.  B.  365. 
that  the  policies  had  been  effected, 


GS4  PAYMENT    OF    BENEFIT    FUND. 

ance  on  the  life  of  his  debtor  entirely  independent  of  the 
latter,  and  continues  to  pay  for  its  maintenance,  the  partial 
or  full  payment  of  the  debt  or  the  discharge  of  the  debtor  in 
bankruptcy,  will  have  no  effect  upon  the  creditor's  rights 
under  the  contract.1  In  Ferguson  v.  Massachusetts  Mutual" 
it  was  said :  "  No  statute  has  gone  so  far  as  to  declare 
that  a  life  policy,  valid  in  its  inception,  because  of  a  cred- 
itor's interest  in  the  life  of  his  debtor,  shall  be  invalid  the 
moment  the  debt  is  paid.  Besides,  from  the  nature  of  the  con- 
tract, which  is  paid  for  by  the  creditor,  he  needs  the  payment 
of  the  policy  to  do  complete  justice  to  him.  Suppose  he  has 
received,  subsequent  to  payment  of  premiums  for  years,  the 
debt  due  from  his  debtor;  he  has  thus  received  only  what  it 
may  be  assumed  he  has  advanced  or  loaned  to  his  debtor.  He 
has  received  nothing  for  the  series  of  premiums  he  has  deliv- 
ered over  from  year  to  year  to  the  insurer  to  keep  alive  the 
policy.  So,  too,  in  the  case  at  hand,  if  we  were  to  hold  that 
the  policy  was  avoided  by  payment  or  discharge  in  bank- 
ruptcy of  the  debt,  the  creditor  would  surely  be  the  loser  of 
the  premiums  paid,  after  the  payment  of  his  debt  or  the  dis- 
charge in  bankruptcy,  and  the  insurance  company  would  be 
the  gainer.  It  would  keep  in  its  coffers  moneys  which  it 
received  as  a  consideration  for  its  promise  which  it  had  not 
kept.  It  would  be  the  gainer  by  the  accidental  circumstance 
that  the  debtor  had  paid  what  only  he  justly  owed  his  creditor, 
or  what  he  had  escaped  paying  by  obtaining  a  discharge  in 
bankruptcy.  Surely  no  such  contingency  was  taken  into  mind 
or  measured  in  fixing  the  amount  of  premiums  demanded  for 
the  policy.  That  amount  was  ascertained  b}r  the  standard 
tables  relating  to  the  probabilities  of  human  life  upon  which 
life  insurance  companies  anchor  when  they  fix  and  determine 
the  schedule  of  premiums  to  be  exacted  in  the  conduct  of  their 

'  Bawls  v.  American,  etc.,  Ins.  Co.,  438;  6  Atl.  Rep.  213;  Phoenix  Mutual 

36  Barb.  357;  affirmed  27  N.  Y.  282;  v.  Bailey,  13  Wall.  616;  May  on  In- 

St.  John  v.  American,  etc.,  Ins.  Co.,  surance,  §§  115,  116,  117;  Conn.  Mu- 

3  Kern.  31,  and  note  at  pg.  41;  S.  C,  tual  v.  Schaefer,  94  U.  S.  457;  Bliss 

13  N.  Y.   31 ;  Olmstead  v.  Keys,  85  on  Life  Insurance,  §  327;  Goodwin  v. 

N.  Y.  593;  Mutual  Life  v.  Allen,  138  Mass.  Mutual,  73  N.  Y.  497;  Rittler  v. 

Mass.  24;  Clark  v.  Allen,  11  R.  I.  439;  Smith,  70  Md.  261;  16  Atl.  Rep.  890; 

Amick  v.  Butler,  111  Ind.  578;  12  N.  Ferguson  v.  Mass.  Mutual,  102  N.  Y. 

East.  Rep.  518;  Johnson  v. Van  Epps,  647;  affirming  32  Hun  306. 

110  111.  562;  Corson's  Appeal,  113Pa.  St.  2  32  Hun  306. 


PAYMENT    OF    BENEFIT   FUND.  CS5 

business.  *  *  Both  upon  principle  and  authority  we  should 
say  that  the  insurer  is  bound  to  fulfill  its  contract,  valid  in  its 
inception,  notwithstanding  the  debtor  upon  whose  life  it  runs 
may  have  paid  his  creditor  or  obtained  a  discharge  in  bank- 
ruptcy therefrom." 

§  352.  Payment  from  reserve  fund. — The  board  of  direct- 
ors or  other  officers,  charged  with  the  management  of  the  affai  rs 
of  the  society  and  the  payment  of  death  losses,  must,  of  neces- 
sity, be  permitted  to  exercise  their  discretion  to  a  great  extent 
in  the  payment  of  death  losses  out  of  any  reserve  fund  in  the 
treasury  of  the  society.  Where  the  reserve  fund  has  not  ex- 
ceeded any  limit  which  the  law  may  have  placed  upon  the 
amount  which  may  be  held  as  a  reserve,  it  must  be  left  to  the 
discretion  of  such  officers,  whether  they  will  pay  a  loss  in 
whole  or  in  part  from  the  reserve  fund,  or  levy  an  assessment 
upon  the  members  to  pay  it.  The  idea  of  a  reserve  fund  im- 
ports permanency  to  some  extent,  and,  if  losses  were  required 
to  be  paid  out  of  this  fund  as  they  occurred,  the  fund  would 
soon  be  depleted  and  destroyed;  the  very  object  for  which  it 
was  created  would  be  defeated.  A  member  can  not,  there- 
fore, insist  that  the  amount  of  money  held  in  the  reserve  fund 
be  applied  to  the  payment  of  losses  before  he  shall  be  required 
to  pay  his  assessment.  The  officers  of  the  society  may  use  a 
part  or  all  of  the  fund  to  pay  death  losses,  but  they  can  not 
be  compelled  to  do  so.  It  is  in  their  discretion  to  hold  the 
reserve  fund  and  lay  an  assessment  to  pay  the  loss.  A  statute 
providing  that  a  mutual,  benefit  society  "  shall  have  the  right 
to  hold,  at  any  one  time,  as  a  death  fund,  belonging  to  the 
beneficiaries  of  anticipated  deceased  members,  an  amount  not 
exceeding  one  assessment,"  does  not  require  that  losses  as  they 
occur  shall  be  paid  from  this  fund,  but  the  officers,  in  their 
discretion,  may  lay  an  assessment  to  pay  such  losses.1 

.^'  -553.  Contract  to  surrender  certificate  when  fund  is 
paid  by  the  society. — Though  a  contract  provides  for  the 
payment  of  the  fund  upon  the  surrender  by  the  beneficiary  of 
the  certificate,  still  if  the  society  positivelv  refuses  to  pay 
because  the  claim  is  unjust  and  invalid,  the  beneficiary  niav 
sue  on  it  and  recover  without   proving   that   he   offered    to 

■Cressman  v.  Mass.  Mutual,  143  Mass.  433:  9N.  East.  Rep.  753. 


v 


686  PAYMENT    OF    BENEFIT   FUND. 

surrender  it  on  payment  of  the  fund.1  A  certificate  was 
delivered  to  the  designated  beneficiary.  After  the  death  of 
the  member,  it  was  decided  that  the  fund  could  not  be  paid  to 
the  person  named,  because  he  was  not  within  the  classes  of 
beneficiaries  set  forth  in  the  charter.  The  society,  to  prevent 
the  loss  or  waste  of  any  part  of  its  funds  in  litigation  in  resist- 
ing illegal  claims,  provided  in  the  contract  that  it  should  not 
be  required  to  pay  any  claim  for  a  death  loss  until  the  cer- 
tificate was  surrendered.  The  designated  beneficiary  refused 
to  surrender  it  to  the  person  entitled  to  the  fund  under  the 
by-laws.  The  court  decreed  that  the  certificate  was  void, 
directed  that  it  be  surrendered  for  cancellation,  and  that  the 
fund  be  paid  to  the  proper  person.2 

§  354.  Payment  of  the  fund  into  court,  interpleader  by 
the  society. — It  has  been  held  in  some  cases  that  when  the 
society  brings  the  benefit  fund  into  court,  and  asks  that  the 
court  determine  the  rights  of  certain  claimants  of  the  fund  and 
discharge  it,  it  does  not  thereby  confess  or  deny  the  right  of 
any  one  of  the  claimants;  that  the  payment  of  the  money  into 
court  for  the  benefit  of  the  person  who  may  be  declared  to  be 
entitled  to  it,  in  no  way  improves  or  prejudices  the  legal 
position  of  either  party  against  the  other,  but  that  it  is  the 
duty  of  the  court  to  see  that  the  money  is  paid  out  as  directed 
and  required  by  the  contract  of  insurance,  and  that  the  party 
who  succeeds  must  make  out  a  case  which  would  have  entitled 
him  to  recover  against  the  society  in  a  suit  on  the  contract.3 

^chwarzbach  v.  Union,  25  W.  Lodge,  38  Mo.  App.  543;  Supreme 
Va.  622;  Kern  v.  Zeigler,  13  W.  Va.  Council  v.  Bennett,  47  N.  J.  Eq.  39; 
707;  Smith  v.  Lewis,  24  Conn.  621;  19  Atl.  Rep.  785;  Ballou  v.  Gile,  50 
Borden  v.  Borden,  5  Mass.  67;  Smith  Wis.  614;  Wendt  v.  Iowa  Legion  of 
v.  Smith.  25  Wend.  405;  Williams  v.  Honor,  72  Iowa,  682;  34  N.  W.  Rep. 
Bank,  2  Peters  96;  as  to  surrender  of  470.  In  the  Wendt  case  it  was  con- 
certificate,  see  Mulroy  v.  Supreme  tended  that  the  company  only  could 
Lodge,  2->  Mo.  App.  463;  Bock  v.  A.  object  to  the  insufficiency  of  the 
O.  U.  W..  75  Iowa  462.  A  failure  to  change  of  the  beneficiary,  and  as  it 
surrender  the  certificate  according  to  had  paid  the  money  into  court,  it 
the  terms  of  the  contract  may  affect  had  recognized  the  change  as  valid, 
the  question  of  interest;  see  §  360.         but    the  court    expressly    dissented 

2  Britton  v.  Supreme  Council,  46  from  that  view.  In  Ballou  v  Gile, 
N.  J.  Eq.  102;  18  Atl.  Rep.  675;  Cro-  supra,  an  action  was  originally 
katt  v.  Ford,  25  L.  J.  Ch.  552.  brought   by  the  plaintiff   against    a 

3  See  §  222;  Grand  Lodge  v.  Sater,  mutual  benefit  society  to  recover  the 
44  Mo.  App.  445;  Keener  v.  Grand   sum  of  $3,000  which  she  claimed  was 


PAYMENT  OF  BENEFIT  FUND. 


cs; 


In  some  cases  the  rights  of  the  parties  were  adjudicated  upon 
without  reference  to  the  fact  that  the  society  had  paid  out  the 
money.1  In  other  cases  the  fact  that  the  money  had  been  paid 
into  court  by  the  society,  without  objection  to  the  manner  in 
which  one  of  the  parties  had  been  designated  as  a  beneficiary, 
or  without  objecting  to  him  as  an  improper  beneficiary  under 
the  contract,  has  been  commented  on  as  tending  to  give  him  a 
better  standing  in  court.2 

In  one  case  it  was  said:  "  The  society  has  paid  the  money 
into  court,  and  has  been  released  from  all  obligation  respect- 
ing it.  This  payment,  however,  is  an  admission  on  its  part 
that  the  benefit  certificate  was  rightly  issued,  and  hence  all 
contention  as  to  whether  its  rules  and  regulations  respecting 


due  to  her  upon  a  benefit  certificate 
held  by  her  husband  at  the  time  of 
his  death.  The  society  did  not  dis- 
pute the  indebtedness,  but  alleged 
that  several  other  persons  made 
claim  to  the  benefit  fund,  naming 
such  persons,  asked  to  be  permitted 
to  pay  the  money  into  court,  and  that 
the  contestants  for  the  fund  be  made 
defendants  in  its  place;  and  thereupon 
it  was  permitted  to,  and  did  pay  the 
money  into  court.  The  contestants 
were  made  defendants  in  its  place, 
and  the  action  was  dismissed  as  to  the 
society.  In  discussing  the  effect  of 
this  payment  of  the  fund  into  court, 
tlic  supreme  court  of  Wisconsin 
said  :  "The  fact  that  the  association 
lias  paid  the  money  into  court,  in- 
stead of  paying  it  directly  to  the 
widow,  to  avoid  litigation  with  the 
other  claimants,  can  make  no  differ- 
ence as  to  the  rights  of  the  persons 
claiming  the  same.  It'  the  appellant 
could  not  have  recovered  this  money 
in  a  direel  action  against  the  associ- 
ation, he  can  not  recover  it  in  this 
action.  The  association  not  having, 
for  prudential  reasons,  paid  the 
money  to  the  party  entitled  thereto. 
the  court  must  see  that  it  is  paid  out 
as  directed  and  required  bj-  the  rules 


and  regulations  of  the  society.  *  * 
*  *  It  is  quite  immaterial  whether 
the  local  council  or  the  supreme 
council  have  the  right,  under  the 
rules  and  regulations  of  the  order,  to 
direct  to  whom  the  money  shall  be 
paid,  in  case  the  brother  lias  failed 
to  designate  the  person  in  the  man- 
ner prescribed  by  such  rules.  The 
money  having  been  paid  into  court, 
the  court  must  now  determine  who 
is  the  proper  person  to  receive  the 
money,  irrespective  of  the  action  of 
either  council."  In  National  Life  v. 
Pingrey,  141  Mass.  411,  it  is  said  that 
one  who  interpleads  assumes  that  he 
is  merely  a  stakeholder. 

1  Tollman's  Appeal,  92  Pa.  St.  50; 
Stephenson  v.  Stephenson,  64  Iowa 
534;  Knights  of  Honor  v.  Nairn.  GO 
Mich.  44:  26  N.  W.  Rep.  826;  Day  v. 
Case,  43  Hun  179;  see  Mellows  v. 
Mellows,  61  N.  H.  137:  Holland  v. 
Taylor,  111  Ind.  121;  12  N.  East. 
Rep.  116:  Hotel  Men's  Mutual  v. 
Brown,  33  Fed.  Rep.  11;  Ireland  v. 
Ireland.  42  Hun  212. 

3  Johnson  v.  Knights,  68  Ark.  255; 
13  S.  W.  Rep.  794;  Gladding  v.  Glad- 
ding, 8  N.  Y.  Supp.  880;  see  Lamont 
v.  Grand  Lodge,  33  Fed.  Rep.  177. 


? 


688  PAYMENT  OF  BENEFIT  FUND. 

these  matters  had  been  complied  with  is  out  of  the  case,  and 
is  entirely  disposed  of."  ' 

A  bill  of  interpleader  by  a  society  to  determine  conflicting 
claims  to  the  proceeds  of  a  certificate,  the  money  having  been 
paid  into  court,  is  not  a  proceeding  in  rem;  and  a  judgment 
by  default  against  a  claimant  who  is  served  outside  of  the 
state  and  who  does  not  appear  in  the  suit,  is  a  nullity.2 

§  355.  Payment  of  a  less  amount  than  is  due,  receipt  in 
full. — Where  payment  of  a  smaller  amount  than  is  actually 
due  to  the  beneficiary  is  accepted,  a  receipt  in  full  given,  and 
the  certificate  surrendered  on  the  faith  of  the  statement  made 
to  the  beneficiary  by  the  officers  of  the  society  that  such  sum 
was  all  he  was  entitled  to  on  the  certificate,  the  remainder  due 
on  the  certificate  may  be  recovered,  if  such  statement  is  incor- 
rect in  law,  and  false  in  fact.3  The  son  of  a  member  of  a 
mutual  benefit  society  was  in  fact  entitled  to  the  whole  fund 
payable  on  his  father's  death,  but  his  guardian  on  making  claim 
therefor  was  informed  by  the  president  that  only  a  part  of 
the  fund  was  due  to  the  son,  and  that  the  balance  belonged  to 
another  person  who  had  been  named  as  a  beneficiary.  The 
guardian,  in  good  faith,  without  disputing  this,  accepted  a 
smaller  sum  and  signed  a  receipt  in  full.  The  remainder  of 
the  money  was  then  paid  to  the  person  supposed  to  be  entitled 
thereto.  It  was  held  that  a  suit  might  still  be  maintained  by 
the  son  for  the  balance  of  the  fund,  and  that  the  guardian's 
passive  assent  to  the  payment  of  the  balance  to  the  wrong  per- 
son did  not  amount  to  an  estoppel.  In  such  a  case,  the  receipt 
of  a  part  of  the  sum  due  is  not  a  consideration  sufficient  to  sup- 
port a  release  executed  by  the  guardian  to  the  societ}^  in  full 
satisfaction  of  the  entire  sum  due.4  A  member  of  a  mutual 
benefit  society  died  holding  a  certificate  which  provided  for 
the  payment  of  $1,000  to  his  widow  on  certain  conditions.  It 
was  claimed  that  one  of  these  conditions  was  broken,  in  that 
the  member  had  not  paid  his  clues  and  assessments  promptly, 
and  that  the  society  was  not  liable  to  the  widow  on  the  certifi- 

1  Tits-worth  v.  Titsworth,  40  Kan.  -  Gary  v.  Association  (Iowa),  50  N. 

571;  20   Pac.  Rep.    213;  citing  Man-  W.  Rep.  27. 

ning  v.  A.  O.    U.  W.,  86  Ky.  136;  5  "York  Association  v.  Myers,  11  W. 

S.  W.  Rep.  385;  andSplawnv.  Chew,  N.  Cas.  541. 

60  Texas  532;  see  Knights  of  Honor  4  Tyler  v.    Association,   145    Mass. 

v.  Watson,  64  N.  H.  517;  15  Atl.  Rep.  134;  13  N.  East.  Rep.  360. 
125;  6  N.  Eng.  Rep.  880;  see  §  222. 


PAYMENT    OF    BENEFIT    FUND.  6S9 

cate.  But  the  by-laws  of  the  society  provided  as  follows : 
"  The  heirs  of  a  deceased  member,  who  through  tardy  payment 
has  come  out  of  benefit,  can  claim  no  more  than  $50  at  the  death 
of  a  male  member."  The  society  refused  to  pay  her  anything 
on  the  certificate,  but  paid  her  $50,  and  took  her  receipt  in 
full  of  all  claim  upon  the  society.  Afterward  she  brought  an 
action  upon  the  certificate,  and  the  society  set  up  the  payment 
of  the  $50  in  bar  of  the  action.  The  court  held  that  the  re- 
ceipt of  this  money  did  not  prevent  her  from  maintaining  an 
action  for  the  recovery  of  the  sum  actually  due.' 

§  356.  Settlement  procured  by  the  fraud  of  the  society. 
— Where  a  life  insurance  company  by  its  authorized  agent 
falsely  and  fraudulently  represents  to  the  assurcd's  executor, 
whose  mental  faculties  are  at  the  time  impaired  by  age,  finan- 
cial disasters  and  domestic  affliction,  that  sufficient  evidence 
has  been  discovered  to  avoid  the  policy,  and  that  such  com- 
pany will  contest  and  defeat  its  collection,  and  thereby  procures 
a  settlement  of  the  claim  and  a  surrender  of  the  policy  by  pay- 
ment of  an  amount  grossly  unjust  to  the  estate  of  the  assured, 
such  settlement  may  be  set  aside,  and  the  remainder  due  on 
the  policy  recovered.  The  fact  that  the  insurance  company 
paid  such  money  to  the  executor  a  few  days  before  he  could 
have  legally  demanded  and  enforced  its  payment  is  immaterial, 
where  it  does  not  appear  that  such  payment  constituted  any 
part  of  the  consideration  for  the  settlement.3  When  the  will 
of  the  beneficiary  has  been  coerced  by  threats,  or  constrained 
;hk1  overpowered  by  any  form  of  intimidation  which  is  at- 
tempted to  be  practiced  upon  him,  the  court  will  relieve  him 
from  the  consequence  of  his  act  in  making  a  settlement  with 
the  society  at  a  smaller  sum  than  is  due  and  giving  a  receipt 
in  full  of  all  claims.1  The  <mestion  whether  a  settlement  and 
receipt  in  full  were  obtained  by  duress  and  fraud  is  one  of 
fact  to  be  submitted   to  the  jury.'     A  contract  of  settlement 

1  Kapka  v.  Order  Germania,  7  N.  *  Dunham  v.  Griswold,  100  N.  Y. 
V.   Weekly  Dig.   197;   see  Ryan  v.    824;  Fisher  v.  Bishop,   108   X.  Y.25; 

Ward,  48  N.  V.  207.  36  Hun  112;  13  N.  Y.  St.  Rep.  466: 

'McLean  v.  Ins.  Co.,  100  Ind.  127;   Sheanori  v.  Ins.  Co.,  77  Wis.  618;  03 

50  Am.  Rep.  799;  see  Home  Ins.  Co.    N.  W.  Rep.  878. 

v.  Boward,  111  lad.  544. 

»Stowell   v.  Association,  23  N.  Y. 

St.  Rep.  706. 
44 


690  PAYMENT   OF   BENEFIT    FUND. 

and  cancellation  fraudulently  procured  by  the  society  is  void- 
able, but  not  void;  and,  hence,  in  an  action  upon  a  certificate 
as  a  valid  subsisting  obligation,  such  a  contract  constitutes  an 
insuperable  barrier  against  a  recovery  so  long  as  it  is  not 
rescinded  or  avoided  by  an  offer  to  return  the  consideration 
paid  for  it.1 

But  an  action  against  a  society  for  damages  sustained 
through  its  fraudulent  representations,  inducing  a  settlement 
of  a  loss,  is  in  affirmance  of  the  settlement.  A  person  may  re- 
tain the  property  received  through  a  fraudulent  transaction, 
and  sue  for  the  damages  sustained  by  the  fraud  perpetrated 
upon  him.  He  may  affirm  the  contract  and  recover  the  dam- 
ages sustained  by  him.2  Such  an  action,  being  in  affirmance  of 
the  settlement,  does  not  violate  a  provision  therein  that  plaintiff 
will  warrant  and  defend  the  payment  made  thereunder  against 
any  and  all  claimants;  and  such  an  action  is  not  within  a  by- 
law of  the  society  providing  that  no  action  shall  be  sustained 
in  any  court  of  law  or  equity  on  any  death  claim  unless  the 
same  shall  be  commenced  within  twelve  months  after  the 
death  of  the  member.3 

A  beneficiary,  who  has  settled  his  claim  against  the  society 

1  McMichael  v.  Kilmer,  76  N.  Y.  he  may  rescind  by  restoring,  or  offer- 
36;  Gould  v.  Bank,  86  N.  Y.  75;  Bis-  ing  to  restore,  what  he  has  received 
bee  v.  Ham,  47  Maine,  543;  Potter  v.  as  a  consideration  for  the  compro- 
Ins.  Co.,  63  Me.  440;  Worley  v.  Moore,  mise;  and  he  may  then  maintain  an 
97  Ind.  15;  Brown  v.  Ins.  Co.,  117  action  at  law,  treating  the  compro- 
Mass.  479;  Home  Ins.  Co.  v.  How-  mise  as  rescinded.  Or,  instead  of 
ard,  111  Ind.  544;  13  N.  East.  Rep.  rescinding  and  suing  at  law,  he  may 
103;  Norwich  Union  v.  Girton,  124  keep  what  he  has  received,  and  sue 
Ind.  217;  24  N.  East.  Rep.  984.  Where  in  equity  to  rescind  the  fraudulent 
a  creditor  is  induced  by  the  fraud  of  compromise,  and  to  obtain  in  the 
the  debtor  to  settle  an  undisputed  same  action  equitable  relief,  offering 
claim  for  a  smaller  sum  than  is  due,  he  in  his  bill  to  restore  what  he  has  re- 
may  bring  suit  for  the  remainder  of  ceived,  if  it  shall  be  adjudged  that 
the  claim  without  rescinding  the  com-  he  is  not  entitled  to  retain  it.  Home 
position  agreement.  Hefter  v.  Cohn,  Ins.  Co.  v.  Howard,  supra;  Gould  v. 
73  111.  296;  Pierce  v.  Wood,  3  Foster   Bank,  supra. 

(23  N.  H.)  519;  Reyndes  v.  French,  '2  Wabash  Union  v.  James  (Ind. 
8Vt.  85;  Bankv.  Hoeber,  8  Mo.  App.  App.),  35  N.  East.  Rep.  919;  Eng- 
171;  Seving  v.  Gale,  28  Ind.  486.  lish  v.  Arbuckle,  125  Ind.  77;  25  N. 
But  where  a  person  has  been  induced   East.  Rep.  142. 

by  fraud  to  compromise  a  disputed  3  Wabash  Union  v.  James,  supra. 
claim  which  he  holds  against  another, 


PAYMENT  OF  BENEFIT  FUND.  601 

disadvantageous^,  under  pressure   not  amounting  to  fraud, 
can  not  maintain  an  action  for  further  recovery.1 

§  357.  A  member  may  not  enjoin  payment. — A  member 
of  the  society,  as  such,  has  no  interest  in  the  benefit  fund,  and 
can  not  maintain  a  suit  to  enjoin  the  society  from  paying  it  to 
a  person  who  claims  to  be  the  beneficiary  under  one  of  its  cer- 
tificates.2 

§  358.  Payment  procured  by  fraud.— Where  a  beneficiary 
procures  the  payment  of  the  benefit  fund  to  be  made  to  him, 
by  false  and  fraudulent  proof  of  the  death  of  the  member,  the 
member  being  in  fact  still  alive,  the  society  may  maintain  an. 
action  against  the  beneficiary  to  obtain  the  money  so  fraudu- 
lently obtained  by  him.3  And  such  action  may  be  maintained 
notwithstanding  the  illegality  of  the  contract  of  insurance,  by 
reason  of  the  fact  that  the  society  was  not  authorized  to  do 
business  in  the  state  where  it  was  executed.4  On  presentation 
of  proofs  of  the  death  of  the  insured,  a  society  paid  the  benefit 
fund;  subsequently  it  was  ascertained  that  he  was  not  dead, 
and  the  society  brought  suit  to  recover  the  money  as  having 
been  obtained  by  misrepresentation.  It  appeared  that  the  bene- 
ficiary acted  in  good  faith,  and  the  society  was  permitted  to 
recover  only  on  condition  that  it  redelivered  to  him  the  policy 
as  a  valid  and  subsisting  contract.5  Where  the  society  might 
have  ascertained  certain  facts  upon  due  inquiry,  but  paid  the 
claim  without  having  examined  into  them,  it  can  not  recover 
the  payment,  unless  there  was  a  fraudulent  concealment  of  the 
facts.' 

§  359.  Right  to  double  payment. — The  Iowa  Grand  Lodge, 
A.  O.  U.  W.,  separated  into  two  bodies,  each  claiming  to  be 
legitimate,  and  claiming  the  members  of  the  former  grand 
lodge  as  its  own.  Amemberwho  was  then  past  the  age  of  eligi- 
bility to  original  membership,  united  with  the  rival  lodge,  but 

'Maguirev.  Ins.  Co.,23Mioh.  105;  4N.  W.  Mutual  v.  Elliott,   supra. 

iEtnalns.  Co.  v.  Brown,  83  Ohio  St.  8  North  Brit.  Ins.  Co.  v.  Stewart,  9 

283,  C.  S.  Cases,  3d  series.  534. 

*  Elsey  v.    Association,    142  Mass.  6 National  Life  v.  Mincli.  58  N.  Y. 

224;  7  N.  East.  Rep.  844;  seeSands  v.  144;  Smith  v.   Ins.  Co.,  62  N.  Y.  85; 

Hill,  42  Barb.  65.  American  Ins.  Co.  v.  Crawford,  89 

8N.    W.  Mutual    v.  Elliott,  5  Fed.  111.  02. 
Rep.  225;  Hartford  Ins.  Co.  v.  Math- 
ews,  102  Mass.    221;    McConnell  v. 
Ins.  Co.,  18  111.  228. 


692  PAYMENT  OF  BENEFIT  FUND. 

received  no  new  certificate.  He  retained  membership  in,  and 
continued  to  pay  dues  and  assessments  to  both  lodges.  After 
his  death  the  certificate  was  paid  by  one  lodge  and  surrendered 
to  it  properly  receipted.  A  claim  was  made  against  the  other 
lodge,  and  an  assessment  to  pay  it  was  levied  and  collected, 
but  payment  was  refused,  because  of  the  claimant's  inability 
to  surrender  the  certificate.  In  a  suit  to  collect  the  proceeds 
of  this  assessment,  it  was  held  that  there  was  but  one  contract 
of  insurance,  each  of  the  state  organizations  recognizing  this 
contract  as  valid,  because  each  had  at  all  times  claimed  the  old 
members  as  lawfully  owing  allegiance  to  but  one  governing 
body,  and  that  the  levying  of  the  assessment  did  not  create  an 
estoppel.' 

§  360.  Interest  on  the  amount  of  the  benefit  fund. — It 
was  held  in  an  English  case  in  1823  that,  as  interest  was 
allowed  by  law  only  upon  mercantile  securities,  or  in  those 
cases  where  there  had  been  an  express  promise  to  pay  interest, 
or  where  such  promise  was  to  be  implied  from  the  usage  of 
trade  or  other  circumstance,  the  assured  was  not  entitled  to 
recover  interest  on  the  principal  sum  insured,  from  the  expira- 
tion of  the  specified  time  after  due  proof  of  death.2  After- 
ward it  was  held  that  the  assured  could  not  recover  interest, 
unless  he  had  made  a  distinct  application  to  the  insurer  to  pay 
the  amount  of  the  loss,  and  had  notified  the  insurer  of  the 
ground  of  his  application.3  In  this  country  it  has  been  held 
that,  in  fire  insurance,  where  there  is  no  doubt  as  to  the 
amount  of  the  loss,  interest  will  be  allowed  from  the  time  spec- 
ified in  the  policy,  but  where  the  preliminary  proofs  are  in- 
definite in  this  particular,  no  interest  will  be  allowed;4  and  it 
has  been  further  held  that  whatever  is  due,  becomes  due  and 
payable  within  the  time  fixed  by  a  policy,  after  tender  of 
proofs,  and  will  bear  interest  from  that  date;  that  though  the , 
amount  may  be  controverted  by  proof,  and  the  true  amount 
may  be  variable,  yet  that  does  not  change  the  principle.5    A 

1  Bock  v.  A.  O.  U.  W.,  75  Iowa  462;  *  McLaughlin  v.  Ins.  Co. ,  23  Wend. 

39  N.  W.  Rep.  709;  see  §§  256,  353.  525;  Bridge  v.  Ins.   Co.,  1   Hall  (N. 

5  Higgins  v.  Sargent,   2  Barn.   &  Y.),  247,  261,  note. 

Cress.  348.  6  Peoria  Ins.  Co.  v.  Lewis,   18  111. 

3  Bain  v.  Case,  3  Car.  &  Payne  496  553. 
(1829);  S.    C,  1  Moody  &    Malkin's 
Repts.  262. 


PAYMENT  OF  BENEFIT  FUND.  693 

policy  of  life  insurance  is  a  contract  to  pay  a  certain  sum  of 
money  at  a  certain  time  after  the  death  of  the  insured,  and  it 
is  proper  to  allow  interest  on  this  sum  from  the  time  it  be- 
comes payable.'  This  rule  obtains  in  mutual  benefit  insurance 
where  the  amount  to  be  paid  is  to  be  determined  by  a  levy  of 
an  assessment.  Interest  should  be  added  to  the  amount  which 
would  have  been  realized  by  an  assessment,  from  the  time  it 
should  have  been  levied  in  the  regular  course  of  the  business 
of  the  society.2  But  where,  according  to  the  terms  of  the 
contract,  the  society  is  not  required  to  pay  until  the  certificate] 
is  surrendered,  the  person  entitled  to  the  fund  must  tender  it 
before  a  claim  for  interest  accrues.3 

It  has  been  held  that  in  an  action  to  compel  the  society  to 
levy  an  assessment  upon  the  surviving  members  to  pay  a  death 
loss,  the  plaintiff  is  not  entitled  to  interest.4 

§  361.  Proceedings  to  obtain  payment  of  judgment. — 
The  widow  of  a  deceased  member  of  a  mutual  benefit  society 
having  obtained  judgment  against  the  society  for  the  amount 
of  the  benefit  due  her  as  such  widow,  and  execution  on  the  iudsr- 
ment  having  been  returned  unsatisfied,  applied  to  the  court  in 
which  the  judgment  was  rendered  for  a  mandamus  to  compel 
the  society  to  make  an  assessment  upon  the  members  of  the 
society  sufficient  to  pay  the  judgment,  The  supreme  court  of 
Michigan,  in  deciding  that  such  an  action  could  not  be  main- 
tained, said:  "  The  respondent  is  a  corporation  existing  under 
the  laws  of  this  state.  The  relator  has  obtained  a  judgment 
against  the  corporation,  and  execution  has  been  returned  un- 
satisfied. Xo  further  proceedings  at  law  can  be  resort  ed  to  to 
enforce  collection.     Whether  the  corporation  is  solvent  or  in- 

1  Knickerbocker  Ins.  Co.  v.  Gould,  v.  Covenant  Mutual,  76  Iowa  56;  40 

so  Til.  ::ss:  Mags.   M.  L.  Ins.  Co.  v.  X.  West.  Rep.  87;  Stowel]  v.  Ameri- 

Bobinson,  98  HI.  324;  Supreme  Lodge  can  Association,  23  X.   Y.  St.  Rep. 

v.  Zuhlke,  129  III.  298;   21    N.    Bast.  706;    see   authorities    in    preceding 

Rep.   789;  Brown  v.  Assurance  Co.,  note. 

r>  Mo.    221;    Supreme    Council    v.  8Britton  v.  Supreme   Council,  46 

Franks  187  111.  118;  27  X.  East.  Rep.  X.  J.  Eq.  102;  18  Atl.  Rep.  675;    see 

86;  Heialer  v.  Stose,   L31    III.  893;  23  §  353. 

N.  East.  Rep.  847;  Hanover  [ns.  Co,  *Courtney  v.    Association   (Iowa), 

v.   Lewis,  28  Fla,  209;   10  So.    Rep.  53   X.    W.  Rep.  238;  bul   Bee  N.  W. 

297.  Association  v.  Schauss,  148  111.  304; 

5  Perine  v.  Grand  Lodge,  51  Minn.  35  X.  East.  Rep.  717. 
224;  53  XT.  East.  Rep.  867j  Newman 


691  PAYMENT    OF    BENEFIT    FUND. 

solvent  can  not  be  made  to  appear  until  an  investigation  has 
been  had.  Whether  the  sequestration  provided  for  under  the 
statute  (How.  St.  §  8153)  is  proper  or  not,  or  whether  resort 
should  be  had  to  assessments  to  satisfy  the  relator's  claim,  are 
questions  that  can  not  be  properly  considered  upon  this  mo- 
tion. They  necessarily  involve  a  construction  of  the  statute 
under  which  respondent  company  is  organized,  and  a  con- 
struction of  the  articles  of  association,  and  the  by-laws  made 
thereunder  as  well;  and  that  construction  will,  to  a  greater  or 
less  extent,  be  modified  by  circumstances  surrounding  each 
particular  case  wherein  it  is  sought  to  be  applied.  It  is  mani- 
fest that  mandamus  is  entirely  inadequate  in  this  class  of 
cases,  and  that  equity  alone  can  furnish  the  proper  remedy. 
Sequestration  can  be  had  in  no  other  court.  The  examination 
of  the  affairs  of  a  corporation,  and  the  legal  proceeding  by 
which  its  assets  are  taken  and  applied  to  the  payment  of  its 
debts,  are  particularly  subjects  of  equitable  cognizance,  and 
what  acts  should  be  done  or  performed  by  its  officers  in  the 
payments  of  its  debts  can  only  be  ascertained  and  enforced 
Avhen  the  true  situation  of  the  corporation  is  fully  known,  and 
its  ability  to  pay  and  means  of  payment  are  judicially  estab- 
lished. A  court  of  equity  is  the  proper  forum  for  such  pro- 
ceeding's, and  the  writ  in  this  case  must  therefore  be  denied."  l 
§  362.  Restricting  the  operation  of  the  judgment  against 
a  society. — After  a  general  verdict  has  been  rendered  against 
a  mutual  benefit  society  for  a  breach  of  its  covenant  to  make, 
levy  and  collect  assessments  on  its  members  to  pay  the  plaint- 
iff's claim,  it  is  error,  in  the  judgment  or  after  judgment  ren- 
dered thereon,  by  order,  to  restrict  the  operation  of  the  ver- 
dict, judgment  and  execution  to  assessments  collected  and  to 
be  collected  by  the  society  from  its  members.  The  verdict  in 
such  a  case  is  the  amount  of  damages  for  the  default  of  the 

1  Miner  v.  Association,  65  Mich,  the  person  obtaining  such  judgment 
84;  31  N.  W.  Rep.  763;  How.  St.  or  decree,  or  his  representatives,  the 
§  8153.  "  Whenever  a  judgment  at  circuit  court  within  the  proper 
law  or  a  decree  in  chancery  shall  be  county  may  sequestrate  the  stock, 
obtained  against  any  corporation  property,  things  in  action,  and  effects 
under  the  laws  of  this  state,  and  of  such  corporation,  and  may  ap- 
an  execution  issued  thereon  shall  point  a  receiver  of  the  same."  See 
have  been  returned  unsatisfied  in  People  v.  Masonic  Association,  126 
part  or  in  whole,  upon  the  petition  of   N.  Y.  615. 


PAYMENT  OF  BENEFIT  FUND.  695 

society,  and  judgment  should  be  for  that  amount  absolutely. 
Having  a  judgment  in  his  favor  for  the  amount  of  his  damages, 
the  plaintiff  has  the  undoubted  right  to  collect  it  by  any 
means  the  law  affords  him.1  The  by-laws  of  a  mutual  benefit 
society  provided  that  losses  should  be  paid  by  bi-monthly 
assessments,  that  each  loss  should  be  payable  pro  rata  out  of 
the  next  assessment  after  proof  of  death,  or  if  the  claim  were 
contested,  and  judgment  recovered  against  the  society  thereon, 
the  judgment  should  be  paid  pro  rata  out  of  the  assessment 
next  after  its  rendition.  A  claim  having  been  contested  and 
reduced  to  judgment  in  another  state,  suit  was  brought  on  the 
judgment.  It  was  held  that  the  facts  that  the  pro  rata  share 
of  the  assessment  next  after  the  judgment  would  amount  to 
less  than  the  judgment,  and  that  the  society  had  disputed  the 
claim,  believing  it  to  be  unjust,  constituted  no  reason  for  not 
paying  the  judgment  in  full,  since  the  extent  of  the  liability 
of  the  society  was  determined  by  the  judgment.3 

1  Seitzinger  v.  New  Era  Life  Asso-       J  People's  Mutual  v.  Werner,  6  Ind. 
ciation,  111  Pa.  St.  557;  McKnight  v.    App.  614;  34  N.  East.  Rep.  105. 
New  Era  Life  Association,  15  Weekly 
Notes  of  Cases,  400. 


PAET  III. 


THE  LAW  OF  ACCIDENT  INSURANCE. 


THE   LAW  OF  ACCIDENT  INSURANCE. 


CHAPTER  XXVII. 

ACCIDENT    INSURANCE. 

§  363.    Generally. 

364.  What  is  an  accident  ? 

365.  Negligence  on  the  part  of  the  insured  contributing  to  the  injury. 

366.  Due  diligence  for  personal  safety  and  protection. 
367-372.     Voluntary  exposure  to  unnecessary  danger;  obvious  risk. 
373-378.     External,  violent  and  accidental  means. 

379.  External  and  visible  sign. 

380,  381.     The  nature,  cause  or  manner  of  death  unknown,  or  incapa- 

ble of  direct  and  positive  proof:  burden  of  proof. 

§  363.  Generally. — While  accident  insurance  is  of  modern 
origin,  it  has  become  an  established  branch  of  business,  both 
in  this  country  and  in  England.  The  first  company  organized 
in  England  was  formed  in  London  in  18-18,  and  the  first  Amer- 
ican company  was  formed  about  18G3.  The  history  of  acci- 
dent insurance  companies  in  this  country  records  a  few  suc- 
cesses and  many  failures,  and  at  the  present  time  the  business 
is  done  by  a  very  few  regular  companies  and  a  large  number 
of  mutual  benefit  societies.  In  life  insurance  there  are  stand- 
ard life  tables  which  give,  as  the  result  of  many  years  of  ob- 
servation and  compilation,  the  death  rate,  and  from  which  the 
expectation  of  a  life  may  be  computed;  but  as  yet  no  accident 
tallies  have  been  published,  and  there  are  no  statistics  known 
to  the  public  from  which  the  probability  of  accidental  injury 
or  denth  in  ;i  given  case  maybe  determined.  The  several 
companies  keep  their  own  records  and  statistics,  but  do  not 
make  known  the  results  of  their  labors.  It  is  frequentlv 
stated,  however,  that  the  claims  for  injuries  or  death  arising 
from  accidents  in  travel  by  rail  or  water  do  not  aggregate 
seven  per  cent  of  those  made  against  accident  com  panics, 
while  the  claims  growing  out  of  the  use  of  horses  and  carriages 
exceed  in  number  those  arising  from  all  other  causes  com- 
bined.' 

1  7  Am.  L.  Reg.  583. 

(699) 


700  ACCIDENT   INSURANCE. 

There  are  two  plans  of  doing  business  in  accident  insurance. 
In  one,  the  organs  of  the  body  are  appraised  at  a  specified  sum, 
and  the  company  agrees  to  pay  a  certain  fixed  amount  for  the 
loss  of  a  hand,*  the  breaking  of  a  leg,  the  loss  of  an  eye,  etc. 
This  system  is  used  almost  entirely  in  Europe.  By  the  other 
plan,  the  company  insures  indemnity  for  injury  by  payment  of 
a  specified  weekly  allowance  during  the  time  the  insured  is 
disabled  by  the  injury,  or  compensation  for  death  by  payment 
of  a  fixed  sum  if  the  insured  dies  in  consequence  of  an  acci- 
dent. This  is  called  the  American  system,  though  the  two 
plans  are  sometimes  in  a  great  measure  combined  in  the  poli- 
cies issued  here.  Some  policies  cover  all  classes  of  accidents, 
while  others  are  limited  to  those  of  a  specified  nature,  as,  for 
instance,  accidents  while  traveling  by  public  conveyance. 
Accident  insurance  is  more  analogous  to  fire  than  to  life  in- 
surance, being  a  provision  for  indemnity,  except  in  case  of 
death  by  accident,  when  it  becomes  a  contract  to  pay  a  fixed 
sum,  and,  as  a  general  rule,  the  law  of  fire  and  life  insurance 
applies  also  to  accident  insurance. 

§  364.  What  is  an  accident  ? — Courts  have  in  many  cases 
been  called  upon  to  decide  whether  injury  from  particular 
causes  was,  or  was  not,  accidental,  but  as  yet  they  have  laid 
down  no  definition  of  an  accident,  which  has  been  generally 
accepted  as  satisfactory.  An  accident  has  been  defined  as  "  an 
event  that  takes  place  without  one's  foresight  or  expectation; 
an  event  which  proceeds  from  an  unknown  cause,  or  is  an  un- 
usual effect  of  a  known  cause,  and  therefore  not  expected;  "  ? 
"  an  event  which  takes  place  without  the  oversight  or  expecta- 
tion of  the  person  acted  upon  or  affected  by  the  event;  "  2  "  an 
unusual  and  unexpected  result  attending  the  performance  of  a 
usual  act; "  3  "  an  event  or  occurrence  which  happens  unexpect- 
edly, from  the  uncontrollable  operations  of  nature  alone,  and 
without  human  agency,  as  when  a  house  is  stricken  and  burned 
by  lightning  or  blown  down  by  tempest,  or  an  event  result- 
ing undesignedly  and  unexpectedly  from  human  agency  alone 
or  from  the  joint  operation  of  both  ; "  4  "  not  merely  inevitable 

1  Webster's  Diet.  310;  IT.  S.  Association  v.  Barry,  131 

2  Ripley  v.  Ins.  Co. ,  2  Bigelow's  L.    IT.  S.  100. 

&  Ace.  Cases   738;  Richards  v.  Ins.       "Morris  v.  Piatt,  32  Conn,  on  pg. 
Co.,  89  Cal.  170;  26  N.  East.  Rep.  762.    85. 

3  Provident  Life  v.  Martin,  32  Md. 


ACCIDENT   INSURANCE.  7<»1 

casualty,  or  the  act  of  God,  or  what  is  called  via  major  or  irre- 
sistible force,  but  rather  such  unforeseen  events,  misfortunes 
Losses  or  ((missions  as  are  not  the  result  of  any  negligence  of 
misconduct  in  the  party  who  seeks  the  relief."  '  It  is  some- 
thing which  happens  by  chance,  or  does  not  take  place  accord- 
ing to  the  usual  course  of  things.2  Some  violence,  casualty  or 
vis  major  is  necessarily  involved  in  the  term  "  accident." ''  It 
means,  in  short,  in  insurance  policies,  an  injury  which  happens 
by  reason  of  some  violence,  casualty  or  vis  major  to  the  as- 
sured, without  his  design  or  consent,  or  voluntary  co-opera- 
tion.4 

§  364a.  "  Horse  or  vehicle  policies,"  insuring  an  employer 
against  liability  for  accidental  injuries  to  others  than  em- 
ployes, caused  by  horses  or  vehicles  of  the  assured;  "eleva- 
tor policies"  insuring  against  accidental  or  personal  in- 
juries caused  by  elevators  or  their  appurtenances;  "general 
liability  policies,"  insuring  against  liability  for  accidental  per- 
sonal injuries  to  any  persons  other  than  employes  or  persons 
injured  by  elevators,  for  which  the  assured  may  be  liable  as 
landlord  or  tenant;  and  "  outside  liability  policies,"  insuring 
builders  and  contractors  against  liability  for  accidental  per- 
sonal injuries  to  workmen  employed  by  other  contractors,  and 
to  the  public,  caused  by  the  assured  or  by  his  workmen — are 
v accident"  insurance  policies  within  the  meaning  of  an  act 
providing  that  companies  may  be  formed  to  insure  against 
"  bodily  injury  and  death  by  accident,"  and  within  a  certifiU 
eate  issued  by  the  commissioner  entitling  a  foreign  company 
to  transact  ••accident  insurance"  in  the  state.6 

§  365.  Negligence  on  the  part  of  the  insured  contribu- 
ting to  the  injury. — It  has  been  repeatedly  held  in  this  country 
and  in  England  that  the  contract  of  insurance  is  an  exception 
to  the  rule  which  denies  compensation  for  an  injury  of  which 

1  Alexander  v.  Bailey,  70  Tenn.  (2  Travelers'  Ins.  Co.,  112  N.  Y.  472;  SO 

Lc;n  on  pg.  689;  Wait's  Actions  and  N.  Bast.  Rep.  847. 

Defenses,  VoL  1, 162;  Story's  Equity,  'Sinclair    v.    Assurance    Co.,  107 

Vol*li  Sec.  78.  Eng.  Com.  I,  (8  E1.&  El.)  478. 

!j3chneiderv.   Ins.  Co.,  24   Wis.  28;  *  Am.  L.  Review,  588;   Duncan    v. 

N.  A.  Ins.  Co.   v.  Burroughs,  69  Pa.  Association.  18  X.    Y.  Supp.  680;  I 

St.  43;  Barry  v.  Accident  Association,  Am   &  Eng,  Bncyc.  Law,  pg.  87. 

23  Fed.  Rep;  712;  Mallory  v.  Travel-  B  Employers' Liability  Co.  v.  Merrill 

ers'  Ins.  Co.,  17  N.   Y.  62;  Paul  v.  155   Mass.  404;  29  N.  East.  Rep.  529, 


702  ACCIDENT   INSURANCE. 

the  party's  own  negligence  or  want  of  due  care  has  been  the 
cause,  and  it  may  be  laid  down  as  the  settled  law  of  insurance, 
whether  life,  fire,  accident  or  marine,  that,  unless  there  is  a 
stipulation  to  the  contrary,  mere  negligence  or  carelessness  on 
the  part  of  the  insured  or  others  is  no  defense  to  a  policy. 
Protection  against  such  casualties  is  one  object  of  insurance.1 
But  a  company  may  stipulate  that  it  does  not  assume  a  certain 
risk,  and  an  injury  arising  from  the  negligence  of  the  insured 
may  be  excepted  from  the  benefits  of  the  contract.2  Such  neg- 
ligence as  raises  a  presumption  of  bad  faith,  amounting  to 
fraud  or  design,  avoids  a  policy; 3  and  negligence  which 
amounts  to  misconduct  is  not  insured  against.4 

The  fact  that  a  person  insured  against  injury  or  death  by 
accident  was  guilty  of  negligence  which  contributed  to  an  in- 
jury received  by  him,  will  not  prevent  a  recovery  on  the  pol- 
icy, where  such  policy  merely  provides  that  it  does  not  extend 
to  injuries  by  reason  of  his  "  willfully  and  wantonly  exposing 
himself  to  any  unnecessary  danger  or  peril."  5 

1  National  Ins.   Co.  v.  Webster,  83  4 Chandler  v.Ins.  Co.,  3  Cush.  (Mass.) 

111.  470;  Waters  v.  Ins.  Co.,  11  Peters  328;  Levi  v.  Ins.  Co.,  2  Wood  (U.  S. 

213;  Columbian  Ins.  Co.  v.  Lawrence,  C.  Ct.)63;  Citizens'  Ins.  Co.  v.  Marsh, 

10  Peters  507;  Firemen's  Ins.  Co.  v.  41   Pa.  St.    386;  May  on    Insurance, 

Powell,  13  B.  Mon.  (Ky.)  311;  Nelson  §§408,  411. 

v.  Ins.  Co.,  8  Cush.  477;  Sanford  v.  6  Schneider  v.  Ins.  Co.,  24  Wis.  28. 
Ins.  Co.,  12  Cush.  541;  Cumberland  The  court  said  :  "Avery  large  pro- 
Valley  Mutual  v.  Douglas,  58  Pa.  St.  portion  of  those  events  which  are 
419;  William  v.  Ins.  Co.,  31  Me.  219;  universally  called  accidents,  happen 
Germania  Ins.  Co.  v.  Sherlock,  25  through  some  carelessness  of  the 
Oh.  St.  33;  St.  Louis  Ins.  Co.  v.  Glas-  party  injured,  which  contributes  to 
gow,  8  Mo.  713;  Walker  v.  Maitland,  produce  them.  Thus,  men  are  in- 
5  Barn.  &  Aid.  175;  Dixon  v.  Sadler,  jured  by  the  careless  use  of  fire-arms, 
5  Mees.  &  Wels.  405;  Shaw  v.  Rob-  of  explosive  substances,  of  machin- 
berds,  6  Ad.  &  El.  75;  Miller  v.  Mu-  ery,  the  careless  management  of 
tual  Benefit  Life  Ins.  Co.,  31  Iowa  horses,  and  in  a  thousand  ways, 
216;  Holterhoff  v.  Ins.  Co.,  4  Big.  where  it  can  readily  be  seen  after- 
Life  &  Ace.  Cas.  395;  U.  S.  Associa-  ward  that  a  little  greater  care  on 
tion  v.  Barry,  131  U.  S.  100.  then-  part  would  have  prevented  it. 

s  Travelers'  Ins.  Co.   v.    Seaver,    19  *    *    ft  is  true  that  accidents  often 

Wall.   539;  City  v.   Ins.  Co.,  9  Gray  happen  from  such  kinds   of  negli- 

(Mass.)  97.  gence.     But,  still,  it  is  equally  true 

3 Toledo,  etc.,  R.  W.  Co.  v.  Pindar,  that  they  are  not  the  usual  result.  If 

53  111.  447;  Henderson  v.  Ins.  Co.,  10  they  were,  people  would  cease  to  be 

Rob.  (La.)  164;  see  authorities  alxrve  guilty  of  such  negligence.     But  cases 

cited;   see  also  Aurora  Ins.    Co.    v.  in    which   accidents  occur  are  very 

Johnson   46  Ind.  315.  rare  m  comparison  with  the  number 


ACCIDENT    INSURANCE. 


ro3 


In  Kentucky  it  was  held  in  an  early  case,  where  there  was 
no  provision  in  the  policy  concerning  the  use  of  due  care  on 
the  part  of  the  insured  for  his  personal  safety,  "  that  if  a  party 
causes  or  contributes  to  the   accident,  the  company  is  not  lia- 


in  which  there  is  the  same  negli- 
gence without  any  accident.  A  man 
draws  his  loaded  gun  toward  him  by 
the  muzzle,  the  servant  fills  the 
lighted  lamp  with  kerosene — a  hun- 
dred times  without  injury.  The  next 
time  the  gun  is  discharged,  and  the 
lamp  explodes.  The  result  is  unusual, 
and  therefore  as  unexpected  as  it 
had  been  in  all  the  previous  in- 
stances. So  there  are,  undoubtedly, 
thousands  of  persons  who  get  on  and 
off  from  the  cars  in  motion  without 
accident,  where  one  is  injured.  And, 
therefore,  when  an  injury  occurs,  it 
is  an  unusual  result  and  unexpected, 
and  strictly  an  accident."  See  Tooley 
v.  Assurance  Co.,  3  Bissell  399;  2  Ins. 
L.  J.  275.  Where  the  contract  ex- 
empts the  insurer  in  case  of  willful 
and  wanton  exposure  of  the  insured 
to  any  unnecessary  danger  or  peril, 
contributory  negligence  on  the  part 
of  the  insured  will  not  prevent  a  re- 
covery, where  he  received  the  injury 
in  consequence  of  getting  from  the 
platform  at  a  railroad  depot  upon  the 
cars  while  in  motion  at  a  rate  of 
speed  less  than  that  of  a  man  walk- 
ing. In  Schneider  v.  Ins.  Co.,  supra, 
it  was  said:  "The  question,  there- 
fore, remains,    whether  the  attempt 

(it  the  deceased   to  gel   Upon  the  train 

was  within  this  provision,  and  con- 
stituted a  '  willful  and  wanton  ex- 
posure of  himself  to  unnecessary 
danger.'  I  can  not  think  so.  The 
evidence  showed  that  the  train,  hav- 
ing once  been  to  the  platform,  had 
backed  so  that  the  cars  stood  at  some 
little  distance  from  it.  While  it  was 
waiting  there,  the  deceased  was  walk- 
ing back  and  forth  on  the  platform. 
It  is  very  probable   that  he  expected 


the  train  to  stop  there  again  before 
finally  leaving.  But  it  did  not.  It 
came  along,  and,  while  moving  at  a 
slow  rate,  not  so  fast  as  a  man  would 
walk,  he  attempted  to  get  on,  and, 
by  some  means,  fell  either  under  or 
by  the  side  of  the  cars,  and  was 
crushed  to  death.  The  act  may 
have  been  imprudent.  It  may  have 
been  such  negligence  as  would 
have  prevented  a  recovery  in  an 
action  based  upon  the  negligence  of 
the  company,  if  there  had  been  any. 
But  it  does  not  seem  to  have  con- 
tained those  elements  which  could  be 
justly  characterized  as  willful  or 
wanton.  The  deceased  was  in  the 
regular  prosecution  of  his  business. 
He  desired  and  expected  to  leave  on 
that  train.  Finding  that  he  would 
be  left,  unless  he  got  on  while 
it  was  in  motion,  it  was  natural 
enough  for  him  to  make  the  at- 
tempt. The  strong  disinclination 
which  people  have  to  being  left, 
would  impel  him  to  do  so.  The  rail- 
road employes  were  getting  on  at 
about  the  same  time.  Imprudent 
though  it  is.  it  is  a  common  practice 
tor  others  to  get  on  and  oil  in  th. 
same  manner.     lie  had  undoubtedly 

seen  it  done,    it    he    bad    not  d >  it 

himself,  many  times,  without  injury. 
I  can  not  regard  it.  therefore,  as  a 
willful  and  wanton  exposure  of  him- 
self to  unnecessary  danger,  within 
the  meaning  of  the  policy."  In 
Champlain  \.  Assurance  Company, 
()  Lans.  (N.  Y.i  71.  it  was  held  that 
an  accident  policy,  covering  risks 
while  traveling,  Insured  th.'  holdei 
against  an  accident  which  occurred 
while  he  was  getting  into  a  public 
conveyance  for  passengers,  while  in 


704  ACCIDENT    INSURANCE. 

ble,  and,  therefore,  where  the  insured  inadvertently  put  his 
arm  out  of  the  window  of  a  railroad  car,  and  it  was  hit  by  a 
post,  so  that  he  was  disabled  for  many  weeks,  as  the  accident 
was  produced  by  his  fault,  and  resulted  from  the  dangerous 
position  in  which  he  had  needlessly  and  negligently  placed 
his  arm,  and  which,  if  not  to  be  expected  from  the  position  in 
which  he  placed  it,  was  at  least  probable,  and  as  it  did  not  re- 
sult from  any  of  the  dangers  common  to  passengers  upon  that 
or  other  railroads,  he  had  deprived  himself  of  all  right  to  com- 
pensation." '  But  this  decision  has  been  generally  condemned 
as  being  unsupported  by  reasoning  or  precedent.2  It  is  un- 
doubtedly true,  however,  that  where  the  negligence  of  the  in- 
sured has  been  so  gross  as  to  raise  the  presumption  that  he 
designed  the  infliction  of  the  injury,  or  where  he  has  reck- 
lessly, willfully  and  Avantonly  exposed  himself  to  unnecessary 
danger,  he  can  not  recover,  though  there  be  no  provision  in  the 
contract  as  to  due  care  on  his  part,  for  no  man  can  be  per- 
mitted in  a  court  of  justice  to  profit  by  his  own  wrong;  he 
can  not  lay  the  foundation  of  a  claim  to  insurance  in  his  own 
reckless  and  willful  act  or  misconduct.  It  is  incumbent  on 
the  compan3r  in  such  cases  to  prove  the  misconduct  and  gross 
negligence  of  the  insured. 

§  366.  Due  diligence  for  personal  safety  and  protection. 
— It  is  common  for  accident  insurance  policies  to  contain  a 
provision  that  the  insured  shall  use  due  care  for  his  personal 
safety.  When  the  contract  contains  such  a  provision,  negli- 
gence or  want  of  due  care  on  the  part  of  the  insured  will  avoid 
it.     Under  such  a  contract  it  is  always  a  question  of  fact  for 

motion.  In  cases  where  the  founda-  contract,  the  observance  of  due  care 
tion  of  the  action  is  an  injury  occa-  and  diligence  on  the  part  of  the  as- 
sioned  by  the  negligence  of  the  sured,  is  no  element  of  the  contract 
defendant,  and  the  liability  of  the  on  his  part,  and  can  in  no  way  affect 
latter  grows  out  of  such  negligence,  the  right  of  action  thereon.  Provi- 
it  is  always  a  good  defense  to  show  dence  Life  v.  Martin,  32  Md.  310; 
contributing  negligence  on  the  part  Tooley  v.  Assurance  Company,  3 
of  the  plaintiff,  but  the  rule  is  Biss.  399;  2  Ins.  L.  J.  275. 
different  where  the  liability  of  ]  Morel  v.  Ins.  Co.,  4  Bush  (Ky.) 
the  defendant  is  created  by  a  con-  535;  see  dictum  in  Brown  v.  Ins.  Co., 
tract,   one    of   the  chief  objects    of  45  Wis.  221. 

which  is  to  protect  the  insured  -  Bliss  on  Insurance,  §  400;  May  on 
against  his  own  mere  carelessness  or  Insurance,  §  530;  7  American  Law 
negligence.     Unless  stipulated  in  the   Review  594. 


ACCIDENT    INSURANCE.  TOO 

the  jury  to  determine,  under  all  the  circumstances  of  the  case, 
whether  the  exposure  of  the  insured  to  the  injury  done  was 
such  as  a  prudent  man  would  subject  himself  to,  and  whether, 
in  doing1  or  omitting  to  do  an  act,  he  exercised  that  degree  of 
care  which  a  prudent  man  would  exercise.1  The  requirement 
that  the  insured  shall  "  use  all  due  diligence  for  personal  safety 
and  protection1'  is  a  very  general  phrase,  and  does  not  mean 
that  he  may  not  recover  for  an  accident  to  which  some  want 
of  care  on  his  part  may  have  contributed.  lie  is  not  required 
to  use  all  possible  diligence,  but  only  all  due  diligence.  Due 
diligence  or  care  is  a  relative,  not  a  precise  term,  and  is  con- 
sistent with  inadvertence  or  with  running  such  risks  as  pru- 
dent and  cautious  persons  habitually  run.  It  would  not  be 
reasonable  to  hold  that  this  clause  requires  of  the  insured  a 
higher  degree  of  diligence  than  prudent  persons  are  accustomed 
habitually  to  use.'  The  question  of  negligence  is  not  always 
to  be  tried  by  the  same  tests,  for  what  a  prudent  man  might 
naturally  do  under  some  circumstances  he  might  shrink  from 
doing  under  others;  and  it  is  therefore  necessary  that  the  jury 
should  be  enlightened  as  to  the  particular  facts  of  each  case. 
Where  the  assured,  in  building  a  barn,  stepped  upon  a  joist  in 
the  second  story  to  examine  the  work,  fell  from  there  and  died 
from  the  injuries  received,  it  was  shown  to  the  jury  that  lie 
was  an  awkward  man,  that  he  had  on  two  overcoats  at  the  time 
of  the  accident,  and  that  the  joist  broke  from  a  concealed 
defect,  causing  his  fall  to  the  ground.  The  court  held  that  it 
was  for  the  jury  to  say  whether  the  deceased  had  used  "all 
due  diligence  for  personal  safety  and  protection;''  and  that 
their  verdict  against  the  company  was  warranted.3  The 
insured  was  struck  by  a  locomotive  engine  while  he  was 
walking  along  a  railroad  track,  and  it  was  held  that  he  had 
not  used  due  diligence  for  his  protection.4  In  an  action  on  an 
accident  insurance  policy  it  appeared  that  the  insured,  while 

1  Providence  Life  v.  Martin,  32  Md.        3  Adm'rs  of  Stone  v.  Casualty  Co., 
310;  Travelers'  Ins.  Co.  v.  Beaver,   19    aupra;  Wilson  v.  Association  (.Minn.). 
Wall.  581;  Adm'rs  of  Stone  v.  Casvi-   55  X.  W.  Rep.  636. 
alty  Co.,  34  N.  J.  L.  (5  Vroom)  371;       47  Am.  L.    Review  595;  Cornish  v. 
Tooley  v.  Assurance  Co.,  3  Bias.  399;    Ins.  Co.,  23  L.  R.,  Q.  B.  D.  453. 
2  Ins.  L.  J.  875. 

*  Keene  v.  Association  (Mass.),  36  N. 
East.  Rep.  891. 
45 


706  ACCIDENT    INSURANCE. 

crossing  railroad  tracks  in  going  to  the  station,  when  part  way 
over,  had  his  view  obstructed  of  the  further  track,  and,  as  he 
was  approaching  it,  was  called  to  by  an  employe  of  the  rail- 
road company  to  "  look  out  for  the  express,"  and  was  shouted 
to  by  others,  and,  hastening  forward,  was  killed  by  the  express 
train.  It  was  held  that  the  question  whether  he  had  used  "  all 
due  diligence  for  personal  protection,"  as  required  by  the 
policy,  was  for  the  jury.1  Where  the  insured  is  required  by 
the  contract  to  use  all  due  diligence  for  his  personal  safety 
and  protection,  no  recovery  can  be  had  for  his  death,  caused 
by  his  being  struck  by  a  railroad  train,  while  running  along 
the  track  in  front  of  it  in  the  night  time,  for  the  purpose  of 
getting  on  a  train  approaching  in  an  opposite  direction  on  a 
parallel  track.2  A  passenger  on  a  railway  car,  who  was  injured 
by  being  thrown  from  the  steps  of  the  car,  where  he  was 
standing  while  the  train  was  approaching  a  station,  is  not 
entitled  to  recover  on  a  contract  providing  for  the  exercise  of 
due  diligence  on  the  part  of  the  insured  for  self-protection.3 

It  is  not  negligence^/'  se  to  ride  on  the  platform  of  a  street 
car.4  Whether  one  is  exercising  due  diligence  for  his  personal 
safety  in  crossing  in  the  clay  time  the  railroad  tracks  at  a  sta- 
tion at  a  place  where  they  were  commonly  crossed  by  persons, 
and  in  carrying  at  the  time,  to  protect  himself  from  rain,  an 
umbrella  which  cut  off  his  sight  of  the  tracks,  is  a  question 
to  go  to  the  jury.6  To  climb  over  or  between  stationary  cars, 
without  looking  to  see  whether  they  are  attached  to  an 
engine  or  not,  is  gross  negligence,  and  precludes  a  recovery 
for  injuries  received  while  making  the  attempt.8  If  an  injury 
happen  while  the  insured  is  traveling  and  is  occupying  a  place 
provided  for  the  accommodation  of  passengers,  nothing  fur- 
ther is  ordinarily  necessary  to  show  due  care.  But  when  he 
leaves  such  a  place  and  occupies  an  exposed  position,  as  upon 

'Duncan  v.  Preferred  Mut.   Ace.  231;  42  N.  W.  Eep.  936;  Sawtelle  v. 

Ass'n,  13  N.  Y.  S.  620.  Assurance  Co.,  15  Blatchford  216. 

2Tuttlev.  Ins.  Co.,  134  Mass.  175;  4  Sutherland   v.  Standard  L.  &  A. 

Lovell  v.  Ins.  Co.,   3  Ins.  L.   J.  877;  Ins.    Co.  (Iowa)  54  N.  W,    Rep.  453: 

Travelers'  Ins.  Co.  v.  Jones,  80  Ga.  Nolan  v.  Railway  Co.,  87  N.  Y.  63. 

541;  7-S.  E.  Rep.  83.  6Keene  v.  Association  (Mass.),    36 

3Bonv.  Assurance  Co.,  56  Iowa  664;  N.  East.  Rep.  891. 

see  Marx  v.   Ins.  Co.,  39  Fed.  Rep.  .    6  Beam  v.  Assurance  Co.,  50  Mo. 

321 ;  Hull  v.  Accident  Ass'n,  41  Minn.  App.  459. 


ACCIDENT    INSURANCE.  TOT 

the  platform  of  a  car,  it  must  appear  upon  some  ground  of 
necessity  or  propriety,  that  his  position  was  consistent  with 
the  exercise  of  proper  care  and  caution  on  his  part.1  Where 
'it  is  a  condition  of  the  policy  that  "the  party  insured  is 
required  to  use  all  due  diligence  for  personal  safety  and  pro- 
tection," the  burden  is  on  the  company  to  show  that  he  has 
not  used  all  due  diligence.2  Where,  in  a  suit  on  a  policy, 
providing  that  the  assured,  a  railroad  switchman,  should  at 
all  times  use  due  care  for  his  personal  safety,  the  company 
pleads  that  the  assured  failed  to  use  due  care,  but  contributed 
directly  to  his  injury  by  getting  off  a  moving  engine  with  his 
back  in  the  direction  in  which  it  was  going,  a  replication 
which  does  not  deny  that  the  assured  failed  to  use  due  care, 
but  only  alleges  that  he  was  insured  as  a  switchman,  and  that 
the  injury  occurred  while  in  the  discharge  of  his  customary 
duties,  is  insufficient  in  assuming  that  the  policy  would  cover 
all  such  injuries,  whether  the  assured  was  in  the  exercise  of 
due  care  or  not.3 

§  3CT.  Voluntary  exposure  to  unnecessary  danger — Ob- 
vious risk. — Negligence  and  "  exposure  to  unnecessary  dan- 
ger "  have  been  held  to  be  equivalent  terms,4  but  there  is  a 
difference  between  negligence  and  "willful  and  wanton  expos- 
ure to  unnecessary  danger."6  As  was  stated  in  a  preceding 
paragraph,  where  the  liability  of  a  company  is  created,  not  by 
negligence,  but  by  a  contract,  one  of  the  principal  objects  of 
which  is  to  protect  the  insured  against  his  own  mere  careless- 
ness, contributing  negligence  on  his  part  is  not  a  good  defense 

'Bon  v.    Assurance    Co.,    supra;  which    courts    have  recognized,   in 

Hickey  v.  R.  R.  Co.,  14  Allen  (Mass.)  compelling  the  insurance  company 

4-29;  Lucas  v.  R.  R.  Co.,  6  Gray  04;  to  allege  and  prove  the  want  of  com- 

Redfield on  Railways,  Vol. 2, pp.  260,  pliance  with  any  particular  proviso 

267    and    cases    cited;    Damount   v.  or  condition  on  which  it  relies  as  a 

Railway  Co.,  9  La.    Ann.   141:   Marx  defense.      Piedmont    Ins.   Co.  v.  Ew- 

v.  Ins.  Co.,  39  F.-d.  Rep.  821;  Hull  v.  ing,  92  C.   S.  :'>77:   Duncan  v.    Asso- 

Accident  Association,  41  Minn.  281;  ciation,   18  N.  V.  Supp.  620;  Baden- 

12  N.  W.  Rep.  936.  feld   v.    Association,  L54  Mass.  77:  27 

•' Freeman    v.   Travelers1  Ins.   Co.,  N.  East.  Rep.  1069. 
141  Bfass.  572;  L2  X.  East.  Rep.  872;         standard    Lite  v.  Jones,  94  Ala 

16  Ins.  L.   J.  822;  86  Alb.  L.  J.  127.  184;   LOSo.  Rep.  •"■>:',(>. 
The    court    was    divided    upon    the        'Saw  telle    v.    Assurance    Co..     15 

point.    In  an  action  on  a  policy  con-  Blatchford  216. 

tainin^    many    provisos   and   condi-       'Schneider  v.  Ins.  Co.,  24  Wis.  28; 

tions,   there   is   a  practical  wisdom,  see  -j  305. 


708  ACCIDENT    INSURANCE. 

to  such  liability,  unless  there  be  a  stipulation  that  the  contract 
shall  not  extend  to  death  or  injury  caused  by  his  negligence, 
by  his  want  of  due  diligence  for  his  self -protection,  or  by  vol- 
untary exposure  to  unnecessary  danger.  Where  some  such 
limitation  on  the  liability  of  the  company  is  inserted  in  the 
contract,  the  negligence,  want  of  diligence,  or  exposure  of  the 
insured,  is  fatal  to  a  recovery,  and  is  measured  by  much  the 
same  tests  as  are  applied  to  the  acts  or  omissions  of  a  person 
who  has  been  injured  through  the  negligence  of  another; '  and 
whatever  would  constitute  contributory  negligence  in  an  action 
of  tort  may  be  set  up  as  a  defense  to  an  action  on  such  a  con- 
tract. It  must  be  remembered,  however,  that  in  an  action  for 
damages  for  the  negligence  of  the  defendant,  the  burden  is  on 
the  plaintiff  to  show  affirmatively  due  care  on  his  part,  and 
that,  in  an  action  on  an  accident  policy,  death  through  vio- 
lent, external  and  accidental  means  having  been  proved,  the 
burden  of  proof  is  on  the  defendant  to  show  a  voluntary  ex- 
posure to  unnecessary  danger,  or  a  want  of  due  diligence. 
The  burden  of  proof,  therefore,  is  different,  and  the  questions 
of  due  diligence  and  of  voluntary  exposure  to  unnecessary  dan- 
ger arise,  not  upon  general  principles  of  the  law  of  negligence, 
but  upon  the  construction  of  the  contract  of  insurance  against 
accidents.  It  is  evident  that  such  a  contract  should  be  con- 
strued with  more  liberality  to  the  assured  than  the  rules  of  the 
common  law  would  be  where  he  sought  under  them  to  put  the 
responsibility  for  his  accident  upon  another.2  "Voluntary 
exposure  to  unnecessary  danger,"  in  an  accident  insurance 
policy  exempting  the  insurer  from  liability  for  death  produced 
from  such  exposure,  means  wanton  or  grossly  imprudent  ex- 
posure.3 

A  locomotive  engineer,  while  backing  his  engine  down  a 
grade  with  a  car  in  front  as  a  precaution  to  check  its  speed, 
directed  the  fireman  to  run  it,  went  upon  and  over  the  tender 

'Bon  v.  Assurance  Co.,  56  Iowa  3  Manufacturers'  Indemnity  Co.  v. 
664;  Scheiderer  v.  Ins.  Co.,  58  Wis.  Dorgan,  58  Fed.  Rep.  945;  Equitable 
13;  Sawtelle  v.  Assurance  Co.,  15  v-  Osborn,  90  Ala.  201;  9  So.  Rep. 
Blatchford  216;  Travelers'  Ins.  Co.  v.  869;  Bean  v.  Assurance  Co.,  50  Mo. 
Seaver,  86  U.  S.  531;  Cornish  v.  Ins.  APP-  459- 
Co.,  23  L.  R.,  Q.  B.  D.  453. 

2  Keene  v.  Association  (Mass.),  36 
N.  East.  Rep.  891. 


ACCIDENT   INSURANCE.  709 

to  get  into  this  car  to  draw  the  brakes,  and  in  doing  so  slipped 
and  fell  between  the  car  and  the  tender,  and  was  instantly 
killed,  by  the  tender  passing  over  his  body;  and  it  was  left  to 
the  jury  to  say  whether  he  had  willfully  exposed  himself  to 
unnecessary  danger  within  the  prohibition  of  the  policy.1  A 
contract  of  insurance  provided :  "  No  claim  for  insurance 
shall  be  made  when  death  or  injury  may  have  happened  in 
consequence  of  exposure  to  unnecessary  danger,  hazard,  or 
perilous  adventure."  The  assured  died  by  falling  from  the 
platform  of  a  railroad  car,  about  midnight,  when  the  train  was 
in  full  motion,  in  attempting  to  pass  from  one  car  to  another. 
The  court  said  :  "  There  were  no  disputed  facts,  and  no  dis- 
putable inferences  of  fact,  which  presented  a  question  for  the 
jury.  The  naked  question,  therefore,  is  one  of  law,  whether 
or  not  the  act  of  passing  from  car  to  car  while  the  train  is  at 
full  speed,  and  in  the  night  time,  is  negligence;  and  this  ques- 
tion must  be  resolved  in  the  affirmative.  Doubtless,  circum- 
stances of  such  peril  might  exist,  as  would  justify  a  passenger 
in  attempting  to  escape  from  the  car  in  which  he  might  be 
located;  but  no  such  circumstances  were  shown  here.  If  the 
deceased  had  fallen  from  the  platform  and  been  injured  by  the 
breaking  of  the  coupling  between  the  cars,  the  railroad  com- 
pany could  have  successfully  defended  an  action  to  recover 
damages,  upon  the  ground  of  his  concurring  negligence, 
although  it  might  have  been  shown  that  the  coupling  gave  way 
because  of  defects  in  its  fastening  or  material.  Negligence  is 
the  absence  of  that  care  which  a  reasonable  and  prudent  man 
would  exercise  under  the  circumstances  of  the  case;  and,  can 
it  be  doubted,  that  a  prudent  man  would  understand  that  he 
was  acting  at  his  peril,  if  he  attempted  in  the  night  time  and 
while  the  train  was  under"  full  headway,  to  pass  from  one  car 
to  another?  Such  are  the  undulations  of  a  railway  car,  when 
the  train  is  in  rapid  motion,  that  locomotion  within  the  car  is 
a  task  of  some  difficulty.  The  passenger  moves  with  uncer- 
tain step,  and  seeks  assistance  by  grasping  the  seats,  as  the 
car  sways  to  and  fro.  But,  the  passage  from  ear  to  ear  is 
attended  with  greater  difficulty.  The  din  and  clamor  of  the 
train,  the  rushing  of  the  wind  and  dust  and  smoke,  the  con- 

1  Providence  Life  v.  Martin,  32  Md.  310.     The  jury  decided  that  he  had 

not. 


710  ACCIDENT   INSURANCE. 

sciousness  that  a  misstep  or  miscalculation  of  distances  may 
be  fatal,  tend  to  confuse  or  excite  the  faculties  and  disturb  the 
judgment;  and,  although  it  is  a  common  practice  thus  to  pass 
from  car  to  car,  it  is  rarely  accomplished  without  experiencing 
a  sense  of  relief  when  it  has  been  safely  done.  When  dark- 
ness adds  another  condition  of  uncertainty  to  the  attempt, 
there  can  be  no  justification  of  the  act,  in  the  mind  of  any  pru- 
dent man."  1 

§  368.  It  is  an  "  obvious  risk,"  within  the  meaning  of  a 
policy  for  an  insured  to  walk  on  a  railroad  track,  on  a  dark 
and  rainy  night,  at  a  time  when  he  knows  that  trains  are  fre- 
quently passing  upon,  it  and  other  tracks  lying  beside  it.  If 
he  is  injured  in  so  doing,  it  is  not  enough  that  he  did  not  see 
or  hear  the  train  which  struck  him,  because  he  was  engaged  in 
avoiding  another  train.  The  danger  was  certain  and  ought  to 
be  present  to  the  mind  of  a  man  of  ordinary  sense  and  prudence. 
The  words  "  obvious  risk,"  designate  not  only  a  risk  which  may 
be  readily  perceived  by  the  eye  or  the  senses,  but  also  one 
which  may  be  perceived  by  the  intellect.  Hunting,  bathing 
and  many  other  acts  daily  done  involve  some  obvious  risk  or 
danger,  but  the  test  seems  to  be  whether  the  insured  ran  a 
greater  danger  than  a  man  of  ordinary  or  reasonable  prudence 
would  encounter.2  A  policy  provided  that  no  claim  should  be 
made  under  it  "when  the  death  or  injury  may  have  happened 
in  consequence  of  exposure  to  any  obvious  or  unnecessary  dan- 
ger," and  it  was  held  that  no  recovery  could  be  had  for  the 
death  of  the  insured,  caused  by  his  being  struck  by  a  railroad 
train,  while  running  along  the  track  in  front  of  it  in  the  night- 
time, for  the  purpose  of  getting  on  a  train  approaching  in  an 
opposite  direction  on  a  parallel  track.3 

1  Sawtelle  v.  Assurance  Co.,  supra,  new  force   or    power  which  inter- 

2  Lovell  v.  Ins.  Co.,  3  Ins.  L.  J.  877;  vened,  of  itself  sufficient  to  stand  as 
5  Ins.  L.  J.  559;  Duncan  v.  Associa-  the  cause  of  the  misfortune;  that  it 
tion.  13  N.  Y.  Supp.  620.  was    for     the     jury    to     determine 

3Tuttle  v.  Ins.   Co.,  134  Mass.  175.  whether  or  not  the  railroad  corpora- 

The  court  in  this  case  said:     "  The  tion  was  negligent;  and  that,  if  so, 

plaintiff  contends  that  it  was  not  the  the  negligence  of  the  assured,  if  it 

exposure  or  negligence  of  the  assured  existed,  was  too  remote  to  defeat  the 

which  caused  his  death,  but  the  com-  policy.     Louisiana  Mutual  v.  Tweed, 

ing  upon  him  of  the  locomotive  en-  7  Wall.    44;  Milwaukee,   etc.,  R.  W. 

gine,  the  bell  or  whistle  of  which  may  Co.  v.    Kellogg,    94  U.    S.   469.   475; 

not    have  sounded;  that  this  was  a  Scheffer  v.  Railroad  Co.,  105  U.  S. 


ACCIDENT    INSURANCE. 


711 


The  assured  undertook  in  the  day  time  to  cross  the  railroad 
tracks  at  a  station,  at  a  place  where  the}r  were  commonly 
crossed  by  persons,  and  he  was  struck  and  killed  by  detached 
freight  cars  which  had  been  "  kicked "  along  the  track,  the 
sight  of  which  was  cut  off  by  an  umbrella  which  he  was  car- 
rying to  protect  himself  from  rain.  It  was  held  that  his  acts 
were  not  necessarily  a  voluntary  exposure  to  unnecessary 
danger,  and  that  a  jury  should  determine  whether  or  not  they 
were.1  The  insured,  on  his  way  to  work,  after  waiting  ten  or 
fifteen  minutes,  undertook  to  pass  between  cars  in  a  freight 
train  standing  at  a  crossing,  though  he  could  have  gone  around 
it.  He  made  no  investigation  as  to  whether  an  engine  was  at- 
tached  or  not.  His  foot  was  caught  between  the  drawheads 
and  mashed.  It  was  held  that  the  exposure  was  voluntary 
and  unnecessary,  and  that  no  recovery  could  be  had  on  the 
policy.2  For  a  person  with  two  packages  in  his  hands  or  arms 
to  attempt,  during  a  dark  and  rainy  night,  by  choice,  to  pass 


249.  252.  But,  without  speculating 
as  to  possible  cases,  we  do  not  think 
that  the  doctrine  relied  on  is  appli- 
cable to  this  case.  If  a  person  volun- 
tarily places  himself  in  a  position 
where  he  is  exposed  to  an  obvious 
danger,  and  the  precise  injury  Imp- 
pens  to  him,  which  there  is  reason  to 
fear,  it  can  not  fairly  be  held  that  tbe 
language  of  this  policy  was  not  in- 
tended and  understood  to  be  appli- 
cable to  such  a  case.  For  example,  if 
one  while  walking  on  a  railroad  track 
is  assaulted  by  a  robber  or  a  dog,  or 
is  struck  by  lightning,  bis  act  of 
traveling  there   bas  no  tendency  to 

produce  the   in  jury,  and    is  not  to  be 

deemed  a  contributory  cause  thereof. 
But,  on  the  other  band,  if  one  who 
goes  int<>  a  battle  is  hit  by  a  bullet, 
or  if  one  who  goes  up  in  a  balloon  i* 
blown  out  to  sea  by  the  currents  of 
air,  or  if  one  who  makes  a  railroad 
track  his   path  for  travel  is  run   over 

by  a  passing  locomotive  engine,  he 
must  ordinarily  in  any  legal  question 
be  held  to  take  the  risk  of  those 
results.     There   is   in  each   of   these 


cases  such  an  association  of  cause  and 
effect,  that  the  one  must  be  held  to 
have  contributed  to  the  other.  To 
bold  that  the  death  of  the  assured  in 
the  present  case  did  not  happen  in 
consequence  of  his  exposure  to  the 
risk,  but  from  a  new  force  or  power 
which  intervened,  would  be  to  fritter 
away  the  language  of  the  policy  by 
metaphysical  distinctions  too  fine  to 
enter  into  the  understanding  or  con- 
templation of  parties  engaged  in  the 
practical  business  of  making  a  con- 
tract of  insurance.  We  must  assume 
that  the  assured  read  his  policy  and 
was  acquainted  with  its  language  and 
attached  some  practical  meaning  t<> 
it."  Travelers"  Ins.  Co.  v.  Beaver,  86 
I".  S.  531;  (lull"  v.  Ins.  Co..  18  Allen 
808,  319;  S.  C,  99  Mass.  817,  829; 
Barperv.  Ins. Co.,  19 Mo. 506;  White 
v.Lang.  128  Mass,  598;  Cornish  v. 
In-,.  Co..  28  L.  R.,  Q.  B.  D.  158. 

'Keen-   v.  Association     'Mass.),    36 

N.  East.  Rep.  891. 

■  Bean  v.    Assurance   Co.,   50  Mo. 
App,  459. 


712  ACCIDENT   INSURANCE. 

over  a  trestle  which  he  knows  to  be  dangerous,  other  ways  of 
travel  being  open  to  him,  is,  on  his  part,  "  voluntary  exposure 
to  unnecessary  danger,  hazard  or  perilous  adventure,"  notwith- 
standing this  was  his  usual  way  of  travel,  his  usual  route  to 
his  home,  and  he  and  many  others  had  been  going  that  way 
for  ten  years.1  The  rule  is  well  settled  that  a  party  can  not 
walk  on  a  railroad  track  without  being  guilty  of  negligence, 
but  this  means  walking  on  a  railroad  track  in  the  ordinary 
sense — using  it  as  a  public  highway.  The  using  of  a  track  to 
cross  a  street  or  the  crossing  of  a  track  at  its  intersection  Avith 
a  street  is  not  necessarily  a  negligent  act.2  But  one.  about  to 
cross  the  track,  or  to  use  it  as  a  street  crossing,  must  look 
both  ways  before  attempting  to  go  upon  it.  and,  if  he  omits 
to  do  that,  he  is  guilty  of  negligence  and  voluntary  exposure 
to  unnecessary  danger.  An  insured,  after  he  had  been  warned 
not  to  do  so,  drove  into  a  train  yard  of  a  railroad  company, 
where  he  could  have  no  business,  became  entangled  in  a  net- 
work of  tracks,  and  was  killed  by  a  locomotive.  It  Avas  held 
that  he  had  voluntarily  exposed  himself  to  unnecessary  danger.3 
§  369.  There  is  a  clear  distinction  betAveen  a  voluntary  act 
and  a  voluntary  exposure  to  danger.  A  hidden  danger  may 
exist,  and  yet  the  exposure  to  it,  Avithout  any  knoAvledge  of 
the  danger,  does  not  constitute  a  voluntary  exposure;  nor  does 
an  approach  to  an  unknoAvn  and  unexpected  danger  make  the 
act  a  voluntary  exposure  thereto.  The  result  of  the  act  does 
not  necessarily  determine  the  moti\Te  Avhich  prompted  the  ac- 
tion. The  act  may  be  voluntary;  and  at  the  same  time  the 
exposure  may  be  involuntary.  Where  the  danger  is  unknoAvn, 
the  injury  is  accidental,  and  not  the  result  of  voluntary  ex- 
posure. To  make  an  insured  guilty  of  a  "  voluntary  expos- 
ure to  danger,"  he  must  intentionally  have  done  some  act 
which  reasonable  and  ordinary  prudence  would  pronounce 
dangerous.  A  railway  train  stopped  on  a  draAvbrulge  at  night. 
Several  passengers  alighted  and  stood  near  one  end  of  the  car. 
A  brakeman  stood  near  them  Avith  a  lantern  Avhich  Avas  so 

1  Travelers'  Ins.  Co.  v.  Jones,  80  Ins.  Co.  v.  Osborn,  90  Ala.  201 ;  9  So. 
Ga.  541;  7  S.  East.  Rep.  83.  Rep.  869. 

2  Wright  v.  Ins.  Co.,  29  Up.  Can.  C.  3  Neill  v.  Ins.  Co.,  7  Can.  L.  J.  44; 
P.  221;  Duncan  v.  Association,  13  N.  31  Up.  Can.  (C.  P.)  394;  7  Up.  Can. 
Y.  Supp.   620;    Equitable    Accident  App.  570. 


ACCIDENT    INSURANCE.  713 

placed  that  the  insured  could  see  the  floor  of  the  bridge  near 
it,  but  could  not  see  the  floor  at  the  foot  of  the  steps  of  the 
car  on  which  he  was  standing.  He  stepped  off  the  car  in  plain 
sight  of  the  brakeman,  and  no  notice  was  given  to  passengers 
that  it  was  dangerous  to  get  out  of  the  coach  where  it  stood. 
The  floor  had  been  torn  up,  and  instead  of  landing  on  it,  he 
fell  through  a  hole,  and  was  killed.  The  court  held,  that  his 
act  of  stepping  off  the  coach  was  not  a  voluntary  exposure  to 
unnecessary  danger.1  The  cleaning  of  a  gun  not  known  to  be 
loaded,  which  is  discharged,  on  account  of  an  unknown  defect, 
is  not  a  voluntary  exposure  to  unnecessar}^  danger  within  the 
meaning  of  an  accident  policy.2 

A  complaint  on  an  accident  policy  charged  that  the  plaint- 
iff fell  asleep  from  weariness  and  the  motion  of  the  cars,  and 
when  it  was  quite  dark  "and  while  he  was  in  a,  <1<>z<'<1  and  un- 
conscious condition  of  mind,  and  not  knowing  or  realizing 
what  he  was  doing,  involuntarily  arose  from  his  seat  and 
walked  unconsciously  to  the  platform  of  said  car,  and,  with- 
out fault  on  his  part,  fell  therefrom  to  the  ground."'  and  was 
thereby  injured;  and  it  was  held  to  sufficiently  show  that  the 
injuries  were  not  the  result  of  voluntary  exposure  to  unneces- 
sary danger.3 

§  370.  Whether  the  action  of  a  railroad  employe  in  attei 1 1 1  >t  - 
ing  to  board  a  moving  train  is  a  "  voluntary  exposure  to  un- 
necessary danger,"  within  the  meaning  of  an  accident  policy 
precluding  recovery  for  injuries  sustained  by  such  exposure,  is 
a  question  for  the  jury  under  all  the  circumstances  of  the  case.' 
Where  the  insured  received  a  fatal  injury  while  in  the  dis- 
charge of  his  regular  duties  as  yard  switchman  or  brakeman 
of  a  railway  company,  a  recovery  can  not  be  defeated  on  the 
ground  <>t'  voluntary  exposure  to  danger,  when  the  accident 
was  one  contemplated  by  the  parties  to  the  insurance."     Where 

1  Burkhard  v.  Ins.  Co.,  102  Pa.  St.  4  Gotten  v.  Fidelity  &  (  fcsualty  (  .... 

202:  48Am.  I^.j..  jor>:  Duncan  v.  As-  41  Fed.  Rep.  506. 

sociation,  13  N.  Y.  Supp.  020;  Terre  "National  Benefit  Ass'n v.  Jackson, 

Haute,  etc.,  R.  R.  Co.  v.  Buck,  96  114  III.  :>:'»:::  Pacific  Mutual  v.  Snow- 

Ind.  340.  den,  58Fed.  Rep.  342;  Wilson  v.   \>- 

-  Miller  v.  Am.  Ace.  Company,  92  sociation.    53   Minn.  470;    55  X.   W. 

Tenn.  167:  21  S.  W.  Rep.  39.  Rep.  020. 

8  Scheiderer  v.  Ins.  Co.,  56  Wis.  13; 
46  Am.  Rep.  618. 


714:  ACCIDENT    INSURANCE. 

the  business  of  the  insured  was  known  to  the  company,  and 
he  injured  his  spine  by  lifting  a  heavy  burden  in  the  course  of 
such  business,  the  company  will  not  be  heard  to  assert  that  the 
injury  was  occasioned  by  exposure  to  unnecessary  risk.1  The 
lifting  or  over-exertion,  to  take  the  case  out  of  the  contract, 
must  be  a  voluntary  and  unnecessary  act  of  the  insured;  one 
from  which  injury  might  reasonably  be  anticipated,  and  which 
might,  in  the  exercise  of  reasonable  care,  have  been  avoided. 
An  effort  to  lift,  put  forth  in  an  emergency  of  danger,  as  for 
instance,  in  the  effort  to  save  one's  self  from  being  crushed  by 
a  descending  weight,  is  not  within  the  exception  of  the  con- 
tract.2 It  is  not  an  obvious  risk  or  a  voluntary  exposure  to 
unnecessary  danger,  within  the  meaning  of  a  policy,  for  one 
who  can  swim  to  bathe  in  deep  water.3  It  is  not  a  voluntary 
exposure  to  obvious  risk  for  an  insured  who  is  subject  to  faint- 
ings  and  "  swimmings  in  the  head,"  to  go  driving  in  a  carriage 
with  another  person.4 

§  371.  It  is  not  negligence^;'  se for  one  to  voluntarily  risk 
his  own  safety  or  life  in  attempting  to  rescue  another  from 
impending  danger.  The  question  whether  one  so  acting  should 
be  charged  with  contributory  negligence  in  an  action  brought 
on  an  accident  policy  for  injuries  received  or  death  incurred  in 
attempting  the  rescue,  is  one  of  mixed  law  and  fact,  and  should 
be  submitted  to  the  jury  uoon  the  evidence,  with  proper  in- 
structions from  the  court.  While  a  recovery  may  not  be  had 
where  one  rashly  and  unnecessarily  exposes  himself  to  danger, 
yet,  where  another  is  in  great  and  imminent  danger,  one  who 
attempts  a  rescue  may  be  warranted  by  surrounding  circum- 
stances in  exposing  his  limbs  or  life  to  a  very  high  degree  of 
danger,  and  in  such  cases  he  should  not  be  charged  with  the 
consequences  of  errors  of  judgment  resulting  from  the  excite- 
ment and  confusion  of  the  moment.  In  such  cases,  if  the  res- 
cuer does  not  rashly  and  unnecessarily  expose  himself  to  dan- 
ger, and  is  injured  or  killed,  the  company  is  liable.6  Injuries 
received  while  attempting  to  rescue  persons  from  supposed 

1  Martin  v.  Ins.  Co.,  1  Foster  &  Fin.  4  Shilling  v.    Ins.    Co.,  1  Foster  & 
505.  Fin.  116;  see  §  391. 

2  Reynolds  v.  Association,  17  N.  Y.  6  Pennsylvania  Co.  v.  Langendorff, 
St.  Rep't'r,  337.  48   Ohio   316;  28   N.    East.    Rep.  173; 

ySee§  392.  Linnehan  v.  Sampson,  126  Mass.  506; 


ACCIDENT    INSURANCE.  715 

danger  are  not  within  the  exception  of  an  accident  policy 
that  the  insurance  "shall  not  extend  or  cover  voluntary 
exposure  to  unnecessary  danger."  '  It  is  the  duty  of  every  per- 
son to  aid  in  the  rescue  of  others  from  perils  and  danger;  and 
where  an  insured  went  to  the  rescue  of  a  shipwrecked  crew, 
and  was  drowned,  it  was  held  that  his  death  was  not  "  directly 
or  indirectly  in  consequence  of  any  voluntary  exposure  to  any 
unnecessary  danger,"  there  being  no  evidence  that  in  attempt- 
ing to  rescue  the  crew  he  exposed  himself  to  any  more  danger 
than  was  necessary  in  the  undertaking.2  In  an  action  on  an  ac- 
cident policy  it  appeared  that  after  deceased  had  crossed  the  rail- 
road track  he  met  two  men  going  toward  it,  who  were  slightly  in- 
toxicated, and  warned  them  to  look  out  for  an  approaching  train. 
The  men  crossed  the  track,  and  passed  on,  deceased  going  in  an 
opposite  direction.  Deceased  must  have  afterward  returned, 
for  the  engineer  of  the  train,  which  was  running  about  four 
miles  an  hour,  testified  that  when  he  first  saw  him  he  was 
standing  by  the  track,  and  that,  when  the  engine  was  about 
twenty-five  feet  from  the  crossing,  he  stepped  upon  the  track, 
and  squatted  down,  so  that  he  was  struck  by  the  engine  and 
killed.  It  was  held  that  the  court  should  have  dismissed 
the  suit  on  the  ground  that  the  death  of  the  deceased  resulted 
from  "  voluntary  exposure  to  unnecessary  danger,"  within  a 
clause  of  the  policy  precluding  a  recovery  in  such  case,  and  a 
submission  of  the  question  to  the  jury  on  the  theory  that 
deceased  was  following  the  two  men  to  save  them  from  pos- 
sible injury  was  unwarranted.3 

si  :>72.  A  policy  contained,  among  others,  the  following 
clause:  "This  insurance  does  not  cover  disappearances,  nor  in- 
juries of  which  there  is  no  visible  mark  on  body,  nor  accident. 
nor  death  or  disability  resulting  wholly  or  partly,  directly  or 
indirectly,  from  any  of  the  following  causes,  or  while  so  en- 

Donahoe  v.  Railway  Co. ,  83  Mo.  ."".(JO;  'Tucker  v.  Life  Co.,  1  X.  V.  Supp. 

Beach,  Contributory  Negligence,   p.  505;  50  Hun  50;   121  .V  Y.  718;  24  X. 

45,  §  15;  Wharton,  Negligence,  ?'  814;  East.  Rep.   L103. 

Pierce,  K.  R.  839;  Carroll  v. Railroad  "Williams  v.  Association,  188 N.  Y. 

Co.,  14   Minn.    .".7;    Pennsylvania    Co.    866;  :il   X.   East.  Rep,  822;    Finch  and 

v.  Roney,  s'-»  End,  458;  ( lottrill  v.  Rail-   Maynard,  JJ.,  dissenting;    reversis 

way  Co.,  47  Wis.  634;  3  N.  W.   Rep.    14  X.  Y.  Hupp.  728. 

376. 

1  Williams  v.  Ass'n,  14  N.  Y.  Supp. 
728. 


716  ACCIDENT    INSURANCE. 

gaged  or  affected.  *  *  "  Voluntary  exposure  to  unnecessary 
danger."  The  woman,  from  whose  room  deceased  attempted 
to  get  away  at  the  time  he  was  killed,  testified  that  he  came 
to  her  room  about  half-past  five  o'clock  in  the  evening;  that  a 
few  minutes  afterward  policemen  came  to  her  room,  ham- 
mered at  the  door  with  their  clubs,  and  demanded  admittance, 
which  she  refused;  that  deceased  went  into  the  halhvay  twice 
to  get  down  by  the  stairs,  then  returned  and  prepared  to  go 
out  of  the  front  window;  that  he  took  a  piece  of  selvage  about 
six  inches  wide,  which  was  lying  on  the  floor,  torn  from  bed- 
ticking  cloth.  He  tried  the  strength  of  it  over  his  knee,  with 
both  hands,  and  then  under  his  foot,  and  said  he  knew  it  would 
hold  him.  He  then  tied  it  to  the  leg  of  a  sewing  machine  sit- 
ting near  the  window,  and,  holding  to  the  strip,  started  out  of 
the  window  to  let  himself  down  to  the  brick  sidewalk  about 
fifteen  feet  below.  Persons  out  in  the  street  stated  that  they 
saw  deceased  come  out  of  the  window,  and  let  himself  down  a 
foot  or  two,  when  the  strip  of  bed-ticking  broke,  and  he  fell, 
striking  his  feet  against  an  iron  circle  which  projected  from 
the  store  door  beneath  him.  This  turned  him  over,  so  that  he 
struck  the  walk  on  his  head,  and  received  such  injury  as  caused 
his  death.  The  court  said :  "  The  bare  statement  of  the  man- 
ner in  which  deceased  came  to  his  death,  brings  it,  we  think, 
clearly  within  the  clause  of  the  policy  of  '  voluntary  exposure 
to  unnecessary  danger,'  and  fully  justified  the  trial  court  in 
taking  the  case  from  the  jury,  and  directing  them  to  find  for 
appellee."  ' 

A  policy  provided  that  the  insurance  should  not  extend  to 
injuries  caused  by  certain  acts  of  the  insured,  "  or  generally  by 
his  willfully  exposing  himself  to  any  unnecessary  danger  or 
peril."  The  insured  accosted  a  woman  in  the  street,  persisted 
in  doing  so  in  the  face  of  remonstrances,  was  knocked  down 
by  the  man  in  whose  company  she  was  at  the  time,  and  re- 
ceived injuries  from  which  he  died.  Lord  Coleridge  said  :  "  I 
can  not  bring  my  mind  to  think  that  any  such  thing  was 
pointed  at  as  a  man  either  in  his  senses  or  out  of  his  senses, 
either  morally  or  immorally  going  up  and  speaking  to  a  woman, 
and  in  the  course  of  speaking  to  a  woman  getting  knocked  down 

'  Shaffer  v.  Travelers' Ins.  Co.  (111.),  22  N.  East.  Rep.  581;  S.  C,  31  111. 
App.  112. 


ACCIDENT    INSURANCE.  717 

by  somebody  who  thought  he  had  a  right  to  protect  her.  I 
can  not  think  that  is  willful  exposure  to  unnecessary  danger  or 
peril,  coming  after  this  proviso :  '  by  entering  or  leaving  a  car- 
riage whilst  a  train  is  in  motion,  or  otherwise  by  his  acting  in 
violation  of  a  railway  company's  by-laws,  or  riding  races  or 
steeple-chases,'  and  so  on.  That  is  the  conclusion  I  put  upon 
it;  and  as  to  that  point  in  the  case  lam  strongly  in  favor  of  the 
plaintiff."  Denman,  J.,  said  :  "I  am  not  prepared  to  go  so  far 
as  to  say  that  the  rule  of  ejusdem  generis  would  necessarily  ap- 
ply so  as  to  exclude  such  a  peril  or  such  a  danger  as  that  to 
which  it  is  alleged  that  the  deceased  man  exposed  himself  in 
this  case.  As  at  present  advised,  and  without  expressing  any 
very  strong  opinion  about  it,  it  appears  to  me  that  it  was  a 
matter  with  regard  to  which  there  was  evidence  for  the  jury."  ' 
§  373.  External,  violent  and  accidental  means — Exter- 
nal and  material  cause. — When  a  contract  insures  against 
injuries  or  death  caused  by  external,  violent  and  accidental 
means,  it  is  not  sufficient  that  an  injury  or  death  was  caused 
by  any  one  of  these  means,  but  it  must  have  been  caused  by 
all  of  them  combined,  to  bring  it  within  the  contract.  The 
burden  is  on  the  plaintiff  to  show  a  deatli  or  injury  by  such 
means.2  Where  an  insured,  in  diving,  after  the  manner  of 
bathers  in  deep  water,  by  a  slight  accidental  turn  of  the  body, 
brings  his  ear  in  contact  with  the  water,  so  that  it  is  ruptured, 
the  injury  is  the  result  of  violent  external  causes;  but  if  he 
dives,  meets  with  no  interference  or  obstruction  in  entering 
or  in  moving  under  the  water,  has  no  unusual  circumstance 
happen  to  him  to  occasion  injury,  but  feels  a  pain  in  his  ear 
when  he  comes  out  of  the  water,  it  can  not  be  said  that  the 
pain  comes  from  accidental  causes.3  In  a  suit  on  an  accident 
policy,  where  the  death  was  alleged  to  have  occurred  by  reason 
of  the  rupture  of  a  blood  vessel,  sustained  while  exercising 
with  Indian  clubs,  it  was  held  that,  if  the  deceased  volun- 
tarily took  in  his  hands  the  clubs  for  exercise,  and  used  them 
for  such  exercise  in  the  way  ami  precisely  as  he  intended  to 
do,  and  without  anything  occurring  to  interfere  with  his  in- 

1  Mairv.  Assurance  Co.,  37  L.  T.  R.  127  U.  S.  661;    17  Ins.  L.  J.  585;    8 

(N.  S.)356.     The  case  was  reversed  Sup.  Ct.  Rep.  13G0. 

on  another  point.  3Rod<y  v.  Ins.  Co.,  3   New  Mexico 

•Travelers'   Ins.  Co.  v.  McConkey,  316;  9  Pac.  Rep.  348. 


718  ACCIDENT    INSURANCE. 

tended  and  usual  movements  in  such  exercise,  that  is,  if  he 
voluntarily  used  them  in  the  ordinary  way  for  taking  such 
exercise,  without  the  occurrence  of  any  unusual  circumstance 
interrupting  or  interfering  with  such  use,  or  causing  any  un- 
foreseen, accidental,  or  involuntary  movement  of  the  body, 
and  in  such  use  of  the  clubs  there  occurred  the  rupture  of  a 
blood  vessel  and  consequent  injury,  it  could  not  then  be  said, 
that  the  means  through  which  the  injury  was  effected,  were 
accidental;  but,  if  while  engaged  in  such  exercise  there  oc- 
curred any  unforeseen,  accidental  or  involuntary  movement  of 
the  body  of  the  deceased,  which  in  connection  with  the  use  of 
the  clubs,  brought  about  the  injury,  or  if  there  occurred  any 
unforeseen  or  any  unexpected  circumstance  which  interfered 
with  or  obstructed  the  usual  course  of  such  exercise,  and  there 
was  thereby  produced  an  involuntary  movement,  strain  or 
wrenching,  by  means  of  which  the  injury  was  occasioned,  that 
would  be  an  accident  within  the  spirit  of  the  policy,  that  is, 
the  means  by  which  the  injury  was  affected  would,  in  such 
case,  be  external,  violent  and  accidental.1 

A  policy  provided  that  if  the  insured  should  sustain  acci- 
dental bodily  injuries  through  violent  and  external  means,  he 
should  be  paid  a  certain  indemnity.  He  took  a  train  to  go  to 
a  certain  depot  to  meet  an  acquaintance,  but  finding  that  he 
was  probably  mistaken  as  to  the  depot  at  which  the  meeting 
was  to  take  place,  jumped  off  the  car,  felt  no  shock,  and  ran 
and  walked  briskly  to  the  other  depot.  Afterward,  on  the 
same  day,  he  felt  pain  about  one  knee,  called  on  a  physician, 
who  found  a  partially  developed  rupture  on  his  right  loin,  and 
then  for  the  first  time  referred  his  pain  and  injury  to  his  jump- 
ing off  the  cars  or  running  to  the  depot.  In  speaking  of  these 
facts  it  was  said :  "  There  was  no  accident,  strictly  speaking, 
in  the  means  through  which  the  bodily  injury  was  effected. 
It  would  not  help  the  matter  to  call  the  injury  itself,  that  is, 
the  rupture,  an  accident.  That  was  the  result  and  not  the 
means  through  which  it  was  effected.  The  jumping  off  the 
cars  or  the  running  was  the  means  by  which  the  injury  was 
caused.  Both  were  done  by  the  claimant  voluntarily,  in  the 
ordinary  way,  with  no  unforeseen,  accidental,  or  involuntary 
movement  of  the  body  whatever.     There  was  no  stumbling,  or 

1  McCarthy  v.  Ins.  Co.,  8  BisseU  362;  8  Ins.  L.  J.  208. 


ACCIDENT    INSURANCE.  719 

slipping,  or  falling.  There  was  nothing  accidental  in  his 
movements,  any  more  than  there  was  in  his  passing  down  the 
steps  of  his  hotel,  or  in  his  walking  on  the  street,  during  each 
of  which  he  might  have  had  a  stroke  of  apoplexy  or  a  hemor- 
rhage, a  rupture  of  a  blood-vessel  in  the  head,  or  the  lungs. 
True,  in  jumping  from  the  cars  and  running,  there  was  more 
violence,  or  properly  speaking,  more  force ;  but  there  was  no 
more  accident  than  in  any  ordinary  movements  of  the  human 
body.  How,  then,  admitting  the  rupture  to  have  been  effected 
by  jumping  from  the  cars  or  by  running  to  see  if  they  were 
coming,  can  it  be  said  that  it  was  caused  by  accidental  as  well 
as  violent  means  ?  *  *  The  injury  which  he  received  was 
in  no  sense  the  result  of  accident.  He  jumped  from  the  car 
with  his  eyes  open,  for  his  own  convenience,  and  not  from  any 
perilous  necessity.  He  encountered  no  obstacle  in  doing  so. 
He  alighted  erect  on  the  ground  just  as  he  intended  to  do. 
So  in  running.  He  ran  from  no  peril  or  necessity,  but  for  his 
own  convenience,  voluntarily,  and  from  all  that  appears,  with- 
out stumbling,  slipping  or  falling.  In  both  cases  he  accom- 
plished just  what  he  intended  to  do,  in  the  way  he  intended 
to,  and  in  the  free  exercise  of  his  choice.  'No  accident  of  any 
kind  interfered  with  his  movements,  or  for  an  instant  relaxed 
his  self-control.  All  that  he  claims  is  that,  some  hours  after, 
it  was  discovered  a  muscle  in  the  walls  of  the  abdomen  had 
given  way  under  the  strain  to  which  he  had  voluntarily  put  it 
under  circumstances  free  from  all  peril  or'  necessity.  Assum- 
ing that  this  rupture  was  caused  either  by  his  jumping,  or  run- 
ning, or  by  both,  does  not  help  the  matter  unless  we  call  run- 
ning and  jumping  accidents.  I.  therefore,  am  of  opinion 
that  the  alleged  injury  did  not  result  from  an  accident,  within 
the  meaning  of  the  contract."  '  Where,  by  its  terms,  a  policy  is 
payable  incase  of  death  "received  through  external,  violent 
and  accidental  means/'  the  intent  is  that  the  means,  or  that 
which  caused  the  injury,  should  be  external,  and  not  thai  the 
injury  must  be  external.  Where  the  assured  chokes  to  death 
while  attempting  to  swallow  a  piece  of  beefsteak  which  acci- 
dentally Lodges  in  his  windpipe,  death  results  from  external, 
violent  and  accidental  means  and  is  within  the  terms  of  the 
policy.3 

•Southard  v.  Assurance   Co.,    34       'American  Accident  Co.  v.  Reigart 
Conn.  574,  |  K  v.  i.  23  S.  W.  Rep.  191. 


720  ACCIDENT   INSURANCE. 

§  374.  Some  courts  have  dissented  from  the  doctrine  laid 
down  in  the  cases  just  cited,1  and  have  laid  down  a  broader 
rule  based  upon  the  definition  that  an  accident  is  an  unusual 
and  unexpected  result  of  a  usual  act.  A  certificate  insured  a 
member  against  "bodily  injuries  effected  through  external, 
violent  and  accidental  means."  He  jumped  from  a  platform 
four  or  five  feet  high  to  the  ground,  soon  afterward  appeared 
ill,  vomited,  could  retain  nothing  on  his  stomach,  passed  noth- 
ing but  decomposed  blood  and  mucus,  and  died  nine  days  after- 
ward. It  appeared  that  the  jar  from  the  jump  produced  a 
stricture  of  the  duodenum,  from  the  effects  of  which  death  en- 
sued. It  was  held  that  the  jury  were  at  liberty  to  find  that  the 
injury  resulted  from  an  accident.2  While  an  insured  was  pitch- 
ing hay,  the  handle  of  his  pitchfork  slipped  through  his  hands 
and  strained  him  in  such  a  manner  that  peritoneal  inflamma- 
tion was  produced.  Upon  these  facts  the  court  said  :  "  It  is  said, 
that  if  the  assured  strained  himself  while  unloading  hay,  it  was 
not  an  accident  insured  against  within  the  meaning  of  the  policy. 
Why  not,  if  he  accidentally  strained  himself,  as  is  averred  in 
the  plaintiff's  affidavit?  Why  is  not  death  resulting  from  an 
accidental  strain  as  much  within  the  meaning  of  the  policy  as 
death  produced  by  any  other  accidental  cause  ?  If  the  injury  be 
accidental,  and  the  result  of  it  death,  what  matters  it  whether 
the  injury  is  caused  by  a  strain  or  blow  ?  *  *  And  there 
is  no  more  reason  for  regarding  an  injury  of  the  abdominal 
muscles,  caused  by  an  unexpected  blow,  an  accident  than  an 
injury  caused  by  a  casual  and  unlooked-for  strain.  If  the 
death  of  the  assured  resulted  from  an  accidental  strain,  then  it 
was  not  '  caused  by  natural  disease.'  And  if  it  resulted  from 
any  accidental  strain,  it  does  not  follow  that  it  was  caused  by 
1  unreasonable  imprudence.'  "  3 

Where  a  policy  excepts  injuries  caused  by  "  lifting  or  over- 
exertion" by  the  assured,  the  lifting  or  over-exertion  must  be 
a  voluntary  and  unnecessary  act,  and  the  effort  to  lift,  or  over- 
exertion put  forth  in  an  emergency  of  danger,  is  not  within 

1  Rodey  v.    Ins.    Co.,  supra;    Mc-  Burroughs,  69  Pa.  St.  43,  and  dissent- 

Carthy  v.  Ins.  Co.,  supra;  Southard  ing  from  Southard  v.  Assurance  Co., 

v.  Assurance  Co.,  supra.  supra. 

s  U.  S.    Association   v.  Barry,    131  3  N.  Am.  L.  &  Ace.  Ins.  Co.  v.  Bur- 

U.  S.  100;  citing  Martin  v.  Ins.  Co.,  1  roughs,  69  Pa.  St.  43. 
Foster  &   Fin.  505;  N.  A.  Ins.  Co.  v. 


ACCIDENT    INSURANCE.  ~'2i 

the  exception.  A  policy  insured  against  death  resulting  from 
"bodily  injuries  effected  through  external,  violent  and  acci- 
dental means,"  l>ut  stipulated  that  no  claim  should  be  made 
where  the  death  had  been  caused  by  lifting1,  or  by  over-exertion. 

The  insured  was  ;i  bridge  builder,  and  the  evidence  tended  to 
show  that  while  raising  the  bents  of  a  bridge,  t  he  fool  of  one  of 
the  posts  slipped,  and  an  unexpected  weight  was  thrown  upon 
the  pike-poles  in  the  hands  of  the  men.  and  that  the  insured 
a\;is  either  struck  by  the  *'nd  of  his  pole,  or  subjected  to  a  strain 
(if  great  severity,  and  that  he  was  at  once  disabled  ami  soon 
afterward  died.  It  was  held  that  his  death  was  effected  through 
external,  violent  and  accidental  means,  within  the  meaning  and 
intent  of  the  contract  of  insurance,  and  that  an  effort  to  lift  or 
an  over-exertion  put  forth  in  an  emergency  of  danger  as,  for 
instance,  in  the  effort  to  save  one's  self  from  being  crushed  by 
a  descending  weight,  was  not  within  the  exception  of  the 
policy.1  A  policy  of  insurance  extended  to  any  bodily  injury 
arising-  from  any  accident  or  violence,." provided  that  the  in- 
jury should  be  occasioned  by  any  external  or  material  cause 
operating-  on  the  person  of  the  insured."'  The  company  was 
held  liable  for  an  injury  to  the  spine  of  the  insured,  caused  by 
lifting  a  heavy  burden  in  the  course  of  his  business."  While 
an  insured  was  driving  upon  a  public  street,  his  horse  became 
frightened  at  an  unsightly  object,  ran  away  without  upsetting 
the  carriage  or  coming  in  contact  with  anything,  and  was  at 
length  brought  under  control.  He  and  his  children  were 
apparently  greatly  endangered  at  the  time,  and  he  suffered  so 
severely,  eit  her  from  fright  or  strain  caused  by  his  physical 
exertion  in  restraining  the  horse,  that  he  died  within  an  hom- 
ager the  accident.  The  court  held  that  his  death  ensued  from 
bodily  injuries  effected  through  external,  violent  and  accidental 
means." 

It  has  been  held  that  death  by  the  taking  of  poison  is  not 
effected  through  such  means,  within  the  meaning  of  a  policy, 
for,  tl gh  the  action  of  the  poison  may  be  violently  destruct- 
ive to  life,  it  can  not  fairly  be  said    that  there    is   any  violence 

1  Reynolds  v.  Accident  Association,       'McGlinchey  v.   Fidelity  and  Cas- 
1  N.  V.  Sup.  788.  ualty  Co.,  80  Me.   251;  14  Atl.  Rep. 

1  Martin  v.   Ins.    Co.,    1   Foster  &    13. 
Fin.  505. 

46 


722  ACCIDENT    INSURANCE. 

in  the  act  of  taking  a  dose  of  poison.1  But  the  reasoning 
upon  which  this  rule  is  founded  has  been  declared  to  be  too 
reiined  and  technical  to  have  been  in  the  minds  of  the  parties 
to  the  contract,  and  the  rule  itself  has  been  disapproved  as  too 
strict,  and  as  against  the  principles  governing  the  construction 
of  insurance  policies.2 

§  375.  An  insured  who  was  subject  to  epileptic , fits,  was 
found  dead  in  a  plunge  bath  in  almost  a  standing  position. 
There  was  an  abrasion  between  his  eyes,  and  a  bruise  on  one 
side  of  his  head.  His  physician  testified  that,  on  account  of 
his  peculiar  condition  of  health  at  the  time,  his  hot  bath  prob- 
ably brought  on  an  epileptic  attack,  and  that  the  blows  which 
caused  the  abrasion  and  bruise  were  not  sufficient  to  have 
caused  his  death.  It  was  held  upon  this  evidence  that  the 
deceased  came  to  his  death  through  other  causes  than  "ex- 
ternal, violent  and  accidental  means,"  within  the  meaning  of 
his  policy.  The  court  said :  "When  it  is  considered  that  the 
evidence  shows  that  the  abrasion  and  bruise  were  but  slight, 
and  that  deceased,  when  found,  was  in  almost  a  standing  po- 
sition, with  his  right  hand  firmly  grasping  the  supply-pipe,  it 
is  impossible  to  believe  that  his  death  was  caused  by  a  fall  or 
a  blow.  In  view  of  all  the  facts  and  circumstances  of  the 
case,  considering  the  condition  of  the  deceased  at  the  time  of 
and  just  previous  to  his  death,  the  probable  effect  of  the  heat 
of  the  bath  upon  one  in  his  condition,  his  position  when  found, 
and  the  condition  of  his  body  after  death,  it  seems  to  me  to 
be  clear  that  he  came  to  his  death  through  other  causes  than 
'  external,  violent  and  accidental  means,  within  the  intent  and 
meaning '  of  the  policy  in  suit,  and  I  must  so  find."  3 

A  mariner,  about  to  sail  on  a  voyage,  was  insured  "  in  the  event 
of  his  sustaining  any  personal  injury  during  said  intended  voy- 

'  Pollock  v.  Accident  Association,  2  Paul  v.  Ins.  Co.,  112  N.  Y.  472; 
102  Pa.  St.  230;  Bayless  v.  Ins.  Co.,  20  N.  East.  Rep.  347;  affirming  45 
14  Blatchford  143;  Hill  v.  Ins.  Co.,  Hun  313,  and  overruling  Hill  v.  Ins. 
22  Hun  187,  Follett,  J.,  dissenting.  Co.,  22  Hun  187;  Healey  v.  Associa- 
But  the  case  of  Hill  v.  Ins.  Co.,  supra,  tion,  133  111.  556;  25  N.  East.  Rep. 
was  disapproved  on  this  point  in  52;  McGlinchey  v.  Casualty  Co.,  80 
Paul  v.  Ins.  Co.,  45  Hun  313,  and  the  Me.  251;  14  Atl.  Rep.  13;  Pickett  v. 
opinion  of  Follett,  J. ,  was  commended  Ins.  Co.,  144  Pa.  St.  79;  22  Atl.  Rep. 
as  declaring  the  true  and  more  lib-   871 ;  §  393. 

eral  rule.  See  also  Paul  v.  Ins.  Co.,  3Tennantv.  Ins.  Co.,  31  Fed.  Rep. 
112  N.  Y.  472;  20  N.  East.  Rep.  347.      322. 


ACCIDENT    INSURANCE.  723 

age,  from  or  by  reason  or  in  consequence  of  any  accident 
whatsoever."  He  sailed  to  India,  and,  while  on  board  his 
ship,  was  sunstruck  and  died.  The  court  held  that  the  com- 
pany was  not  liable,  and  said  :  "  The  disease  called  sunstroke, 
although  the  name  would  at  first  seem  to  imply  something  of 
external  violence,  is,  so  far  as  we  are  informed,  an  inflamma- 
tory disease  of  the  brain,  brought  on  by  exposure  to  the  too 
intense  heat  of  the  sun's  rays.  It  is  a  disease  to  which  per- 
sons exposing  themselves  to  the  sun  in  a  tropical  climate  are 
more  or  less  liable,  just  as  persons  exposed  to  the  other  natural 
causes  to  which  we  have  referred  '(cold,  damp,  the  vicissi- 
tudes of  climate  or  atmospheric  influences)'  are  liable  to  dis- 
astrous consequences  therefrom.  The  deceased,  in  the  dis- 
charge of  his  ordinary  duties  about  his  ship,  became  thus 
affected  and  so  died.  We  think,  for  the  reasons  we  have  o-iven 
that  his  death  must  be  considered  as  having  arisen  from  a 
'natural  cause 'and  not  from  'accident,'  within  the  meaning 
of  this  policy."  l 

In  an  action  on  an  accident  policy,  it  was  shown  that  de- 
ceased had  had  a  fall,  of  the  effects  of  which  he  complained 
for  several  days,  and  then  fell  sick.  From  this  sickness  he 
never  recovered  and  throughout  its  continuance  he  complained 
of  the  hurt,  and  bore  a  bruise.  His  attending  physicians  testi- 
fied that  he  died  of  typhoid  fever,  and  that  this  disease  was 
never  produced  by  a  bruise.  His  nurse,  a  competent  one,  of 
long  experience,  testified  that  he  did  not  have  typhoid  fever 

1  Sinclair  v.  Ins.  Co.,  107  Eng.  Com.  dicta  therein,  do  not  apply  to  death 
L.  Repts. ;  3  El.  &  El.  470;  Dozier  v.  from  atmospheric  causes  where  no 
Casualty  Co.,  46  Fed.  Rep.  446.  Of  specific  disease  is  produced:  and  the 
death  by  freezing  it  was  said  by  a  argument  that  death  in  Dr.  Bean's 
learned  writer  in  7  Am.  Law.  Rev.  case  (freezing  to  death  on  Mount 
on  pg.  592:  "That  freezing  is  an  acci-  Blanc)  was  qo1  an  injury  of  which 
dent,  where  it  occurs  without  want  there  was  any  externa]  and  visible 
of  due  care  and  needless  exposure  by  signj  is  answered  by  denying  the 
the  insured,  would  seem  to  follow  fact  The  frozen  body  was  itself  a 
from  the  analogy  of  drowning,  or  of  visible  sign  of  the  injury.  Frost  in 
suffocation  by  gases  in  a  coal  mine  the  corporeal  tissues  and  ice  in  the 
or  carbonic  acid  in  a  chamber.  The  arteries  are  as  visible  signs  of  injury 
effect  of  exposure  to  the  heat  of  the  as  extravasated  blood  around  the  spot 
sun  is  hardly  analogous.  Sunstroke  where  a  blow  b struck.  We  have  no 
is  a  specific  disease, and  is  as  positive  doubt  how  this  point  will  be  decided 
an  affection  oi  the  brain  as  apoplexy  whenever  it  receives  adjudication." 
or  paralysis.    Sinclair's  case  and  the 


724  ACCIDENT    INSURANCE. 

and  it  was  admitted  that  bruises  might  produce  other  forms  of 
fever.  It  was  held  that  the  evidence  was  sufficient  to  support 
a  verdict  that  the  death  of  deceased  was  the  result  of  acci- 
dent.1 

§  376.  In  Eipley  v.  Assurance  Co.2  the  opinion  was  ex- 
pressed that  a  person  waylaid  and  killed  by  robbers  had  died 
from  violent  and  accidental  means.  "  Perhaps,  in  a  strict 
sense,"  said  the  court,  "  any  event  which  is  brought  about  by 
design  of  any  person  is  not  an  accident,  because  that  which 
has  accomplished  the  intention  and  design,  and  is  expected,  is 
a  foreseen  and  foreknown  result,  and  therefore  not  strictly 
accidental.  Yet  I  am  persuaded  this  contract  should  not  be 
interpreted  so  as  thus  to  limit  its  meaning,  for  the  event  took 
place  unexpectedly  and  without  design  on  Ripley's  part.  It 
was  to  him  a  casualty,  and,  in  the  more  popular  and  common 
acceptation  of  the  word,  '  accident,'  if  not  in  its  precise  mean- 
ing, includes  any  event  which  takes'place  without  the  foresight 
or  expectation  of  the  person  acted  upon  or  affected  by  the  event. 
A  man  goes  to  a  livery  for  a  horse  and  carriage,  and  is  given 
one.  But  the  horse  is  sure  to  run  away  if  he  is  driven.  This 
the  liveryman  knows,  the  hirer  does  not.  The  horse  is  taken, 
driven,  and  runs  away,  injuring  the  hirer.  ]STow  the  event 
was  foreseen  and  expected  by  the  owner  of  the  horse,  but  un- 
foreseen and  unexpected  to  the  hirer,  and,  therefore,  it  seems 
to  me  it  was  accidental  to  him,  and  within  view  of  this  policy 
would  be  regarded  an  accident.  A  man  throws  a  train  of  cars 
off  the  track,  and  one  or  more  passengers  are  injured  or 
killed.  To  those  in  the  cars  it  •  is  an  accident,  a  casualty, 
while  in  the  exact  sense %  murder  is  not  an  accident.  I 
think  in  construing  a  policy  of  insurance  against  accident, 
issued  to  all  sorts  of  people,  a  majority  of  whom  do  not,  as  the 
company  well  know,  nicely  weigh  the  meaning  of  words  and 
tei;ms  used  in  it,  courts  are  called  upon  to  interpret  the  con- 
tract as  a  large  class  not  versed  in  lexicology  are  sure  to  re- 
gard its  terms  and  scope.     That  which  occurs  to  them  unex- 

1  Standard  Life  v.  Thomas  (Ky.).  Pac.  Rep.  383;  Eailroad  Co.  v.  Sut- 
17  S.  W.  Rep.  275.  As  to  the  ad-  ton,  42  111.  438;  State  v.  Davidson,  30 
mission  in   evidence  of    statements    Vt.  377. 

of  the  assured  made  to  his  physician       a  2  Big.  L.  &  Ace.  Cases,    738;    1 
while  treating  him,    see    Equitable   Dillon  403. 
Mutual  v.  McCluskey,  1  Colo.  473;  29 


ACCIDENT    INSURANCE.  725 

pectedly,  is  by  them  called  accident.  The  company  fix  the 
terms  of  this  contract,  and  are  to  be  held,  in  the  absence  of 
plain  and  unequivocal  exceptions  and  provisos,  to  intend  what, 
in  popular  acceptation,  the  insured  party  is  likely  to  understand 
by  its  terms.  The  question  is  not,  perhaps,  entirely  free  from 
doubt,  I  find  no  case  in  which  the  exact  point  has  been  de- 
cid  'I."  '  The  word  "accident  "  in  an  insurance  policy  will  be 
given  its  ordinary  and  usual  signification,  as  being  an  event 
which  takes  place  without  one's  foresight  or  expectation,  and 
it  may  include  an  injury  received  by  one  in  a  common  law 
affray,  where  no  fault  on  his  part  is  shown." 

In  Ilutclicraft's  Ex'r  v.  Travelers'  Ins.  Co.,'  it  was  said  : 
••Accidents  are  of  two  kinds;  first,  those  that  befall  a  person 
without  any^  human  agency,  as  the  killing  of  a  person  by 
lightning.  Here  the  elemental  )  roperties  of  lightning  and  its 
flash  are  not  caused  or  contracted  by  human  agency,  but  the 
tint  that  the  person  Avas  struck  by  unintentionally  placing 
himself  within  its  range  is,  as  to  him,  an  accident;  second,  those 
that  are  the  result  of  human  agency.  The  latter  are  divided 
as  follows :  First,  that  which  happens  to  a  person  by  his  own 
agency,  as  if  he  is  walking  or  running  and  accidentally  falls 
and  hurts  himself.  Here  he  falls  by  reason  of  his  asrencv  in 
walking  or  running,  but  he  did  not  intend  to  fall;  he  did  not 
foresee  that  he  would  fall  in  time  to  avoid  it;  the  fall  was. 
therefore,  accidental.  Second,  that  which  befalls  a  person  by 
the  agency  of  another  person  without  the  concurrence  of  the 
l,i  tier's  will,  as  where  one  standing  on  a  scaffold  anintentionallv 
Lets  a  brick  fall  from  his  hand  and  it  strikes  a  person  below. 
Here  the  dropping  of  the  brick,  as  it  was  not  intended  by  the 
former  and  was  unforeseen  by  the  latter,  is.  in  the  broadest 
sense,  as  accident.  Third,  that  which  a  person  intentionally 
does,  whereby  another  is  unintentionally  injured,  us.  where  one 
intentionally  li  res  a  gun  in  the  air  and  accidentally  shoots  An- 
other person.  Nov  the  ;iet  of  firing  the  gun  was  intentional 
but  the  shooting  of  the  person  was  unintentional;  therefore,  on 

■On  appeal  the  case  was  decided  said  the  court,  "tli.it  because  :t  des- 

on  another  point.     Se<    Riplej  v.  As-  perado  waylays,  assails   and  wounds 

surance  ('<>..  16  Wall.  336;  2  In-.  I.,  a  member  intentionally,  thai  wound- 

J-  588.  ing  is  nut  an  accident  to  the  member. 

Supreme  Council  v.  Garrigus,  104  within  the  laws,  etc.,  of  the  order." 

Ind.  133.     "  It  will  not  do  t<»  say,"  B87Ky.  801. 


726  ACCIDENT    INSURANCE. 

the  part  of  the  person  firing  the  gun,  the  shooting  of  the  other 
would  be  accidental,  though  not  in  as  broad  a  sense  as  in  the 
formei  case,  because  some  part  of  his  act  was  intentional,  but, 
as  to  the  person  shot,  it  was  by  purely  accidental  means. 
Fourth,  so,  also,  as  we  think,  if  one  person  intentionally 
injures  another,  which  was  not  the  result  of  a  re-encounter 
or  the  misconduct  of  the  latter,  but  was  unforeseen  by 
him,  such  injury  as  to  the  latter,  although  intentionally  in- 
flicted by  the  former,  would  be  accidental.  When  the  injury 
is  not  the  result  of  the  misconduct  or  the  participation  of  the 
injured  party,  but  is  unforeseen,  it  is  as  to  him  accidental, 
although  inflicted  intentionally  by  the  other  party.  It  is  con- 
ceded that  in  the  three  instances  first  named  the  injury  would  be 
by  '  accidental  means.'  1ST  or,  doubtless,  will  it  be  denied  that  if 
a  person  were  to  maliciously  fire  his  gun  into  a  crowd  of  per- 
sons for  the  purpose  of  general  mischief,  or  were  to  mali- 
ciously wreck  a  train  of  cars  for  the  purpose  of  injuring  what- 
ever might  be  on  board,  whereby  one  or  more  persons  were 
shot  or  mashed,  that  the  casualty  befalling  these  persons,  as 
far  as  they  were  concerned,  would  fall  within  the  term  of  ac- 
cidental means.  In  other  words,  we  do  not  regard  it  as  essen- 
tial, in  order  to  make  out  a  case  of  injury  by  accidental  means 
so  far  as  the  injured  party  is  concerned,  that  the  party  injur- 
ing him  should  not  have  meant  to  do  so,  for,  if  the  injured 
party  had  no  agency  in  bringing  the  injury  on  himself,  and  to 
him  it  was  unforeseen — a  casualty — it  seems  clear  that  the 
fact  that  the  deed  was  willfully  directed  against  him,  would 
not  militate  against  the  proposition,  that,  as  to  him,  the  injury 
was  brought  on  by  '  accidental  means.'  " 

§  377.  Under  a  policy  stipulating  that  it  only  covers  in- 
juries effected  by  external,  violent,  and  accidental  means,  an 
injury  not  anticipated,  nor  naturally  to  be  expected  by  the 
assured,  though  intentionally  inflicted  by  another,  is  an  acci- 
dental means,  within  the  meaning  of  the  contract,  where  it 
does  not  in  terms  provide  against  a  recovery  if  the  death  was 
caused  by  injury  intentionally  inflicted  by  the  assured  or  any 
other  person.1     Where  the  insured  is  found  dead  with  a  pistol 

1  Accident  Ins.  Co.  v.  Bennett,  90  Rep.  1-360;  Hutehcraft's  Ex'r  v.  Ir.s. 

Tenn.   256;    16  S.  W.  Rep.  723;  clis-  Co.,   87  Ky.    300;  8 .  S.  W.  Rep.  570; 

tinguishing    Travelers'    Ins.    Co.    v.  see    Warner    v.   U.    S.   Association 

McConkey,  127  U.  S.  661;  8  Sup.  Ct.  (Utah),  32  Pac.  Rep.  696. 


ACCIDENT   INSURANCE.  iZi 

bullet  through  his  heart,  it  may  not  be  presumed  from  the 
mere  fact  of  the  death  that  he  was  murdered,  but  such  infer- 
ences and  conclusions  as  to  the  cause  of  his  death  may  be 
drawn  as  the  facts  and  circumstances  will  justify.1  In  an 
action  on  an  accident  policy,  testimony  of  physicians  that 
the  assured  bore  on  his  back  marks  of  extreme  violence,  ap- 
parently recently  inflicted,  and  that  his  injuries  produced  his 
death,  is  prima  fair  evidence  of  death  resulting  from  bodily 
injuries,  "through  external,  violent,  and  accidental  means." 
Unless  such  injuries  were  intentionally  self-inflicted,  or  in- 
tentionally inflicted  by  some  other  person,  the  legal  pre- 
sumption is  that  they  were  accidental.  Xo  presumption  can 
be  indulged  that  the  law  has  been  violated,  as  it  would  have 
been  were  the  injuries  inflicted  by  another.2  There  may  be 
a  prima  facie  case  of  accidental  death,  but  the  burden  of 
proving  accidental  death  is  on  the  plaintiff.3  Where  it  appears 
that  a  violent  death  was  either  the  result  of  accidental  injuries 
or  of  a  suicidal  act  of  the  deceased,  the  presumption  of  law  is 
against  the  latter.4 

j?  37S.  In  Scheiderer  v.  Ins.  Co.,5  it  was  alleged  in  the 
pleading  that  while  the  insured,  who  was  traveling  in  a  rail- 
way car,  "  was  in  a  dozed  and  unconscious  condition  of  mind, 
a  mi  not  knowing  or  realizing  what  he  was  doing,  [he]  involun- 
tarily arose  from  his  seat,  and  walked  unconsciously  to  the 
platform  of  the  car,  and  fell  therefrom  to  the  ground;"  and  it 
was  held  that  this  constituted  a  good  cause  of  action  upon  a 
policy  of  accident  insurance.  In  commenting  upon  this  case, 
Dyer,  J.,  said  : " 

"Since  the  moving  cause  was  the  involuntary  act  of  leaving 

'Travelers1  Ins.  Co.  v.  McConkey,  Rep.  388;   Knickerbocker  Ins. Co.  v. 

137  U.  S.  861.  Jordan,  7  ('in.  Law  Bull.  71;  Travel- 

'Cronkhite  v.   Ins.   Co.,   75  Wis.  ere' Ins.  Co.  v.  McConkey,  127  U.  S. 

116;  43  N.  W.  Rep.  731.  661;    17  In.s.   L.  .J.    585;  8   Sup.   Ct. 

Merrett v.  Accident  Association.  Rep.    1866;   Cronkbite  v.   Travelers' 

68  Mich.  388.  Ins.  Co.,  75  Wis.  118;  48  N.  W.    Rep. 

'Ingersoll  v.    Knights  "f  Golden  731;  Accident  Ins.  Co.  v.  Bennett,  90 

Rule.  17  Fed.  Rep.  272;  Washburn  v.  Tenn.  256;  16  S.  W.  Rep.  728. 

Society,  16  N.  Y.  Supp.  866;  Whit-  •  58  Wis.  L4;  16  N.  W.  Rep.  17;   16 

ladi    v.    Co.,  28   N.  Y.  Supp.   951;  Am.  Rep.  618. 

Wright  v.    Ins.  Co.,  29  Up.  Can.    C.  *  CrandaJJ  v.  Ins.  Co.,  27  Fed.  Rep. 

P.  221;  Mallory  v.  Ins.  Co.,  47  N.  Y.  40. 
52;  Leman  v.   Ins.  Co.  (La.),  15  So. 


728  ACCIDENT   INSURANCE. 

the  seat  and  walking  to  the  platform,  the  case  suggests  the 
inquiry,  if  for  example,  a  person  in  a  fit  of  somnambulism,  or 
in  delirium,  not  knowing  or  realizing  what  he  is  doing,  involun- 
tarily inflicts  injury  upon  himself — that  is  by  means  of  his  own 
hand,  and  death  ensues,  is  not  such  an  injury  as  much  the  result 
of  accident  as  if  in  the  same  circumstances,  the  injury  results 
from  other  external  forces,  such  as  falling  from  the  platform 
of  a  moving  train  ?  "  As  an  answer  to  this  question  the  learned 
judge  held  in  this  case  that  death  from  hanging,  when  the 
insured  was  insane,  was  a  death  effected  through  external, 
accidental  and  violent  means,  within  the  meaning  of  a  policy  of 
accident  insurance  ;  and  on  appeal  this  decision  was  affirmed.1 
§  379.  External  and  visible  sign. — A  clause  providing 
that  the  insurance  "does  not  extend  to  any  bodily  injury  of 
which  there  shall  be  no  external  and  visible  sign  upon  the 
body  of  the  insured,"  does  not  apply  to  fatal  injuries,  but  only 
to  those  not  resulting  in  death.  It  would  be  unjust  to  hold  that 
this  condition  applied  in  cases  of  death,  for  it  would  preclude 
recovery  in  all  instances  where  death  occurred  by  drowning, 
freezing,  poisoning,  suffocation — means  of  death  leaving  no 
outward  mark— and  also  where  the  insured  has  been  killed 
and  his  body  is  missing.  And  where  this  clause  is  followed 
by  another,  providing,  "  nor  to  any  death  caused  "  in  certain 
named  ways,  the  context  shows  that  the  first  clause  is  only 
applicable  to  injuries  not  resulting  in  death.  There  are  rea- 
sons for  the  condition  applying  to  a  surviving  claimant.  He 
has  an  opportunity  for  feigning  an  internal  injury  if  disposed 
to  defraud  the  insurers,  but  no  such  protection  is  required 
where  the  accident  causes  death.  The  dead  body  is  an  ex- 
ternal and  visible  sign  that  an  injury  was  received,  when  death 

1  Accident  Ins.  Co.  v.  Crandal,  120  enhauer  v.  Ins.  Co.,  7  Heisk.  567;  19 
U.S.  527;  7  Sup.  Ct.  Rep.  685;  see  Am.  Rep.  623;  Moore  v.  Ins  Co.,  1  Am. 
upon  this  subject,  as  tending  to  deter-  L.  T.  Rep.  (N.  S.)  319;  Hartman  v. 
mine  the  principles  involved,  Black-  Ins.  Co.,  21  Pa.  St.  466;  Phillips  v. 
stone  v.  Ins.  Co.,  74  Mich.  592;  Mu-  Ins.  Co.,  26  La.  Ann.  404;  21  Am. 
tual  Lifev.  Terry,  82  U.  S.  (15  Wall.)  Rep.  549;  Van  Zandt  v.  Ins.  Co.,  55 
580;  Bigelowv.  Ins.  Co.,  93  U.S.  284;  N.  Y.  169;  14  Am.  Rep.  215;  Nimick 
Manhattan  Ins.  Co.  v.  Broughton,  v.  Ins.  Co.,  3  Pittsburg  (Pa.),  293; 
109  U.  S.  121;  Equitable  Life  v.  Pat-  Conn.  Mutual  v.  Groom,  86  Pa.  St. 
erson,  41  Ga.  338;  Breasted  v.  Trust  92;  27  Am.  Rep.  689;  Gay  v.  Ins.  Co., 
Co.,  4  Hill  74;  8  N.  Y.  299;  Easta-  9  Blatchford  142;  Adkins  v.  Ins.  Co., 
brook  v.  Ins.  Co.,  54  Me.  224;  Phad-   70  Mo.   27:  35  Am.  Rep.  410;  Chap. 


ACCIDENT    INSURANCE.  729 

follows  an  accident.1  While  an  insured  was  driving,  his  horse 
became  frightened,  ran  away  without  upsetting  the  carriage 
or  colliding  with  anything,  and  was  at  length  brought  under 
control.  He  was  in  great  danger  at  the  time,  and  suffered  so 
severely,  either  from  fright  or  strain  caused  by  his  physical 
exertion  in  restraining  tha  horse,  that  he  died  within  an  hour. 
It  was  held  that  the  company  was  Liable,  though  there  was  no 
external  and  visible  sign  of  injury  upon  the  body  of  the  in- 
sured.2 While  chopping  wood  in  a  place  made  slippery  by 
the  sleet  and  hail  which  had  fallen,  the  insured  slipped,  fell 
across  a  log  and  immediately  expired.  There  was  no  visible 
mark  upon  his  body,  but  the  company  was  held  liable.8 

Under  such  a  clause  in  a  policy,  there  must  bean  external 
and  visible  sign  of  the  injury,  but  it  doss  not  necessarily  fol- 
low that  the  injury  must,  be  external.  Visible  signs  of  injury, 
within  its  meaning,  are  not  to  be  confined  to  broken  limbs  or 
bruises  on  the  surface  of  the  body.  There  maybe  other 
external  indications  or  evidences  which  are  visible  signs  of 
internal  injury.  If  an  internal  injury  produces,  for  example, 
a  pale  and  sickly  look  in  the  face,  if  it  causes  vomiting  and 
retching,  or  bloody  or  unnatural  discharges  from  the  bowels; 
if  it  sends  forth  to  the  observation  of  the  eye,  in  the  struggle 
of  nature,  any  sign  of  the  injury,  these  are  external  and  visible 
signs,  provided  they  are  the  direct  result  of  the  injury.' 
Where  the  insured  was  found  dead  in  bed.  with  a  ball  of  tough 
froth  over  his  mouth,  slightly  tinged  with  blood,  and  some  red 
splashes  on  the  side  of  his   face  and   on    his  breast,  the  room 

being  lull  of  coal  gas.  it  was  held  to  be  a  question   to  he  decided 

by  the  jury,  under  the  evidence,  whether  the.-'  were  the  visible 
and  external  signs  of  injury.''  A  nosebleed  may  he  a  visible 
external  sign  of  an  injury,  and  a  bloody  discharge    from    the 

man  v.  Ins.  Co..  c»  Biss.  238;  Cooper  berger  v.  Association,    it    Fed.   Rep. 

v.    Ins.  ('....    102   Mass.   227;    :'.    Am.  170. 

Rep.  151;  Jacobs  v.  bis,  Co., 1  McAr-  'McGlinchy  v.  Casualty  Co.,  supra. 

thur  ili.  i '.  i  •'.:!•,»;  Dean  v.  Ins.  Co.,  4  B  Eggenberger    v.    Association,   41 

Allen  mi.  Fed.  L72. 

McGlinchy  v.  Fidelity  &  Casualty  '  Barry  v.  Accidenl   Ass'n,  23  Fed. 

Co.,  80  Me.  251;  14  At  I.  Rep.  L8;  Paul  Rep.  712. 

v.  Ins.  Co.,  1'illun  818;  affirmed  112  SU.  9.  Ace.  Ass'n  \.  Newman,  84 

X.  Y.  172;  20  N.  East.  Rep.  847;  Mai-  Va.  52;  :'■  8.  K.  R<  p.  805;  Bee  ;  894. 
lory  v.  Ins.  Co..  47  N.  Y.  52;  Eggen- 


730  ACCIDENT   INSURANCE. 

bowels,  even  two  or  three  weeks  after  an  injury,  may  be  its 
direct  and  visible  result.  Complaint  of  pain  or  soreness  is  not, 
however,  such  a  sign.1  In  an  action  on  an  accident  policy 
which  provided  that  the  insurance  should  not  extend  "  to  in- 
juries of  which  there  should  be  no  visible  mark  on  the  body 
of  the  insured,"  where  the  answer  admitted  the  death  of 
deceased  from  erysipelas  ensuing  upon  the  accidental  cutting 
and  laceration  of  one  of  his  fingers,  the  subsequent  allegation 
that  "  there  was  no  visible  mark  of  said  alleged  accidental 
injury  upon  the  body  of  plaintiff's  testator"  is  repugnant  to 
the  admission,  and  the  defense  is  not  well  pleaded.2  "Where  it 
is  provided  that  the  insurance  shall  not  cover  injuries  of  which 
there  is  no  visible  external  mark  upon  the  body  of  the  insured, 
and  his  injury  is  a  strain,  which  was  not  externally  visible 
until  shortly  after  the  accident,  he  is  entitled  to  recover.  Such 
a  clause  does  not  require  that  the  effects  of  the  accident  shall 
be  immediately  visible,  or  that  there  must  be  broken  limbs,  or 
bruises,  contusions,  or  lacerations  on  the  body.3  An  injury 
may  not  be  visible  to  the  eye,  and  still  have  an  external  or 
visible  sign.  A  strain  of  the  recti  muscles  which  can  be 
ascertained  by  a  physician  through  the  sense  of  feeling  by 
applying  his  hands  upon  the  exterior  of  the  body  may  be  said 
to  be  "  visible,"  within  the  meaning  of  an  accident  policy, 
since  it  is  noticeable  and  apparent  to  the  touch.4 

§380. — The  nature,  cause  or  manner  of  death  unknown, 
or  incapable  of  direct  and  positive  proof — Burden  of 
proof.— Where  the  evidence  in  a  case  is  sufficient  within  the 
rules  of  law  to  prove  that  the  death  of  the  insured  was  the 
result  of  external,  violent  and  accidental  means,  the  language 
of  the  policy  requiring  the  evidence  to  be  "  direct  and  affirma- 
tive "  on  the  subject  can  not  be  construed  to  take  the  case  out 
of  the  ordinary  rules  of  evidence.6  Circumstantial  evidence  is 
regarded  by  the  law  as  competent  to  prove  any  given  fact, 

1  Whitehouse  v.  Ins.  Co.,  7  Ins.  L.       6  Reynolds  v.  Accident  Association, 

J.  23;  U.  S.  Association  v.  Barry,  131  1   N.   Y.   Supp.    738;    17   N.    Y.  St. 

TJ.  S.  100.  Reptr.    337;    Utter    v.   Ins.    Co.,    65 

2Bernays  v.    United    States  Mut.  Mich.  545;  32  N.  W.  Rep.  812;  161ns. 

Ace.  Ass'n,  45  Fed.  Rep.  455.  L.  J.  532;  see  section  388;  Badenfeld 

3 Pennington  v.  Ins.  Co.,  85  Iowa  v.  Ass'n,  154  Mass.  77;   27  N.  East. 

468;  52  N.  W.  Rep.  482.  Rep.  769;  Richards  v.  Ins.  Co.,  89  Cal. 

4  Gale  v.  Association,  21 N.  Y.  Supp.  170;  26  Pac.  Rep.  762. 
893. 


ACCIDENT   INSURANCE.  731 

and  sometimes  it  is  as  cogent  and  irresistible  as  direct  and 
positive  testimony.  Such  a  requirement  of  a  policy  as  to 
direct  and  positive  proof  does  not  make  it  necessary  that 
the  i/laintiff  shall  establish  the  fact  and  attendant  circum- 
stances of  the  decedent's  injury  by  persons  who  were  actually 
present  when  the  injury  occurred.  The  fact  that  the  injury 
was  caused  by  external  violence  may  be  directly  and  positively 
established  by  the  proof  given  of  the  nature  and  character  of 
the  injury,  and  the  presumption  is  that  an  injury  was  caused 
by  accidental  means  rather  than  that  it  was  the  result  of 
design,  either  on  the  part  of  the  decedent  or  of  any  other  per- 
son.' Under  a  policy  stipulating  that  the  insurance  should 
not  extend  to  any  case  of  death,  the  nature,  cause,  and  manner 
of  which  is  unknown,  or  incapable  of  direct  and  positive  proof, 
it  is  not  necessary  to  establish  the  fact  and  circumstances  of 
death  by  witnesses  actually  present,  but  these  may  be  inferred 
from  the  circumstances,  and  it  is  not  error  to  charge  that  the 
jury  may  find  any  fact  proved  which  may  rightfully  and  rea- 
sonably be  inferred  from  the  evidence.2 

A  policy  provided :  "  This  insurance  shall  not  be  held  to 
extend  to  mysterious  disappearances,  nor  to  any  case  of  death 
or  disability,  the  nature,  cause,  or  manner  of  which  is  unknown. 
or  incapable  of  direct  and  positive  proof."  The  insured  was 
found  dead  in  a  cattle-guard  on  a  railway,  having  been  run 
over  by  a  passing  train.  The  cattle-guard  was  at  the  end  of 
;i  nlatform  of  the  railway  station,  where  the  deceased  might 
have  fallen  into  it  accidentally,  but  there  was  no  evidence  as 
to  i  lie  circumstances  of  his  death.  The  court  said  :  "  We  think 
it  would  be  a  perversion  of  the  true  meaning  of  this  clause  to 
hold  that,  where  the  immediate  cause  of  death  is  indisputable 
and  evidenced  by  outward  violence  caused  by  a  train  running 
over  the  body,  and  an  accident  prima  foci*  within  the  direct 

•Cronkhite  v.  Travelers'   Ins.  Co.,  89  0al.  170;  26  Pac.  Rep.  762;  Baden- 

7.")  Wis.  75;  4:5  X.  \v.  Rep.  781;  Trav-  feld  y.  Ass'n,  supra. 

elers'  Ins.  Co.  v.  McConkey,  127  U.  'Accident   fas.  Co.   v.  Bennett,  90 

S.  661;  8  Sup.  Ct.  Rep.    1880;  17  Ins.  Tenn.  266;  16  S.  W.  Rep.  738;  E_ 

L.J.  585;  Miillory  v.  fas.  Co.,  47  N.  berger  v.   Association,  41  Fed.  Rep. 

Y.  52;  Peck  v.  Accidenl  Association,  172;    Tennant  v.  Ins.   Co.,  81    Fed, 

52  111111205;  5  N.  V.  Supp.215;  Free-  Rep.  822;  Travelers'  In-.  Co.  v.  Shep- 

manv.Ina.  Co.,  144  Mass.  572;  12  N.  pard,85Ga.  751;  12  s.  E.  Rep.  18. 
East.  Rep.  372;   Richards  v.  Ins.  Co., 


732  ACCIDENT    INSURANCE. 

meaning  of  the  insurance,  it  can  be  any  objection  that  no  hu- 
man eye  witnessed  the  precise  manner  in  which  the  deceased 
fell  into  or  got  into  the  cattle-guard.  A  large  proportion  of 
accidental  deaths  occur  under  such  circumstances  that  evidence 
is  wanting  as  to  the  precise  manner  in  which  the  deceased 
met  his  fate.  Where  the  visible  injuries  plainly  account  for 
death,  it  can  hardly  be  necessary  to  explain  step  by  step  how 
it  happened."  '  Insured  was  found  on  a  railroad  track  in  a  sit- 
uation which  showed  that  he  had  been  killed  by  a  certain  train. 
There  was  evidence  that  before  the  arrival  of  that  train  he  was 
waiting  in  the  train-house  for  a  train  which  passed  fifteen  min- 
utes later  on  a  track  west  of  that  on  which  he  was  found. 
There  was  no  evidence  of  the  cause  of  his  fall  on  the  track,  or 
of  his  proximate  acts.  There  was  evidence  that  the  platform 
east  of  the  track  on  which  he  was  run  over  was  for  trainmen 
only,  and  that  the  place  intended  for  and  generally  used  by 
passengers  taking  or  leaving  cars  on  that  track  was  between 
that  track  and  the  one  to  the  west.  It  was  held  that  the  court 
properly  refused  to  instruct  that  if  deceased,  while  on  the  east 
platform,  or  while  getting  off  a  car  in  motion,  fell  on  the  track, 
there  could  be  no  recovery  of  the  insurance,  there  being  no 
evidence  upon  which  to  base  such  instructions.2 

i  "Wright  v.  Ins.  Co.,  29  Up.  Can.  were  such  as  to  make  it  negligent.  If 
C.  P.  221;  Trew  v.  Assurance  Co.,  6  the  jury  could  surmise  that  he  left 
H.  &  N.  839;  Fitton  v.  Ins.  Co.,  17  C.  the  car  when  it  was  in  motion,  under 
B.  N.  S.  122;  Mallory  v.  Ins.  Co.,  47  circumstances  which  rendered  the 
N.  Y.  52;  Knickerbocker  Ins.  Co.  v.  act  negligent,  they  could  equally  well 
Jordan,  7  Cin.  L.  Bull.  71 ;  Badenfeld  surmise  that  he  left  it  under  circum- 
v.  Ass'n,  supra;  Peck  v.  Association,  stances  which  would  show  that  the 
52  Hun  255;  5  N.  Y.  Supp.  215;  Ac-  act  was  not  negligent.  It  may  be 
cident  Ins.  Co.  v.  Bennett,  90  Tenn.  said,  in  general,  in  regard  to  each  of 
256;  16  S.  W.  Rep.  728.  the   defendant's   prayers  for  rulings 

2  Badenfeld  v.  Association,  154  Mass.  and  instructions,  that  there  is  no  evi- 
77;  27  N.  East.  Rep.  769.  The  court  dence  of  the  act  of  the  deceased  prox- 
said:  "  The  defendant  asked  for  in-  imate  to  his  injury,  and,  of  course, 
structions  upon  the  hypothesis  that  no  evidence  of  the  circumstances 
deceased  fell  while  leaving  the  car  which  characterize  the  act  as  negli- 
when  it  was  in  motion.  There  was  gent  or  otherwise.  If  the  jury  infer 
no  evidence  that  he  so  fell,  but,  if  it  an  act,  they  are  not,  without  evi- 
could  be  inferred,  it  would  not  be  dence,  at  liberty  to  infer  the  circum- 
conclusive  of  his  negligence.  That  stances  which  made  the  act  negli- 
would  depend  upon  the  circum-  gent.  The  jury  could  not  properly 
stances,  and  there  would  be  no  pre-  found  their  verdict  upon  particular 
sumption     that    the    circumstances    facts  found  without  evidence.     The 


ACCIDENT  INSURANCE.  733 

§  381.  An  insured  was  in  his  usual  health  until  one  night 
when  he  got  lip  from  his  bed  and  went  down  stairs.  When 
he  came  back  he  said  he  had  fallen  down  the  back  stairs,  hit 
and  hurt  the  back  of  his  head  and  almost  killed  himself.  He 
complained  greatly  of  his  head,  appeared  taint,  and  vomited. 
He  grew  worse  and  died  in  four  days.  No  one  saw  or  heard 
him  fall  down  stairs.  The  company  was  sued  on  the  ground 
that  his  death  was  caused  by  his  accidental  fall,  and  the  only 
evidence  on  that  point  at  the  trial  was  the  testimony  of  his 
wife  and  son  as  to  the  declarations  made  by  him  when  he 
came  back  to  his  room.  The  court  held  that  these  declara- 
tions were  competent  evidence  of  an  accident  from  external, 
violent  and  accidental  means.1  While  the  burden  is  upon  the 
plaintiff  to  show  that  death  was  caused  by  external,  violent 
and  accidental  means,  he  need  not  negative  the  limitations 
and  conditions  of  the  policy,  which  provide  that  it  does  not 
cover  disappearance,  intentional  injuries,  and  the  large  num- 
ber of  speciiied  injuries,  or  death  from  the  variety  of  causes 
named  in  it.2  And  the  burden  is  on  the  company  to  show  that 
the  insured  did  not  use  due  diligence  for  Ins  personal  safety.3 
A  policy  contained  tins  condition  :  "  Provided,  always,  that  no 
claim  shall  be  made  under  this  policy  by  the  said  insured  in 
respect  of  any  injury,  unless  the  same  shall  be  caused  bysome 
outward  or  visible  means,  of  which  proof  satisfactory  can  be 
furnished."  The  language  does  not  require  thai  proofs  of  the 
cause  of  the  injury  shall  be  made  and  presented  to  the  com- 
pany as  an  act  precedent,  to  a  right  to  recover.  The  injury 
must  be  caused  by  some  outward  or  visible  means,  of  which 
proof  "can  be  furnished,"  but  the  language  does  not  import 
that  such  proof  must  lie  made  before  there  is  a  righl  of  re- 
real  question  was  whether  the  facts  supra;  Hall  v.  Am.  Ace.  Association, 
directly  proved  by  the  evidence  and  v»>  Wis.  ."iis-.  .">;  N.  \v.  Rep.  866. 
those  inferred  from  them  sustained  'Travelers'  ins  Co.  \.  McConkey, 
the  burden  of  proof,  which  was  upon  K'7  U.S.  661 ;  1 7  ln>.  L.  J.  585;  <  Joburn 
the  defendant;  and  this  was  clearly  v.  Travelers'  ln>.  Co.,  145  Mass;  226; 
a  question  tor  the  jury,  and  not  for  18  N.  East.  Rep.  607;  1?  Ins.  L.  J.  40; 
the  court,  unless  the  court  could  rule  Cronkhite  v.  Travelers'  Ins.  Co.,  75 
that  there  was  not  sufficient  evi-  Wis.  116:  48  N.  W.  Rep.  731. 
dence."  Badenfeld  v.  Ass'n,    154  Mass.  77: 

1  Travelers' Ins.  < 'o.  v.  Mosley,  75  27  N.  East.  Rep.  769;  Freeman  v.  Ins. 
l\  s.  (8  Wall. i  897;  Clifford,  J.,dis-  Co.,  ill  Mass.  572;  16  Ens.  I..  J.  822; 
senting;    see   Richards  v.  Ins.  Ce.,    36  All..  L.  J.  127;  12  N.  East.  372. 


734  ACCIDENT    INSURANCE. 

covery.  The  terms  of  a  policy  may  make  it  a  condition  prec- 
edent to  the  right  to  recover  the  stipulated  amount  that  proof  of 
the  happening  of  the  accident  and  the  causes  of  the  injury 
shall  be  furnished  to  the  company,  but  there  is  no  rule  of  law 
requiring  such  proof  as  an  act  precedent  to  such  right.1  By 
satisfactory  proof  of  accidental  death  or  injury  is  meant  such 
proof  as  shall  appear  satisfactory  to  a  court,  according  to  the 
rules  of  evidence,  and  not  such  as  shall  be  satisfactory  to  the 
company.2 

1  Railway  Assurance  Co.   v.   Bur-  v.  Garden,  101  N.  Y.  387;  4  N.  East, 
well,  44  Ind.  460;  3  Ins.  L.  J.  281  Rep.  749;  Miesell  v  Ins.  Co.,  76  N.  Y. 

2  Dennis  v.   Ben.   Ass'n,  120  M    Y  115, 
496;  4  N.  East.  Rep.   843;    Boiler  Co. 


CHAPTER  XXVIII. 

ACCIDENT   INSURANCE. 

§  382-385.     Accidents  while  traveling  by  public  or  private  conveyance. 

386.  While  traveling  in  compliance  with  all  rules  and  regulations  of 

common  carriers;  violation  of  rules  of  employment. 

387.  Walking  on  railway  track. 

388.  Intentional  injuries  inflicted  by  the  insured  or  any  other  person. 

389.  390.     Intoxication:  under  the  influence  of  liquor. 

391.  Fits,  vertigo,  fainting. 

392.  Drowning. 

§  382.  Accidents  while  traveling  by  public  or  private 
conveyance. — Where  a  contract  of  accident  insurance  sti  pulates 
that  the  insured  shall  not  be  wanting  in  diligence  for  his  self- 
protection,  shall  not  expose  himself  to  unnecessary  danger,  or 
obvious  risk,  or  shall  not  contribute  to  an  injury  by  his  own  neg- 
ligenee,  the  liability  of  the  insurer  for  an  accident  to  the  insured, 
and  his  own  acts  in  relation  to  the  cause  of  the  injury,  are  to  be 
measured  much  as  if  the  rights  of  the  parties  depended,  not 
upon  contract,  but  unon  the  tortious  injury  of  one  through  the 
negligence  of  the  other.1  The  decisions  in  the  books  on  ques- 
tions of  negligence  and  contributory  negligence  are,  therefore, 
often  in  point  in  such  cases,  though  of  course,  the  doctrines  of 
willful  negligence  and  comparative  negligence  do  not  apply. 
A  traveler  might,  under  these  last  named  doctrines,  have  a 
good  causeof  action  for  an  injury  againsl  the  common  carrier 
transporting  him,  while  an  accident  insurance  company  would 
not  be  liable  to  him  under  such  a  contract  for  the  same  injury, 
but  an  insurance  company  can  never  be  liable  for  an  accidental 
injury  to  a  traveler  holding  such  acontract  of  insurance,  where 
the  common  carrier  would  be  exempt  from  liabilit  v  on  account 
of  his  contributory  negligence.  IT  any  injury  happen  to  an 
insured  traveler  while  he  is  occupying  a  place  provided  tor  the 
accommodation  of  passengers,  nothing  further  is  ordinarily 
necessary  to  show  due  care  on  his  part.     But  when  it  is  shown 

1  See  §  367. 

(785) 


736  ACCIDENT   INSURANCE. 

that  he  had  left  the  place  assigned  for  passengers,  and  was 
occupjdng  an  exposed  position,  the  company  is  not  liable, 
unless  it  is  also  made  to  appear,  upon  some  ground  of  necessity, 
that  his  position  was  consistent  with  the  exercise  of  proper 
care  and  caution.1 

Bringing  a  train  to  a  full  stop  near  the  regular  station,  after 
having  given  the  usual  signal  indicating  the  arrival  at  the  sta- 
tion, is  an  implied  invitation  from  the  company  to  the  passen- 
ger to  alight;  and  a  passenger  is  not  necessarily  guilty  of 
contributory  negligence,  who,  without  knowledge  of  the  dan- 
gerous place  at  which  a  train  has  stopped,  and  in  a  dark  night, 
steps  from  a  train  which  has  been  brought  to  a  full  stop,  near 
the  usual  stopping  place,  at  the  regular  time  for  stopping, 
after  the  customary  signal  indicating  the  arrival  at  the  sta- 
tion.2 If  a  person  insured  while  traveling  by  public  or  private 
conveyance,  having  a  right  to  leave  a  train  at  a  station,  is  in- 
formed or  notified  in  any  way  that  the  train  is  about  to  start, 
and  an  opportunity  is  thus  given  to  him  to  take  his  place 
again  upon  the  train,  but  he  chooses  to  remain  until  the 
train  is  put  in  motion  and  is  then  injured  in  getting  on  the 
train,  it  may  be  said  that  ^  is  negligent,  in  other  words,  that 
he  takes  the  risk  of  getting  on  the  train  while  thus  in  motion. 
But  if,  having  alighted  at  a  station,  he  has  no  notice  by  bell, 
whistle  or  otherwise,  of  the  movement  of  the  train,  or  he  has 
not  the  opportunity,  after  notice  is  given,  to  get  on  the  train, 
and,  intending  to  go  farther  he  attempts  to  get  on  the  train 
and  is  injured,  there  is  not  the  same  measure  of  responsibility 
upon  him.  It  would  be  natural  for  a  man — for  a,  prudent 
man — intending  to  go  farther  on  the  train  to  make  an  effort, 
even  when  the  train  was  in  motion,  to  regain  his  place  on  the 
train.3  The  insured  took  a  train  and  went  to  Kankakee.  The 
practice  was  for  the  train  to  stop  at  the  station,  and  then  pass 
on  to  the  coal-bin,  provided  the  entire  train  was  to  go  be- 
yond Kankakee.     The  train  stopped  at   the  station  and  sev- 

'.Hickeyv.  R.  R.  Co.,  14  Allen  429.  road    Co.  v.    Aspell,    11  Harris  14T; 

2  McLean    v.    Burbank,    11   Minn.  Terre  Haute,  etc.,  R.  R.  Co.  v.  Buck. 

277.  288;  Maury  v.   Tahnadge,  2  Mc-  96  Ind.  346;  Burkhard  v.  Ins.  Co..  102 

Lean   157;  Laing  v.  Colder,  8  Pa.  St.  Pa.  St.  262;  48  Am.  Rep.  205. 

479;  Stokes  v.  Saltonstall,  13  Peters  3Tooley  v.   Assurance   Co.,  3  Biss. 

192;  Montgomery,  etc.  R.   R.    Co.  v.  399;  2  Ins.   Law  J.  275;  Schneider  v. 

Boring,  51  Ga.  582;  Pennsylvania  R.  Ins.  Co.,  24  Wis.  28. 
R.  Co.  v.  White,  88  Pa.  St.  327;  Rail- 


ACCIDENT   INSURANCE.  737 

eral  persons  left  the  cars,  the  insured  among  others.  The 
train  remained  at  the  station  several  minutes  and  took 
in  water.  The  bell  was  rung,  the  conductor  signaled  with 
his  light,  and  the  train  went  on  to  take  in  coal.  There  was 
a  platform  extending  from  the  station  along  the  side  of 
the  railroad  track  toward  the  water  tank  and  coal-bin. 
When  the  train  moved,  the  insured,  who  was  standing  by 
a  door  of  a  station,  started  forward  on  the  platform  to 
overtake  the  train.  "When  he  reached  the  train,  he  ex- 
tended his  hands  to  grasp  the  car  rails,  fell  between  the  two 
passenger  cars,  and  was  run  over  and  instantly  killed.  There 
was  evidence  tending  to  show  that  his  journey  ended  at 
Kankakee,  but  evidence  to  the  contrary  was  also  shown.  A 
clause  in  his  policy  limited  the  liability  of  the  company  to  an 
accident  received  bv  the  defendant  "  while  actuallv  traveling 
in  a  public  conveyance  provided  by  common  carriers,  and  in 
compliance  with  all  rules  and  regulations  of  such  carriers." 
The  court  said  :  "  Tooley  must  have  actuallv  been  a  traveler 
in  or  upon  the  train;  but  it  can  not  be  said  that  the  responsi- 
bility ceased  whenever  he  stepped  out  of  the  car  to  alight  at 
a  station,  and  that  it  never  became  operative  again  until  his 
foot  entered  the  car  to  resume  his  journey.  That  would  be  giv- 
ing too  narrow  a  meaning  to  the  clause  of  the  policy.  ^Ye 
think  that  the  fair  construction  of  the  liability  assumed  by  the 
defendant  in  this  respect  was,  that  it  included  injuries  re- 
ceived by  Tooley  while  necessarily  getting  on  or  off  the  train, 
as  a  traveler  upon  it.  *  It  is  a  question  of  fact  to  be  de- 
termined by  the  jury — was  Tooley  at  the  time  the  injury 
was  received  by  him,  a  traveler  on  the  train  '.  And  this  will 
depend  upon  the  fact  whether  his  journey  terminated  at  Kan- 
kakee. 

It  is  claimed  on  the  part  of  the  defense  that  that  was  the 
termination  of  his  journey,  and.  if  SO,  then  lie  was  nut  a 
traveler  on  this  train  at  the  time  of  the  accident.  *  * 
According  to  the  view  which  we  take  of  the  contract  between 
the  parties,  if  he  were  a  passenger  proceeding  beyond  Kan- 
kakee, on  the  train,  he  had  the  right  to  leave  the  car  at  Kan- 
kakee and  return  to  it;  he  was  not  bound  to  remain  inside  the 
car  all  the  time."  ' 

'Tooley  v.  Assurance  Co.,  supra. 
47 


738  ACCIDENT   INSURANCE. 

§  383.  A  policy  insuring  "against  any  accident  while 
traveling  by  public  or  private  conveyances  for  transportation 
of  passengers,"  covers  an  accident  occurring  while  the  insured 
was  attempting  to  enter  a  public  conveyance  for  passengers 
while  in  motion.1  But  where  such  a  policy  provides  that  the 
company  shall  not  be  liable  for  an  injury  incurred  in  con- 
sequence of  the  negligence  of  the  insured,  it  has  been  held  that 
the  company  will  not  be  liable  if  the  insured  is  injured  in  at- 
tempting to  get  off  or  on  a  conveyance  while  in  motion, 
whether  the  motion  is  rapid  or  slow; a  but  it  has  also  been  held, 
under  such  a  provision  of  the  policy,  that  the  test  of  liability  is 
whether  the  insured,  in  attempting  to  get  upon  a  conveyance 
while  in  motion,  used  that  degree  of  caution  and  diligence 
which  a  prudent  man  would  use  under  the  circumstances  in 
which  he  was  placed — or  in  other  words,  it  has  been  held  that 
the  question  whether  the  insured  acted  prudently,  reasonably 
and  diligently,  under  the  circumstances  of  the  case,  is  one  for 
the  jury  to  determine  under  the  evidence.3  Under  the  pro- 
visions of  a  policy  insuring  the  holder  against  accidents  while 
traveling  on  the  conveyances  of  any  common  carrier,  pro- 
vided he  complied  with  the  rules  and  regulations  of  such 
carrier  and  exercised  due  diligence  for  self-protection,  it  was 
held  that  a  passenger  on  a  railway  car,  who  was  injured  by 
being  thrown  from  the  steps  of  the  car,  where  he  was  stand- 
ing while  the  train  approached  a  station,  in  violation  of  a 
known  rule  of  the  company,  was  not  entitled  to  recover.4. 
A  contract  of  accident  insurance  provided :  "  Standing, 
being  or  riding  upon  the  platform  of  moving  railway  coaches, 
*  *  or  entering  or  attempting  to  enter  or  leave  any  public 
conveyance  using  steam  as  a  motive  power  while  the  same  is 
in  motion,  *  *  are  hazards  not  contemplated  or  covered 
by  this  certificate,  and  no  sum  shall  be  paid,"  etc.  This  ex- 
ception, however,  was  not  made  to  apply  to  the  exposure  of 
railway  employes   in   the  performance   of  their  duty.     The 

1  Champlin  v.  Assurance  Company,  Hickey  v.  E.  R.  Co.,  14  Allen  429; 
6Lans.  71;  see  §  365  et  seq.  Damount  v.  R.  R.  Co.,   9  La.   Ann. 

2  See  §365;  Sawtelle  v.  Assurance    441. 

Co..  15  Blatch.  216;  see  §  367;  Hull  v.  3Tooley  v.  Assurance  Co.,  3  Biss. 

Association,  41  Minn.  231;  42  N.  W.  399,  403. 

Rep.  936;  Miller  v.  Travelers' Ins.  Co.,  4Bon  v.    Assurance  Co.,  56  Iowa 

39  Minn.    548;    40  N.  W.  Rep.   839;  664. 


ACCIDENT   INSURANCE.  739 

assured,  a  shop  hand  of  a  railway  company,  while  being  car- 
ried homeward  from  the  shops  at  the  close  of  the  day's  work, 
upon  one  of  the  company's  trains,  went  out  upon  the  platform 
while  the  train  was  in  motion,  intending  to  get  off  when  it 
should  stop,  for  the  purpose  of  crossing  over  by  a  switch  to 
another  track.  This  was  done  wholly  for  his  own  convenience 
and  purpose,  and  was  not  prompted  by  any  sudden  emergency 
or  necessity.  He  was  thrown  off  the  platform,  and  killed. 
The  case  was  held  to  be  within  the  specific  exceptions  in  the 
contract,  and  the  insurer  was  not  liable.1  It  can  not  be  said 
that  a  passenger  on  a  railroad  train,  who  goes  out  upon  the 
platform  of  the  car  while  the  train  is  in  motion,  because  he  is 
overcome  by  the  heat  of  the  car,  or  is  suffering  from  nausea, 
voluntarily  exposes  himself  to  unnecessary  danger,  within  the 
meaning  of  a  policy  of  accident  insurance.2 

§  384.  A  policy  insured  the  holder  against  any  accident 
happening  to  him  "from  railway  accident  whilst  traveling  in 
any  class  carriage  on  any  line  of  railway,''  etc.  The  assured 
traveled  in  a  railway  carriage  to  a  certain  place.  In  getting 
off  of  it  after  the  train  had  stopped,  on  a  rainy  morning,  with- 
out any  negligence  on  his  part,  his  foot  slipped  from  the  step, 
and  he  sustained  an  injury.  This  was  held  to  be  a  railway 
accident  whilst  traveling,  within  the  meaning  of  the  policy. 
Pollock,  C.  13.,  said:  "The  first  question  is,  whether  this  is  a 
railway  accident,  within  the  meaning  of  the  policy.  We  are 
of  opinion  that  it  is.  *  *  It  is  quite  plain  that  the  plaintiff 
was  a  traveler  on  the  railway;  it  is  quite  plain  that  though  at 
tin' time  of  the  accident  his  journey  had  in  one  sense  termi- 
nated by  the  carriage  having  stopped,  he  had  not  ceased  to 
be  connected  with  the  carriage,  for  he  was  still  on  it.  The  ac- 
cident also  happened  without  negligence  on  his  part,  and  while 
doing  an  act  which,  as  a  passenger,  he  must  necessarily  have 
dour,  for  a  passenger  must  get  into  the  carriage,  and  get  cut 
of  it  when  the  journey  is  at  an  end,  and  can  not  he  considered 
as  disconnected  with  the  machinery  of  motion  until  the  time 
lie  has,  :is  it  were,  safely  landed  from  the  carriage  and  got 
upon  the  platform.  The  accident  is  attributable  to  his  being 
a  passenger  on  the  railway,  and  it  arises  out  of  an  act  imme- 

1  Hull  v.  Accident  Association,  41  *  Marx  v.  Travelers'  Ins.  Co.,  39 
Minn.  231;  42  N.  W.  Rep.  936.  Fed.  Rep.  321. 


740  ACCIDENT   INSURANCE. 

diately  connected  with  his  being  such  passenger.  Under  these 
circumstances  we  think  this  was  a  railway  accident  within  the 
meaning  of  the  policy."  Anderson,  B.,  said  :  "  As  to  railway 
accidents,  my  notion  of  a  railway  accident  is  an  accident  oc- 
curring in  the  course  of  traveling  and  arising  out  of  the  fact 
of  the  journey.  It  does  not  necessarily  depend  on  an  accident 
to  the  railway  or  machinery  connected  with  it."  ' 

Where  a  policy  insured  "  against  any  accident  while  travel- 
ing by  public  or  private  conveyances  for  transportation  of 
passengers,"  and  the  insured  was  injured  in  attempting  to  get 
into  an  omnibus  on  a  public  street,  the  supreme  court  of  New 
York  said :  "  Was  the  plaintiff  traveling  when  the  accident 
happened  %  He  was  in  the  act  of  getting  into  a  public  convey- 
ance for  that  purpose,  and  was  injured  while  upon  the  outside 
step  thereof.  It  would  be  a  very  strained  construction  of  a  con- 
tract like  this  to  hold  that  he  was  not  traveling.  If  he  was 
not  traveling  it  is  difficult  to  say  wrtiat  he  was  doing.  We 
think  that  as  he  was  actually  going  from  one  place  to  another, 
he  was  traveling."  a 

An  insurance  was  procured  against "  any  accident  while  trav- 
eling by  public  or  private  conveyances  provided  for  transporta- 
tion of  passengers."  An  accident  occurred  to  the  insured  while 
she  was  going  on  foot  over  the  customary  route  from  a  steam- 
boat-wharf, where  conveyances  were  to  be  had  for  hire,  to 
a  railway  station  about  seventy  rods  from  the  wharf.  At  the 
time  of  the  accident  she  was  in  the  prosecution  of  her  journey, 
intending  to  continue  it  by  rail.  The  supreme  court  of  Xew 
York  held  that  the  accident  was  not  covered  by  the  insurance, 
but  the  court  of  appeals  reversed  this  decision  and  said  :  "  It 
must  be  conceded  that  the  injury  received  by  the  plaintiff's 
intestate  does  not  come  within  the  strict  literal  words  of  the 
contract  of  assurance.  *  *  The  intestate  was  not  actually 
traveling  upon  any  public  or  private  conveyance  provided  for 
the  transportation  of  passengers  at  the  time  of  receiving  the 
injury  which  caused  her  death.  *  *  The  policy  must  be 
construed  so  as  to  carry  into  effect  the  intention  of  the  parties, 
so  far  as  such  intention  can  be  determined  from  the  language 

1  Theobald  v.  Assurance  Society,  26       2  Chauaplin    v.   Assurance    Co.,   G 
Law  &  Eq.  (Eng.)  432;  10  Exch.  45;    Lans.  71. 
2  Big.  L.  &  A.  Cas.  393. 


ACCIDENT   INSURANCE.  741 

used,  construed  in  the  light  of  well-known  extrinsic  facts, 
which  must  be  presumed  to  have  been  known  to  the  contract- 
ing parties  at  the  time  of  making  the  contract,  and  in  refer- 
ence to  which  it  was  entered  into.  One  fact  of  this  character, 
very  important  in  the  present  case,  is  that  of  the  frequent 
change  required  from  one  train  of  cars  to  another  at  inter- 
mediate stations  upon  the  same  journey.  *  *  Can  it  be 
said  that  a  passenger  is  not  traveling  within  the  meaning  of 
this  contract  by  public  conveyance,  while  passing  from  one 
train  to  go  on  board  another  in  the  actual  prosecution  of  his 
journey  ?  *  *  I  think  that  such  passenger,  within  the 
meaning  of  this  contract,  and  also  within  the  fair  construc- 
tion of  the  language,  is  a  traveler  by  public  conveyance, 
*  although  he  may  walk  a  short  distance  from  the  ferry- 
boat to  the  train,  *  or  from  one  train  to  another,  when 
such  changes  are  made  at  intermediate  stations.  An  injury 
received  while  so  necessarily  walking  in  the  actual  prosecution 
of  the  journey,  is  received  while  traveling  by  public  convey- 
ance, within  the  meaning  of  the  policy,  as  such  walking  is  the 
actual  and  necessary  accompaniment  of  such  travel.  *  *  It 
surely  can  make  no  difference  in  principle,  that  the  space  to  be 
walked  over,  in  going  from  one  conveyance  to  another,  is  a 
Cew  steps  more  or  less.  Nor  does  it  affect  the  question  that 
the  intestate  might  have  procured  a  hack  to  carry  her,  had  she 
so  have  chosen.  She  pursued  the  same  course  that  the  great 
majority  of  passengers  did.  This  she  had  the  right  to  do 
under  the  contract."  ' 

1  Nbrthup  v.  Assurance  Co.,  43  N.  fire-engine  in  the  Bowery,  or  knocked 

Y.  516',  reversing  2  Lans.  Kifi:  2  Big.  down  by  a  falling  brick  from  a  build- 

L.  &  A.  Cas.  129.     An  able  writer  in  ing,  and  yet  bold  the  company  liable 

commenting  upon  this  case,   says:  for  an  injury  which  is  manifestly  ex- 

"  This  construction  of  the  contract  is  eluded  in  contemplation  of  their  con- 

open  to  the  objection   that  theprin-  tract,  and  not  covered  by  their  pre- 

ciple  laid  down  would   apply  equally  mium  based  on  statistics  of  rail  and 

to  walking    across    the  whole   city  of    steamboat  casualties.     The  court  say : 

New  York  on  a  through  trip  to  Wash-  '  It  can  surely  make  no  difference  in 

ington,  as  well   as  to  going  from  the  principle  that  the  space  to  he  walked 

ferry-boat  at  Jersey  <  ilv  to  the  train  over,  in  going    from  one  conveyance 

m  the  adjoining  station.    A  traveler,  to  another,  is  a   Few  steps  more  or 

therefore,  in  prosecuting  his  journey  less.'    Such  construct  ion  reallv  makes 

•by  public  or  private  conveyance'  anew  contract,  which  is  all  tile  more 

might  find   himself  run   over  by  an  hard  on  the   insurers,  because  they 

omnibus  in  Broadway,  or  hurt  by  a  issue    a   '  general    accident    ticket,' 


742  ACCIDENT   INSURANCE. 

An  accident  policy  provided  that  it  should  be  payable  "  only 
in  the  event  of  death  or  disability  of  the  assured  when  caused  by 
an  accident  while  traveling  by  public  or  private  conveyance/' 
The  insured  traveled  by  steamboat  to  a  certain  wharf,  and 
started  thence  on  foot  for  his  home,  some  eight  miles  distant. 
When  he  reached  a  point  on  the  highway  about  half  way 
home,  he  was  waylaid,  robbed,  beaten  and  bruised,  so  that  he 
died  within  a  Aveek  from  his  injuries.  In  an  action  upon  the 
policy  one  of  the  questions  raised  was  whether  the  insured 
was  traveling  by  private  conveyance  at  the  time  he  received 
his  injuries.  The  court  below  said  :  u  When  the  term  '  private 
conveyance '  is  used,  as  in  this  policy,  to  indicate  a  mode  of 
traveling,  its  ordinary  popular  acceptation  means  a  vehicle  or 
instrument  of  conveyance  other  and  dilferent  from  the  person 
or  thing  to  be  conveyed.  It  will  not  answer  any  just  rule  of 
construction  to  hold  that  in  one  sense  it  is  possible  to  say  that 
a  man  walking  on  foot  is  a  private  conveyance  for  himself, 
and,  therefore,  such  must  be  its  interpretation.  The  ordinary 
import  of  the  language,  and  not  the  possible  import,  must 
control.  My  opinion  is,  therefore,  wholly  with  the  defendant 
on  this  question,  and  defeats  a  recovery  by  the  plaintiff."1 
This  decision  was  affirmed  on  appeal  to  the  supreme  court  of 
the  United  States,  and  the  following  opinion  on  this  subject 
was  expressed  by  that  court :  "  That  the  deceased  was  travel- 
ing, is  clear  enough,  but  was  traveling  on  foot  traveling  by 
public  or  private  conveyance?  The  contract  must  receive  the 
construction  which  the  language  used  fairly  warrants.  What 
was  the  understanding  of  the  parties,  or  rather,  what  under- 
standing must  naturally  have  been  derived  from  the  language 
used  \  It  seems  to  us  that  walking  would  not  naturally  be 
presented  to  the  mind  as  a  means  of  public  or  private  convey- 
ance.    Public  conveyance  naturally  suggests  a  vessel  or  vehicle 

which  is  this  precise  risk,  and  for  ance  risks.  No  construction  contra 
which  the  premium  is  accordingly  proferentem  should  enlarge  a  con- 
graduated.  Manifestly  no  form  of  in-  tract  of  insurance  by  implication,  so 
surance  can  be  safe  which  does  not  as  to  undermine  its  very  foundation, 
rest  on  averages  exact  and  denned,  and  yet  this  is  the  effect  of  the  decis- 
Accidents  while  traveling  by  public  ion  of  the  court  of  appeals."  7  Am. 
and  private  conveyance  are  a  class  by  Law  Rev.  605. 

themselves.     A  person  walking  is  ex-  '  Ripley  v.  Assurance  Company,  1 

posed  to  manifold  risks  which  are  ex-  Dill.  403;  S.  C,  2  Big.  L.  &  A.  Caa. 

eluded  in  the  computation  of  convey-  738. 


ACCIDENT    INSURANCE.  743 

employed  in  the  general  conveyance  of  passengers.  Private 
conveyance  suggests  a  vehicle  belonging  to  a  private  individual. 
If  this  was  the  sense  in  which  the  language  was  understood  by 
the  parties,  the  deceased  was  not,  when  injured,  traveling 
within  the  terms  of  the  policy.  There  is  nothing  to  show  that 
it  was  not."  ' 

An  accident  ticket  insured  the  holder  against  "  accident 
while  traveling  by  public  or  private  conveyance  provided  for 
the  transportation  of  passengers."  The  insured  was  a  loco- 
motive engineer  and  was  killed  on  an  engine  while  in  charge 
of  a  train  of  cars.  It  was  contended  that  a  locomotive  or  en- 
gine was  not  a  conveyance  provided  for  the  transportation  of 
passengers.  The  court  said :  "  This  is  certainly  true,  and  if 
the  ticket  applies  solely  and  exclusively  to  passengers  or  trav- 
elers, the  position  that  the  company  is  not  liable  can  not  be 
controverted.  A  passenger  would  have  no  right  to  go  upon 
an  engine,  and  if  he  was  so  indiscreet  as  to  venture  on  such  a 
place,  and  injury  ensued,  he  would  not  be  protected."  2 

§  385.  Where  a  policy  insures  the  holder  against  accidental 
injuries  received  within  a  specified  time,  "subject  always  to 
the  conditions  indorsed,"  the  fact  that  one  of  these  conditions 
states  that  this  covers  only  the  hazard  of  travel  on  the  public 
conveyance  of  a  common  carrier,  shows  no  ambiguity  or  con- 
flict between  the  general  insuring  clause  and  the  limiting  con- 
dition,  such  as  to  require  its  interpretation  in  favor  of  the 
assured  to  cover  risks  other  than  those  of  a  passenger.  Where 
the  policy  plainly  limits  the  risk  covered  to  that  <>('  ;i  pas 
senger  on  a  common  carrier's  public  conveyance,  and  there  is 
no  mistake  or  fraud,  representations  of  the  general  agenl  issu- 
ing the  policy  that  it  will  cover  as  well  all  accidents  happening 
to  insured  while  oaring   for  and  selling  horses  which   he   is 

1  Ripley  v.  Assurance  Co.,  83  U.  S.  construes  it,  because  of  the  acts  and 
(16  Wall.)  336;  2 Lis.  1-.  .J.  538;  3 Big.  knowledge  of  the  agenl  of  thecom- 
L.  &  A.  Cas.  832,  note.  pany  in  issuing  it  to  the  insured, 
Brown  v.  Assurance  Co.,  15  Mo.  who  was  known  to  be  an  engineer, 
221.  The  court,  in  this  case,  holds  the  andwhomighl  reasonably  bave  sup- 
company  liable  on  another  ground,  posed  from  the  sale  of  the  ticket  to 
but  the  opinion  is  certainly  vague  and  him  thai  the  engine  was  to  be  con- 
unsatisfactory.  It  is  impossible  to  sidered  as  a  part  of  the  "  public  con- 
tell  \n  hether  the  court  erroneously  as-  veyance," — the  train  of  ears.—"  pre- 
sumes that  the  contract  is  one  against  vided  for  the  transportation  of  pas- 
accidents  in  general,  or  whether  it  so  Bengers." 


744  ACCIDENT   INSURANCE. 

taking  by  railroad  to  market  transgress  the  agent's  apparent 
authority,  and  do  not  bind  the  company.1 

§  386.  While  traveling  in  compliance  with  all  rules  and 
regulations  of  common  carriers;  violation  of  rules  of  em- 
ployment.— When  the  contract  provides  for  insurance  against 
accidents  while  traveling  in  a  public  conveyance  provided  by 
common  carriers,  and  in  compliance  with  all  rules  and  regula- 
tions of  such  carriers,  it  is  not  necessary  that  the  insured, 
while  traveling  on  a  railway  train,  shall  examine  the  time 
card  to  make  himself  acquainted  with  all  the  rules  which  may 
be  contained  upon  the  time  card  and  ascertain  all  the  minutiae 
connected  with  the  management  and  running  of  trains,  but  he 
must  obey  all  such  rules  as  a  general  traveler  may  be  pre- 
sumed and  ought  to  know.  Any  other  construction  than  this, 
of  such  a  clause  in  a  policy,  would  operate  as  a  snare  upon 
travelers,  and  be  unreasonable.2  A  person  who  was  injured 
by  being  thrown  from  the  steps  of  a  railway  car,  where  he 
stood  while  the  train  was  approaching  a  station,  in  violation 
of  a  known  rule  of  the  company,  is  not  entitled  to  recover.3 
But  where  a  rule,  forbidding  passengers  on  a  railroad  train  to 
ride  on  the  platform  of  a  car,  is  generally  disregarded  by  both 
passengers  and  trainmen,  it  can  not  be  said  that  to  so  ride  is  a 
violation  of  "  a  rule  of  a  corporation,"  within  the  meaning  of 
a  policy  of  accident  insurance.4  Under  the  defense  that  the 
accident  occurred  u  while  or  in  consequence  of  violating  the 
laws  or  the  rules  of  a  company,'"  within  an  exception  in  the 
policy,  it  may  be  shown  that  there  was  a  general  and  well- 
known  custom  of  doing  the  act  complained  of  at  the  time 
and  place  of  the  injury.5 

The  fact  that  a  policy  insures  a  person  with  reference  to  a 
particular  employment,  and  provides  that  the  insurer  shall  be 
exempt  from  liability  for  injuries  resulting  from  a  violation  of 
the  rules  of  employment,  does  not  impose  on  the  insurer  the 
duty  of  informing  the  assured  as  to  the  existence  of  such  rules, 

'Fidelity  &Cas.  Co.  v.  Teter(IncL),  3Bon  v.   Assurance  Co.,  56  Iowa 

36  N.  East.  Rep.  283;  Rogers  v.  Ins.  664. 

Co.,  121  Ind.  571:   23  N.  East.  Rep.  *  Marx  v.   Travelers'  Ins.   Co.,   39 

498;    Ins.   Association  v.  Kryder,  5  Fed.  Rep.,  321. 

Ind.  App.  430;  31  N.  East.  Rep.  851.  "Duncan  v.  Association,  13  N.  Y. 

'2  Tooley  v.  Assurance  Company,  3  Supp.  620. 
Biss.  399,  supra. 


ACCIDENT    INSURANCE.  7tt5 

but  the  insured  is  bound  to  inform  himself.  Such  an  exemp- 
tion must  be  specially  pleaded  by  the  insurer  before  it  can  be 
made  available  as  a  defense;  and,  if  it  be  not  pleaded,  the  court 
may  exclude  any  evidence  offered  to  establish  the  rule  which 
it  is  claimed  has  been  violated.1 

§  3S7.  Walking  on  railway  track,  etc. — Where  an  insur- 
ance policy  contains  prohibitions  against  walking  on  a  railway 
track,  it  means  walking  along  a  railway  track  in  the  ordinary 
sense — using  it  as  a  highway.  The  mere  using  of  a  track  for 
the  Width  of  a  street,  or  the  crossing  of  a  track  at  a  street- 
crossing,  are  not  the  kinds  of  k-  walking  on  the  track  "  against 
which  prohibitions  are  leveled.  Common  language  distin- 
guishes between  standing,  walking  and  crossing.  To  stand  or 
to  walk  on  a  road-bed  implies  some  sensible  duration  of  the 
act,  and  does  not  describe  a  mere  crossing  for  a  justifiable 
purpose.2  An  insurance  did  not  cover  injuries  happening  to 
the  insured  while  "  walking  or  being  on  the  road-bed  or  bridge 
of  any  railway/'  The  insured  stepped  off  a  railway  train 
when  it  came  to  a  stop  on  a  drawbridge  at  night,  fell  through 
a  concealed  hole  in  the  bridge,  and  was  killed.  The  court 
held  that  the  accident  was  covered  by  the  policy,  because  the 
evident  intent  of  the  prohibition  was  to  guard,  not  against  in- 
jury resulting  from  a  defective  road-lied  or  detective  railway 
bridge,  but  against  the  danger  of  injury  from  trains  passing 
thereon.  The  court  said:  "If  the  design  was  to  apply  the 
Language  to  bridges  defectively  constructed  or  out  of  repair,  it 
would  not  have  been  restricted  to  railway  bridges.  It  would 
have  included  all  bridges,  both  fool  and  wagon.  The  purpose 
is  not  to  avoid  liability  for  injuries  resulting  from  being  on 
bridges  unsafe  in  themselves.  The  manifest  intent  is  to  ex- 
empt from  responsibility  for  damages  caused  by  collision  with 
trains  moving  thereon."  J  Where  an  insured  was  struck  by  a 
locomotive  engine  while  he  was  walking  along  a  railroad  track, 
it  was  held  that  he  had  not  used  due  diligence  for  his  protec- 
tion.4 Where  one  who  is  running  rapidly  toward  an  ap- 
proaching  train    for   the    purpose  of   getting    the    mail-bags, 

1  Standard  Life  v.  Jones,  94   Ala,         Burkhard  v.  Ins.  Co.,  102  Pa  St. 
484;  L0 So.  Rep.  580.  262;  see   Dougherty    r.   In-.  Co.,  154 

-'  Wright  v.  Ins.  Co.,  29  Up.  Can.    Pa,  st.  885;  36  At  1.  Rep.  789. 
C.  I'.  221;  Duncan  v.  Association,  (8       '  J  Am.  I..  Etep.  595;  Tattle  v.  Ins. 
N.  Y.  Supp.  020.  Co.,  134  Mass.  175;  LoveH  v.  [ns.  Co., 


746  ACCIDENT   INSUKANCE. 

stumbles  as  he  nears  the  track,  and  falls  against  the  engine, 
the  injury  is  clearly  not  "  intentional "  within  the  exception 
of  an  insurance  policy;  nor  can  it  be  construed  as  the  result  of 
"  walking  or  being  on  a  railroad  track,"  or  of  "  voluntary  ex- 
posure to  unnecessary  danger,"  within  the  meaning  of  other 
exceptions.1  Where  a  policy  provides  that  walking  or  being 
on  the  road-bed  of  any  steam  railway  are  hazards  not  covered 
by  it,  and  the  insured  while  walking  between  the  tracks  of  the 
railway,  was  struck  by  an  engine  and  killed,  the  company  is 
not  liable.2 

§  388.  Intentional  injuries  inflicted  by  the  insured  or 
any  other  person. — Policies  of  insurance  usually  contain  a 
clause  providing  that  no  claim  shall  be  made  under  it  where 
the  death  of  the  insured  is  caused  by  "  intentional  injuries  in- 
flicted by  the  insured,  or  any  other  person."  If  the  insured  is 
murdered  his  death  is  caused  by  intentional  injuries  inflicted 
by  another  person,  and  no  recovery  can  be  had  under  such  a 
policy.3  But  all  such  special  provisions  in  a  policy  are  to  be 
strictly  construed,  and  courts  have  been  very  loth  to  exempt 
accident  companies  under  them  unless  the  case  came  within 
their  exact  language.  A  policy  contained  this  condition : 
"  This  insurance  shall  not  be  held  to  extend  to  disappearances, 
or  to  any  cause  of  death,  or  personal  injury,  unless  the  claim- 
ant under  the  policy  shall  establish  by  direct  and  positive  proof 
that  the  said  death  or  personal  injury  was  caused  by  external 
violence  and  accidental  means,  and  was  not  the  result  of  design 
either  on  the  part  of  the  insured  or  of  any  other  person."  The 
insured  was  struck  under  the  eye  by  a  man  who  was  attempt- 
ing to  blackmail  him,  and  there  were  circumstances  tending  to 
show  that  the  assailant  did  not  intend  to  kill  him.  The  insured 
died  about  thirty-five  days   afterward   from  the  effect  of  the 

3  Ins.  L.  J.  877;   5  Ins.  L.  J.  559;  38    Mo.  App.    640;    Fischer  v.    Ins. 

Travelers'  Ins.  Co.  v.  Jones,  80  Ga.  Co.,  77  Cal.   246;  19  Pac.   Rep.   425; 

541;  7  S.  East.  Rep.  83;   Cornish   v.  Hutchcraft  v.  Ins.  Co.,  87  Ky.  301;  8 

Ins.  Co..  23  L.  Rep.  Q.  B.  D.  453.  S.  W.  Rep.  570;  38  Alb.  L.  J.  68;  De 

1  Equitable  Ace.  Ins.  Co.  v.  Osborn,  Graw  v.  Accident  Society,  51  Hun 
90  Ala.  201;  9  So.  Rep.  869.  143;  Travelers'  Ins.  Co.  v.  McCarthy, 

2  Piper  v.  Ace.  Association  (Mass.),  15  Colo.  351;  25  Pac.  Rep.  713;  Gresh- 
37  N.  E.  Rep.  759.  am   v.   Ins.    Co.,  87   Ga.    497;  13   S. 

3  Travelers'  Ins.  Co.  v.  McConkey,  East.  Rep.  752;  Guldenkirch  v.  As- 
127  U.    S.  661;  8  Sup.  Ct.  Rep.  1360;  sociation,  25  N.  Y.  St.  Rept'r  945. 

17  Ins.  L.  J.  585;  Phelan  v.  Ins.  Co., 


ACCIDENT    INSURANCE.  747 

blow.  In  an  action  on  the  policy  the  following  instruction  was 
given  by  the  court:  "  If  the  death  of  (the  insured)  was  caused 
by  a  blow  dealt  him  by  (the  assailant),  that  would  not  prevent 
plaintiffs  from  recovering  in  this  action,  if  you  believe  from 
the  evidence  that  when  (the  assailant)  inflicted  such  blow  he 
did  not  mean  to  kill  (the  insured)."  The  supreme  court  ap- 
proved the  instruction,  and  held  that  the  condition  of  the  pol- 
icy, so  far  as  it  applied  to  the  circumstances  of  the  case,  merely 
stated  that  the  death  should  not  be  the  result  of  the  design  of 
any  person;  that  is,  that  it  must  not  be  caused  by  the  act  of 
one  whose  design  was  to  cause  death  by  the  act,  and  that  the 
condition  did  not  include  a  case  where  a  blow,  not  intended  to 
kill,  unfortunately  and  undesignedly  produced  death.1  Whether 
an  injury  was  intentionally  inflicted  is  a  question  of  fact  to  be 
inferred  from  the  act  itself  and  from  the  surrounding  circum- 
stances." 

A  soldier  was  shot  by  a  deputy  sheriff  who  attempted  to 
arrest  him.  There  was  a  conflict  of  evidence  on  the  point 
as  to  whether  the  officer  knew  at  the  time  of  the  shoot- 
ing that  the  party  shot  was  the  soldier,  and  also  as  to 
whether  the  killing  was  in  self-defense.  The  court  held  that, 
if  the  officer  did  not  know  that  the  person  he  fired  at  was  the 
soldier,  and  did  not  intend  to  kill  the  soldier,  it  could  not  be 
said,  as  a  matter  of  law,  that  he  had  lost  his  life  by  the  de- 
sign of  the  officer,  within  the  meaning  of  an  accident  policy 
insuring  him,  but  providing  that  "the  insurance  shall  nut  ex- 
tend to  any  case  of  death  or  personal  injury  unless  the  claim- 
ant establish  by  direct  and  positive  proof  that  the  death  or 
injury  was  caused  by  external  violence  and  accidental  means. 
and  was  not  the  result  of  design,  either  on  the  part  of  the 
deceased,  or  any  other  person."  : 

1  Richards  v.  Ins.  Co.,  89Cal  170;  titter  was  killed  in  a  house  of  ill- 
26  Pac.  Rep.  T*')'-':  see  Blackstone  v.  fame  in  Los  Angeles,  by  a  pistol  shot 
Ins.  Co.,  74  Mich.  592.  fired  by  one  Berry,  a  deputy  sherifl 

2  The  beneficiary  of  a  contract  may  <>r  Los  Angeles  county.  It  seems 
not  recover  where  the  death  of  the  that  the  captain  of  the  company  to 
assured  was  intentionally  caused  by  which TTtter  belonged  learned  <>l'  his 
his  act.  Insurance  <  '<>.  v.  Armstrong,  whereab  »ul  ;.  an  i  t  >lpgrapb  id  I  i  I  'i  ■ 
117  U.  S.  5'.)!);  Schreiner  v.  High  sheriff  a  description  of  Utter,  stating 
Court,  35  111.  App.  576.  t  li.it    he  was  a   deserter.     This   tele. 

;  rtter\.  Ins.  Co., 65  Mich.  545;  32  gram  was  shown  to  Berry,  and  he 
N.   W.   Rep.  812;  10  Ins.   L.  J.   53'3.    was   instructed  by  the  under-sheriff 


748 


ACCIDENT    INSURANCE. 


It  will  not  be  presumed  that  an  insured  was  murdered  from 
the  mere  fact  that  he  was  found  dead  on  a  public  highway 


to  arrest  Utter.  Berry,  without  any- 
other  warrant,  process,  or  other 
authority-,  went  to  this  house  where 
Utter  was,  and  shot  and  instantly 
killed  him.  The  facts  as  to  the  kill- 
ing were  conflicting,  as  stated  by  the 
different  witnesses.  There  was  no 
dispute  with  regard  to  the  fact 
that  the  officer  intended  to  s,hoot 
and  intended  to  inflict  bodily  injury 
upon  some  person.  The  officer  de- 
posed that  he  knew  it  was  Utter  when 
he  fired,  but  the  evidence  of  a  wit- 
ness who  was  present,  tended  very 
strongly  to  show  that  he  did  not  know 
it  was  Utter  he  had  shot,  and,  after 
he  came  into  the  room,  thought 
another  man  was  Utter,  until  in- 
formed by  this  man  that  he  had  shot 
Utter  and  "had  killed  his  man." 
The  court  said:  "It  is  claimed  by 
the  counsel  for  the  plaintiff  that  the 
'design'  mentioned  in  the  policy 
must  be  considered 'as  a  design  to  kill 
Utter,  and  that  there  was  evidence 
in  the  case  sufficient  to  go  to  the  jury 
tending  to  show  that  the  act  that 
caused  the  death  of  Utter  was  not 
done  with  the  design  of  killing  him. 
In  other  words,  if  Berry  went  to  the 
house  where  Utter  was,  not  with  the 
intention  of  killing  him,  but  for  the 
purpose  of  arresting  him,  and  when 
the  door  was  opened,  by  reason  of 
Utter's  drawing  a  pistol,  or  any  other 
cause,  he  fired,  not  knowing  it  was 
Utter,  although  the  death  of  Utter 
was  caused  thereby,  and  Berry  meant 
to  kill  whoever  it  was,  it  can  not  be 
held  that  the  death  of  Utter  was 
caused  by  design;  that  when  the  de- 
sign was  to  kill,  it  must  also  be  a  de- 
sign to  kill  Utter,  then  formed  in  the 
mind,  and  into  nt'onally  carried  out 
by  the  act.  If  a  person  should  draw 
a  pistol  in  a  crowded  street,  and  de- 


liberately fire  the  same,  with  the  in- 
tent of  killing  some  one,  or  with  a 
reckless  disregard  of  human  life,  and 
a  person  was  killed  or  wounded, 
would  such  killing  or  wounding  lie  an 
accident,  h  i  the  meaning  of  this  policy 
or  would  it  be  by  the  design  referred 
to  therein?  There  would  undoubt- 
edly be  a  design  to  kill  or  wound 
some  one,  but  no  design  to  kill  or 
wound  the  particular  person  injured. 
Suppose  that,  for  the  purpose*  of 
plunder,  persons  arrange  to  throw  a 
passenger  train  off  a  railroad  track, 
knowing  that  such  act  is  liable  to  kill 
or  injure  some  one,  but  having  no 
malice  against  any  individual  there- 
on, or  any  design  to  kill  any  partic- 
ular person,  and  the  train  is  derailed 
and  the  assured  killed,  can  it  be  said 
that  his  death  was  not  accidental, 
under  this  policy,  but  by  the  design 
of  some  person  ?  The  argument  may 
be  carried  further.  Suppose  one  fires 
a  pistol  in  the  air.  He  fires  by  design 
but  does  n  >t  intend  to  kill  any  one. 
The  shot  strikes  the  assured,  and  kills 
him.  The  act  which  causes  the  death 
— the  shooting  of  the  pistol— is  de- 
signed, and  therefore  not  accidental, 
but  the  killing  is  certainly  accidental 
and  not  designed.  If  the  pistol  is 
fired  at  one  man,  and  hits  another,  is 
it  any  less  accidental,  as  far  as  the 
person  hit  is  concerned,  to  the  mind 
of  the  person  who  does  the  shooting  ? 
And,  if  the  shot  is  fired  at  the  assured 
in  the  belief  that  he  is  another  man, 
is  not  the  character  of  the  act  the 
same  ?  If  one  designedly  roll  a  stone 
down  a  mountain  side  with  no  intent 
to  injure  any  one,  and  in  its  course  it 
crush  a  man,  it  is  an  accident.  If  it 
were  purposely  rolled  down  to  crush 
one  man,  and  it  is  deflected  from  the 
course  intended,  and  it  kills  another, 


ACCIDENT   INSURANCE. 


749 


with  a  pistol  bullet  through  his  heart,  but  such  inferences  as 
to  the  cause  of  his  death  may  be  drawn  as  the  surrounding  cir- 


is  it  not  equally  an  accident?  The 
design  or  purpose  was  not  to  kill  the 
one  injured,  because  it  was  intended 
to  kill  another  and  not  him.  The 
criminal  intent  of  the  one  putting  the 
stone  in  motion  may  render  him 
guilty,  and  respon  rible  for  the  actual 
result,  though  not  intended:  yet  the 
death  of  the  person  thus  killed  must 
be  considered,  as  far  as  he  is  con- 
cerned, an  accident,  as  his  death  was 
not  intended  by  any  one. 

It  seems  to  me  that  the  design  in- 
tended by  the  terms  of  this  policy 
must  be  the  design  that  intended  the 
actual  result  accomplished,  and  not 
the  design  of  the  act  itself,  which  act 
resulted  in  the  killing  of  one  contrary 
to  the  design  of  the  act.  If,  when 
Berry  fired  this  shot,  he  did  not  know 
the  man  he  fired  at  was  Utter,  and 
did  not  intend  to  kill  Utter,  it  can 
not  be  said  that  Utter  lost  his  life  by 
the  design  of  Berry.  Nor  can  it  be 
held,  as  a  matter  of  law,  that  Utter 
was  engaged  in  an  unlawful  act, 
within  the  meaning  of  this  policy.  If 
he  had  been  shot  in  the  act  of  desert- 
ing, this  claim  might  be  made  with 
some  reason  and  propriety,  but  such 
was  not  the  cas  ■  here.  Neither  was 
he  shot  because  he  was  a  deserter,  nor 
because  he  was  in  a  house  of  ill-fame. 
He  wasshot,  if  Berry  is  to  be  believed, 

because     he      did     Hot     throw      up     his 

hands  when  commanded  to,  and  was 
in  the  act  ,,f  drawing  a  pistol.  He 
was  killed,  if  Branagan  is  to  be  be- 
lieved, without  provocation,  and  in  a 
wanton   and  murderous  manner,  as 

soon  as  his  head  appeared  in  thedoor. 

Whether  he  was. doing  anything  un- 
lawful at  the  time  of  the  shooting 
Was  also  a  question  for  the  jury,  to  be 
determined  by  them  under  all  the 
circumstances  of  the  ■ 


If,  on  being  refused  admittance 
after  rapping  on  the  door,  the  officer 
had  fired  through  the  door,  and  killed 
Utter,  it  could  not  be  claimed  that 
Utter  was  killed  by  design,  or  be 
he  was  engaged  in  any  unlawful  act; 
nor  if  Berry  fired  at  the  first  head  he 
saw  poked  out  of  the  door,  not  know- 
ing or  caring  who  it  was,  can  it  be 
held  that  the  death  was  by  design 
against  Utter,  or  in  consequence  of 
any  unlawful  act  on  his  part.  The 
clauses  in  the  policy  requiring  direct 
and  positive  proof  that  the  death  was 
caused  by  external  violence  and  acci- 
dental means,  and  was  not  the  result 
of  design,  either  on  the  part  of  the  in- 
sured or  of  any  other  person,  can  not 
be  allowed  to  govern  the  courts  in 
cases  of  this  kind.  The  intent  of 
Berry  is  locked  within  his  own  breast. 
and  can  only  be  determined  by  his 
own  evidence,  or  the  inferences  to  be 
drawn  from  his  acts,  which  latter 
would  be  in  the  nature  of  circum- 
stantial proof.  If  Berry  himself  had 
been  killed,  it  would  have  been  im- 
possible.' by  direct  ami  positive  proof,' 

to  show  what  his  real  design  was,  and 
it  would  also  be  manifestly  against 
the  policy  of  the  law.  and  diametric- 
ally opposed  to  justice,  to  allow  his 
own  testimony  of  his  own  motives, 
however  unsatisfactory  it  might   be. 

t<>  lie  control  line;,  when  all  the  facte  of 
his  actions  and  language  at  the  time 
contradicted  his  positive  assertions  of 

hi-    intent    upon    the    trial.       If    this 

clause  can  be  allowed  to  stand,  any 
person  accidentally  killed,  when  no 

one  is  by,  is  debarred  from  the  benefit 

of  his  insurance.    Circumstances  may 

plainly  and  almost  certainly  indicate 

that  he  was   killed   i>\  accident,  an  1 

yet  00  positive  and  direct  proof  can 
be  furnished.      If  an  accident  happ<  n 


750 


ACCIDENT    INSURANCE. 


cumstances  will  justify.1  It  is  not  to  be  presumed  that  an  in- 
jury was  self-inflicted,  or  that  it  was  intentionally  inflicted  by 
any  other  person ;  the  burden  is  on  the  society  to  establish 
such  defenses."     The  fact  that  a  person  insured   engaged  in  a 


upon  a  railroad  by  the  fault  of  one  of 
its  employes,  who  is  killed  by  the 
accident,  his  design  in  causing  such 
accident  can  not  be  shown  by  direct 
and  positive  proof,  and  the  benefi- 
ciaries of  an  assured  person  killed  by 
such  accident  can  not  recover.  The 
design  of  the  person  responsible  for 
the  killing  can  in  no  case  be  directly 
and  positively  proved  except  by  his 
own  evidence  or  admissions.  Courts 
will  not  permit  the  course  of  justice, 
upon  trials  before  them,  to  be  stipu- 
lated or  contracted  in  such  manner 
as  to  defeat  the  ends  to  be  subserved 
by  such  trials.  The  parties  to  the 
contract  can  not  agree  to  oust  the 
courts  of  jurisdiction  over  such  con- 
tract. Tlie  operation  of  this  clause, 
requiring  direct  and  positive  proof,  in 
many  cases  would,  in  effect,  preclude 
the  court  from  jurisdiction  and  bar 
recovery.  If  they  can  make  this 
agreement  they  can  also  stipulate 
that  the  evidence  must  come  from 
certain  persons,  or  make  any  agree- 
ment they  see  fit,  controlling  and 
directing  the  course  of  proceeding 
upon  the  trial.  They  may  contract 
in  relation  to  a  condition  prec- 
edent before  bringing  suit,  or  in 
relation  to  anything  going  to  the 
remedy,  but  not  to  the  right  of  re- 
covery itself.  Wood  on  Ins.,  750. 
Circumstantial  evidence  is  regarded 
by  the  law  as  competent  to  prove  any 
given  fact;  and  sometimes  it  is  as 
cogent  and  irresistible  as  direct  and 
positive  testimony.  The  case  should 
have  been  submitted  to  the  jury.  The 
'  design '  mentioned  in  the  policy 
must  be  considered  a  design  on  the 
part  of  Berry  to  kill  Utter;  and  if,  at 
the  time  he  fired  the  pistol  shot,  he 


did  not  intend  to  kill  Utter,  or  did 
not  know  that  the  man  he  was  shoot- 
ing was  Utter,  there  is  nothing  in  the 
present  record  to  prevent  a  recovery 
by  the  plaintiff." 

1  Travelers'  Ins.  Co.  v.  McConkey, 
127  U.  S.  661;  8  Sup.  Ct.  Rep.  1360; 
17  Ins.  L.  J.  585;  Washburn  v.  Soci- 
ety-, 10  N.  Y.  Supp.  366. 

2  Peck  v.  Accident  Association.  52 
Hun  255;  Mallory  v.  Ins.  Co.,  47  N. 
Y.  52;  Wright  v.  Ins.  Co.,  29  Up. 
Can.  C.  P.  221;  Washburn  v.  Society. 
10  N.  Y.  Supp.  368.  In  an  action 
on  an  accident  policy,  it  appeared 
that  the  assured  was  found  dead 
in  the  back  room  of  a  house,  shot 
through  the  heart.  He  had  been 
dead  about  half  an  hour,  and  there 
were  no  powder  marks  on  his 
flesh  or  clothing.  A  door  opposite 
to  where  his  body  lay  opened  into 
another  room,  hi  which  was  found, 
mortally  wounded,  a  woman,  who 
had  b^en  shot  with  a  pistol  ball  in  the 
side,  and  whose  flesh  and  clothing 
were  powder  burned.  Near  her  was  a 
pistol,  but  it  was  not  shown  whether 
loaded  or  not,  nor  was  it  shown  that 
the  wounds  in  the  two  bodies  were 
made  by  this  or  a  pistol  carrying  the 
same  sized  ball.  She  had  been  the 
mistress  of  assured  for  some  time, 
and  had  lived  with  him  as  such,  but 
it  was  not  shown  whether  or  not  tins 
was  notorious  and  open.  The  day 
previous,  assured  had  stated  to  a 
friend  that  he  was  tired  of  the 
woman,  and  intended  to  break  with 
her  next  summer  when  she  went 
home  to  visit  her  family.  As- 
sured was  a  quiet,  timid  man,  of 
good  reputation  for  peace,  and  did 
not  intimate  to  this  friend  that   he 


ACCIDENT    INSURANCE.  751 

fight,  though  he  liimself  was  not  the  aggressor,  brings  the  in- 
juries received  by  him  within  a  condition  of  his  policy,  provid- 
ing that  it  would  not  cover  accidental  injuries  resulting  from 
or  caused  directly  or  indirectly,  wholly  or  in  part,  by  fighting.1 
It  makes  no  difference  in  such  a  case  whether  the  slayer  is 
sane  or  insane.2 

§  389.  Intoxication— Under  the  influence  of  liquor.— A 
provision  in  a  policy  exempting  the  insurer  from  liability  for 
any  injury  which  might  happen  to  the  assured  while  intoxi- 
cated, or  in  consequence  of  his  having  been  under  the  influ- 
ence of  intoxicating  liquor,  is  sufficient  to  exclude  liability 
for  all  injuries  suffered  while  the  assured  was  intoxicated, 
whether  the  intoxication  contributed  to  the  injury  or  not.  A 
policy  provided,  " No  claim  shall  be  made  under  this  policy 
where  the  death  or  injury  may  have  happened  while  the  in- 
sured was,  or  in  consequence  of  his  having  been,  under  the  in- 
fluence of  intoxicating  drinks."  The  insured  was  accidentally 
shot,  while  intoxicated,  by  a  drunken  companion,  with  whom 
I13  had  been  drinking.  It  was  held  that  the  policy  was 
avoided,  that  the  provision  avoided  liability,  if  the  insured 
was  in  the  condition  of  intoxication,  without  regard  to 
whether  it  had  any  agency  in  producing  the  death  or  injury. 
The  court  said  :  "  The  cases  which  hold  that  the  insurer  must 
show  that  the  relation  of  cause  and  effect  exists  between  the 
thing  prohibited  and  the  death  or  injury,  have  no  application 
to  the  clause  under  consideration,  as  it  avoids  liability  if  the 
insured  was  in  a  certain  prohibited  condition,  without  regard 
to  whether  it  had  any  agency  in  producing  death  or  injury. 
By  putting  himself  under  the  influence  of  liquor,  he  deprived 
the  company  of  tin'  security  it  would  otherwise  have  had  that 
he  would  do  nothing  to  expose  his  life  or  health  unnecessarily 
to  injury."  The  limitation  in  the  policy  related  to  the  con- 
used,  or  intruded  m  use,  any  violence  tion  of  facf  arose  from  the  evidence 
toward  her.  The  court  charged  thai  thai  assured  was  either  killed  l>\  the 
the  presumption  of  law  was  that  as-  woman  or  committed  suicide.  A.cci- 
sured  did  not  commit  suicide,  and  dent  Jns.  Co.  v.  Bennett,  90  Term. 
was  not  murdered,  but  that  these  856;  16S.  w.  Rep.  738. 
presumptions  might  be  overcome  by  'TJ.  S.  Association  v.  Millard,  c; 
facts    showing    the  contrary,   which    111.  App.  1  18. 

the    jury    were    to    consider.     This       'Gresham  v.  Ins.  Co.,87  Ga.   197. 
charge  was  correct,  as  no  presump- 


752  ACCIDENT   INSURANCE. 

dition  of  the  insured,  not  to  the  cause  which  might  pro- 
duce his  death.  The  intention,  evidently,  was  to  limit  the 
liability  of  the  company  and  not  to  incur  any  responsibility 
when  the  injury  occurred  while  the  insured  was  directly  under 
the  influence  of,  or  where  the  result  was  remotely  produced 
by,  intoxicating  drinks.1  If  there  is  an  inconsistency  between 
the  terms  of  the  application  for  the  policy  and  the  policy 
itself,  excepting  injuries  resulting  from  intoxication  or  received 
while  under  the  influence  of  intoxicants,  the  policy  must 
control;  but  where  the  application  uses  the  words,  "  any  acci- 
dental injury  which  may  happen  to  me  while  under  the  in- 
fluence of  intoxicating  drinks,  or  in  consequence  of  having 
been  under  their  influence,"  and  the  policy  excepts  injuries 
"  happening  to  the  insured  while  intoxicated,  or  in  conse- 
quence of  having  been  under  the  influence  of  any  intoxicating 
drink,"  there  is  no  material  difference  between  the  two;  and 
it  is  not  necessary,  in  order  to  make  out  the  defense,  that 
intoxication  should  have  contributed  to  the  injury.2 

§  390.  In  an  action  on  an  accident  policy  to  recover  for  the 
death  of  the  insured,  where  the  defense  is  that  the  accident 
was  caused  by  the  deceased  falling  out  of  a  window  while 
drunk,  it  is  not  error  to  refuse  to  admit  testimony  that  on  a 
previous  occasion  the  deceased,  while  drunk,  attempted  to 
jump  from  the  window.  As  a  general  rule  it  is  inadmissible, 
even  where  the  issue  is  whether  a  person  did  a  particular 
thing,  to  put  in  evidence  the  fact  that  he  did  a  similar  thing 
at  some  other  time; 3  and  the  issue  of  self-destruction  is  entirely 
different  from  the  one  presented  in  such  a  case.  In  such  an 
action  testimony  of  a  witness  that  shortly  before  the  accident 
the  deceased  did  not  appear  to  be  drunk,  that  she  found  him 
lvino-  on  the  ground  insensible  early  the  next  morning,  when 
a  physician  was  immediately  sent  for;  the  testimony  of  the 
attendant  physician  that  when  he  first  saw  the  deceased  he 
thought  he  was  drunk,  but  that  this  idea  on  examination  was 
quickly  dispelled;  also  testimony  that  the  deceased  took  a 
glass  of  beer  just  before  going  home,  and  was  not  drunk  then, 

'Shaderv.  Assurance  Co.,  5  Thomp.  Ala.  434;  Sharler  v.  Assurance  Co., 

&  C.    643;    affirmed  66  N.   Y.    441;  5    Life    &    Ace.    Ins.    Reps.   331;    5 

Standard  Life  v.  Jones,  94  Ala.  434;  Thomp.  &  Cook  (N.  Y.)  643. 
10  So.  Rep.  530.  8 1  Whart.  Ev.  §  29. 

'    2  Standard  Ins.    Co.    v.    Jones,    94 


ACCIDENT    INSURANCE.  753 

that  he  had  only  had  three  glasses  of  beer,  and  never  drank 
whisky — is  sufficient  to  sustain  a  finding  that  the  deceased 
was  not  drunk  at  the  time  of  the  accident.1  A  witness  may 
state  whether  or  not  a  person  had  the  appearance  of  being- 
intoxicated,  for  that  would  be  a  statement  of  a  fact.  Sanity, 
intoxication,  and  the  state  of  health  are  facts  which  may  be 
proved  by  appearances.2  It  is  competent  for  the  company  to 
show  what  insured's  condition  was  when  he  received  the 
injuries,  and  in  order  to  do  this  witnesses  may  be  asked 
whether  he  impressed  them  as  being  intoxicated;  whether  he 
was  drunk  or  sober;  and  whether,  in  their  judgment,  he  was 
as  capable  of  taking  care  of  himself  as  though  he  were  sober.3 
A  provision  in  an  accident  policy  that  none  of  its  conditions 
can  be  waived  by  any  agent  of  the  company  is  valid,  and  a 
condition  that  the  insurance  does,  not  cover  a  death  resulting 
from  intoxication  is  not  waived  because  the  agent  who  received 
and  filled  out  the  application  knew  that  the  applicant  was  an 
intemperate  man,  though  the  application  stated  that  his 
habits  were  correct  and  temperate.4  Evidence  that  when  last 
seen,  late  one  night,  insured  was  more  or  less  drunk,  and 
some  distance  from  his  home,  near  which  were  a  bridge  with 
low  rails,  and  lowlands  then  covered  by  the  river,  is  not  so 
conclusive  that  he  met  his  death  while  drunk  as  to  warrant  a 
non-suit.5 

§  391.  Fits,  vertigo,  fainting. — One  who  is  subject  to 
faintings  and  "  swimmings  in  the  head,"  is  not  on  that  account 
subject  to  "epileptic  or  other  fits,"  and  he  may  so  declare  in 
liis  application  for  insurance.*  An  insured,  while  at  a  railway 
station,  was  seized  with  a  lit  and  fell  forward  off  the  platform 
across  the  railway,  when  a  passing  train  ran  over  his  body  and 
killed  him.  It  was  held  that  the  train  passing  over  his  body, 
and  not  the  fit,  was  the  cause  of  his  death.7     AVhile  fording  a 

•Travelers'  Ins.  Co.  v.  Harvey,  *2  6  Conadeau  v.  Am.  Ace.  Co.  (Kv.i. 

Va.  949;  5  S.  E.  Rep.  658.  25  S.  W.  Rep.  6. 

2  Cook  v.  Ins.  Co..  84  Mich.  12;  47  6  Shilling  v.  Ins.  Co.,  1  Foster  &  Fin. 
N.  W.  Rep.  588;  state  v.  Pike,  49  N.  110:  see  g  870. 

H.  407.  '.Lawrence  v.  bis.  Co.,  7  L.  R.,  Q. 

3  Cook  v.  Ins.  Co.,  supra.  B.  Div.  216;  see  g  397. 

4  Cook  v.  Ins.  Co..  supra;  Newman 
v.  Association,  76  Iowa  36. 

48 


751  ACCIDENT    INSURANCE. 

river  an  insured  was  seized  with  a  fit,  fell  into  the  water  and 
was  drowned.  It  was  held  that  the  death  did  not  arise  from 
disease,  but  from  accidental  drowning.1  Under  a  provision  of 
an  accident  policy,  stating  that  the  risk  shall  not  extend  to 
"  accidental  injuries  or  death  resulting  from  or  caused,  directly 
or  indirectly,  by  fits,  vertigo  or  other  disease,"  an  accidental 
death  by  drowning  results  from  and  is  caused  indirectly  by  fits, 
vertigo,  or  other  disease  if  the  fall  into  the  water,  from  which 
drowning  takes  place,  is  caused  by  such  disease.2  A  provision 
in  an  accident  policy  stating  that  the  risk  shall  not  extend  to 
death  caused  by  bodily  infirmities  or  disease,  does  not  include 
fainting  produced  by  indigestion  or  lack  of  proper  food,  or  any 
other  cause  which  would  show  a  mere  temporary  disturbance 
or  enfeeblement.3  It  is  not  a  voluntary  exposure  to  obvious 
risk  for  an  insured  who  is  subject  to  faintings  and  "  swimmings 
in  the  head  "  to  go  driving  in  a  carriage  with  another  person.4 
An  insured,  who  was  subject  to  epileptic  fits,  was  found  dead 
in  a  plunge-bath  in  almost  a  standing  position.  There  was  an 
abrasion  between  his  eyes  and  a  bruise  on  one  side  of  his  head. 
His  physician  testified  that  his  hot  bath  had  probably  brought 
on  an  epileptic  attack,  because  of  his  peculiar  condition  of 
health  at  that  time,  and  that  the  fall  or  blow  which  caused  the 
abrasion  and  bruise  was  not  sufficient  to  have  caused  his 
death.  Upon  this  evidence  it  was  held  that  the  death  of  the 
insured  was  caused  by  disease  and  not  by  accident.5 

§  392.  Drowning. — When  it  is  shown  that  the  insured  died 
in  the  water,  it  is  for  the  jury  to  determine  whether  he  died 
from  the  action  of  the  water,  or  from  natural  causes.  The 
jur}r  may  reasonably  presume  that"  he  died  from  drowning, 
for  while  it  is  true  that  in  some  instances  death  occurs  in 
the  water  from  natural  causes,  as  from  apoplexy  or  cramp  in 
the  heart,  such  cases  are  rare  and  bear  a  small  proportion  to 
the  number  of  deaths  which  take  place  from  the  action  of 
the  water.  If  they  decide  that  he  died  from  the  action  of 
the  water  causing  asphyxia,  that  is  a  death  from  external  vio- 

1  Winespear  v.  Ins.  Co.,  6  L.  R.,  Q.  3  Manufacturers'  Indemnity  Co.  v. 

B.  Div.  42;  see  §§  392,  397;  see  Rey-  Dorgan.  58  Fed.  Rep.  945. 

nolds  v.  Ins.  Co.,  22  L.  T.  Rep.  N.  S.  4  Shilling  v.  Ins.  Co.,  1  Foster  &  Fin. 

820.  116. 

2 Manufacturers'  Indemnity  Co.  v.  5Tennant  v.  Ins.  Co.,  31  Fed.  Rep. 

Dorgan,  58  Fed.  Rep.  945.  322;  16  Ins.  L.  J.  476. 


ACCIDENT   INSURANCE.  755 

lence  within  the  moaning  of  a  policy — whether  he  swam  to  a 
distance  and  had  not  strength  enough  to  regain  the  shore,  or, 
on  going  into  the  water,  got  out  of  his  depth.  The  discharge 
of  water  from  the  lungs  of  a  person  who  has  been  drowned  is 
a  sufficient  showing  of  an  injury  by  some  outward  and  visible 
means,  and  external  and  material  cause  operating  upon  his 
person.'  The  action  of  the  water  in  cutting  off  or  stopping 
respiration  is  an  external  force,  and  is  the  immediate  cause  of 
death.  The  insured,  while  crossing  a  stream,  was  seized  with 
an  epileptic  fit,  fell,  and  was  drowned.  He  did  not  sustain  any 
personal  injury  to  occasion  death,  other  than  drowning.  His 
policy  covered  only  injury  or  death  "caused  by  some  outward 
and  visible  means,"  and  the  compan}^  was  held  liable.2  A 
policy  provided  that  they  should  only  be  liable  in  case  the 
death  or  injury  should  be  occasioned  by  some  external  and 
material  cause  operating  upon  the  person  of  the  insured. 
A\  nile  in  a  pool  about  one  foot  deep,  the  insured  became  sud- 
denly insensible  from  some  unexplained  internal  cause,  and 
fell  into  the  water  with  his  face  downward.  A  few  minutes 
afterward,  he  was  found  lying  dead  with  his  face  in  the  water, 
and  water  escaped  from  his  lungs  in  such  a  manner  as  to  prove 
that  he  had  breathed  after  falling  into  the  water.  The  imme- 
diate cause  of  his  death  was  suffocation  by  "the  water,  but.  the 
pool  being  shallow,  such  suffocation  would  not  have  taken 
place  had  he  not  been  incapable  of  helping  himself,  in  conse- 
quence of  his  insensibility.  It  was  held  that  the  company  was 
liable,  the  court  saying:  "  In  this  case  the  death  resulted  from 
the  action  of  the  water  on  the  lungs,  and  from  the  consequent 
interference  witli  respiration.  1  think  that  the  fact  of  the 
deceased  falling  in  the  water  from  sudden  insensibility  was  an 
accident,  and  consequently  that  our  judgment  must  he  for  the 
plaintiff." *  A  drowning  caused  by  a  temporary  trouble  to 
which  the  insured  was  not  subject,  but  which  was  entirely 
unusual  and  uncommon,  whereby  he  fell   into  the  water,  is 

lTrew  v.   Assurance  Co.,  (.t  W.  It.  'Winespear   v.   Ins.    Co..  43  L.  T. 

871;  30  L.  J.  Ex.li.  317;  6  Hurl.&N.  Rep.  460;  S  L.  R..Q.  B.   Div.    12;   13 

839;  Reynolds  v.  Insurance  <'<>..    is  L.  T.  Rep.  900;  22  Alb.  L.  J.  22 

W.   I:,    mi;  22    L.   T.  (N.  S.)   820;  •  Reynolds  v.  Las.  Co.,  22  L.  T.  R.  N. 

Tucker  v.  Mutual   Ben.  L.  Co..  4  N.  S.)   820;  all  the   justices  concurring. 

y.  Sup.  505;  50  Hun  ."><);  see  §§  373, 

379. 


756  ACCIDENT    INSURANCE. 

accidental,  within  the  meaning  of  a  policy  of  insurance.1 
Death  by  drowning  is  caused  indirectly  by  disease,  within  the 
meaning  of  an  accident  policy,  if  the  fall  into  the  water  was 
caused  by  such  disease.2  Where  the  insured  fell,  struck  his 
head  against  some  sharp  substance,  fell  into  the  water  and  was 
drowned,  his  death  was  held  to  have  been  caused  by  accidental, 
and  violent  means,  of  which  there  were  outward  and  visible 
signs.3  An  insured  was  a  healthy  man  and  a  good  swimmer. 
He  went  in  bathing,  became  disabled  from  cramps  or  other- 
wise, was  unable  to  swim,  cried  for  help,  but  not  securing 
timely  assistance,  sank  out  of  sight,  and  was  found  dead  the 
next  day  beneath  the  water.  It  was  held  that  his  death  was 
caused  by  "  outward  force  and  accidental  means."  4 

It  is  not  an  obvious  risk  or  a  voluntary  exposure  to  unneces- 
sary danger,  within  the  meaning  of  a  policy,  for  one  who  can 
swim  to  bathe  in  deep  water. 

§  392a.  A  member  of  a  benefit  society  left  his  home,  with 
soap  and  towel,  stating  that  he  intended  to  bathe  in  Lake 
Michigan,  which  was  about  a  mile  distant,  but  he  never  re- 
turned. His  clothing  and  money  were  found  on  the  shore,  and 
there  were  footprints  leading  to  the  water's  edge.  No  reason 
was  shown  why  he  should  abandon  his  family.  There  was 
evidence  that  the  lake  was  dangerous  at  that  place.  It  was 
held  that  there  was  sufficient  evidence  to  warrant  a  verdict 
that  the  member  was  dead.  Evidence  that  other  persons  had 
been  drowned  in  the  same  locality  was  slightly  relevant  to 
show  that  that  part  of  the  lake  was  dangerous.5 

Proof  that  the  body  of  the  insured,  whose  temper  and  cir- 
cumstances almost  precluded  the  idea  of  suicide,  was  found  in 
the  river  long  after  his  disappearance,  with  no  mark  of  vio- 
lence or  robbery,  made  a  case  for  the  jury  of  accidental  drown- 
ing.6 

1  Manufacturers'  Indemnity  Co.  v.  App.),  37  N.  East.  Rep.  1105;  see  Tis- 
Dorgan,  58  Fed.  Rep.  945.  dale  v.  Ins.  Co.,  26  Iowa  170;  S.  C, 

2  Idem.  28  Iowa    12;    Ins.  Co.  v.  Moore,  34 

3  Mallory  v.  Ins.  Co. ,  47  N.  Y.  52.  Mich.  42. 

4  Knickerbocker  Casualty  Ins.  Co.  6  Conadean  v.  Am.  Ace.  Co.  (Ky.), 
v.  Jordan,  7  Cin.  L.  Bull.  71.  25  S.  W.  Rep.  6. 

5  Supreme  Council  v.  Boyle  (Ind. 


CHAPTER  XXIX. 

ACCIDENT  INSUR^^CE. 

§  393.     Poison. 

394.  Inhaling  gas. 

395.  Death  or  disability  caused  by  any  surgical  operation  or  medical 

or  mechanical  treatment  for  disease. 

396.  Hernia,  erysipelas. 

397.  398.     Proximate  cause  of  the  death  of  the  insured. 

399.  Bodily  infirmity. 

400.  Loss  of  foot,  eye  or  hand. 
401-405.     Permanent  or  total  disability. 

406.     A  company  may  be  liable  for  sick  benefits,  though  not  liable 
for  the  death  of  the  insured. 

§  393.  Poison. — In  its  ordinary  meaning,  poison  is  a  sub- 
stance taken  internally,  seriously  injurious  to  health  and  often 
fatal  to  life;  and  "death  by  poison"  is  understood  to  mean 
death  arising  from  the  taking  of  poison.  Such  a  phrase  would 
never  be  applied  to  death  from  the  bite  of  a  rattlesnake  or 
from  blood  poisoning.  Death  by  inhaling  coal  or  illuminating 
gas  is  not  death  by  poison,  using  that  word  in  its  proper  sense. 
Such  gases  kill  by  shutting  off  the  supply  of  oxygen  and  pre- 
venting the  discharge  of  carbonic  acid  in  the  blood.  Death  is 
caused  in  this  way  by  suffocation,  choking  and  drowning,  and 
it  is  quite  as  proper  to  say  of  a  man  drowned  that  he  was  poi- 
soned by  water,  as  to  say  that  a  man  was  poisoned  by  gas." 
When  the  insured  died  from  malignant  pustule  produced  "  by 
the  inllictioii  of  animal  substances  upon  the  holy."  by  the  ac- 
cidental deposit  of  putrid  and  poisonous  animal  substance 
from  the  bodies,  skins  or  hides  of  animals  suffering  from  a 
pndiar  disease,  it  was  held  to  be  a  death  from  disease,  a 
"death  by  poison  in  any  manner  or  form,"  within  the  meaning 
of  the  exception  set  forth  in  the  policy,  and  not  a  death  from 
violent,  external  and  accidental  means.'' 

1  See  §  394.  ing  44  Hun  599:  3  N.   Y.   Supp. 

-Bacon  \.    \.(i.l,nt  Ass'n.  123  N.    Justices  O'Brien   an<l   Ruger  filed  a 
Y.  804;  2o  N.  East.  Rep.  3'J'J;  revers-   dissenting  opinion. 

(757) 


758  ,         ACCIDENT   INSURANCE. 

Where  a  contract  declares  that  it  shall  not  extend  to  any 
death  or  disability  which  may  have  been  caused  "  by  the  taking 
of  poison,"  it  is  not  necessary  that  the  poison  be  taken  with  an 
intent  to  produce  death,  in  order  to  defeat  a  claim  under  it. 
If  the  poison  be  innocently  taken,  and  without  any  knowledge 
of  the  injurious  effect  which  it  was  likely  to  produce  and  did 
produce,  the  effect  is,  doubtless,  accidental  so  far  as  the  person 
taking  it  is  concerned;  yet,  it  is  one  of  the  accidental  means 
expressly  excepted  from  the  contract.  An  insured,  mistaking 
birch  oil  for  milk  of  birch,  took  a  good  drink  of  it,  and  died 
from  its  poisonous  effects  within  twenty-four  hours.  Milk  of 
birch  is  a  harmless  beverage  very  closely  resembling  birch  oil 
in  color,  smell  and  taste,  and  the  insured  had  been  in  the  habit 
of  drinking  it.  The  contract  provided  that  its  benefits  did 
not  extend  "to  any  bodily  injury  happening  directly  or  indi- 
rectly by  the  taking  .of  poison; "  and  it  was  held  that  the  terms 
of  the  contract  did  not  extend  to  the  cause  of  the  death.1  In 
the  course  of  his  business,  a  plrysician  mixed  some  poison  with 
water  in  a  goblet,  and  afterward,  mistaking  the  mixture  for 
pure  water,  and  without  any  intention  of  taking  his  life,  drank 
it  and  died  from  its  effects.  It  was  held  that  the  proviso  in 
his  policy,  excepting  from  the  insurance  a  death  caused  "by 
the  taking  of  poison,"  was  not  limited  to  cases  of  intentional 
self  poisoning,  but  included  all  cases  in  which  death  was  so 
caused.2 

It  has  been  held  that  death  by  the  taking  of  poison  is  not 
effected  through  external,  violent  and  accidental  means,  within 
the  meaning  of  a  policy,  that  violence  can  not  fairly  be  said 
to  be  an  ingredient  in  the  act  of  taking  a  dose  of  poison,  al- 
though the  poison  may  be  violently  destructive  in  its  action.3 

1  Pollock  v.  Accident  Association,  tended  to   exempt  the  insurer  from 

102  Pa.  St.  230;  28  Alb.  L.  J.  518;  12  liability   for   accidents   arising  from 

Ins.  L.  J.  780;  48  Am.  Rep.  204;  Cole  the  intentional  use  of  poison.     This 

v.  Ins.  Co.,  61  Law  Times  Rep.  227;  case  was  overruled  in  Paul  v.   Ins. 

Michigan  Mutual  v.  Naugle,  130  Ind.  Co.,  112  N.  Y.  472. 

79;  29  N.  East.  Rep.  393.  3  Pollock    v.    Association,    supra; 

-Hill  v.  Ins.  Co.,  22  Hun  187,  Fol-  Bayless   v.    Ins.    Co.,   14   Blatchford 

lett,  J.,  dissenting  and  holding  that  143;  Hill  v.  Ins.   Co.,   22  Hun   187, 

the  word  "taking,"  in  this  connec-  Follett,   J.,  dissenting.     The  case  of 

tion,   means  an  intentional  taking,  Hill  v.   Ins.   Co.,  supra,  was  disap- 

either  with  or  without  intent  to  de-  proved  in  Paul  v.  Ins.  Co.,  45  Hun 

stroy  life,  and  that  this  phrase  is  in-  313,  on  this  point,  and  this  rule  was 


ACCIDENT   INSURANCE.  759 

But  this  rule  has  been  declared  to  be  too  strict,  and  against 
the  principles  governing  the  construction  of  the  terras  of  poli- 
cies of  insurance.1 

An  averment  in  an  answer  or  plea  to  an  action  on  an  accident 
insurance  policy,  that  by  its  terras  the  policy  was  not  to  •■ex- 
tend to  or  cover  death  resulting  from  or  caused  by  poison,  * 
*  *  or  contact  with  poisonous  substances,"  and  thai  -said 
alleged  injury  was  caused  by  poison  and  contact  with  poison- 
ous substances,"  is  bad  as  being  merely  an  argumentative 
denial  of  the  allegation  in  the  petition  that  the  death ''re- 
sulted alone  from  said  injury."  2 

§  394.  Inhaling  of  gas.— Where  one,  having  descended 
into  a  well,  dies  from  asphyxia  due  to  some  deadly  gas,  his 
death  is  not  due  to  "the  inhalation  of  gas,"  within  the  mean- 
ing of  the  terms  of  the  policy  excepting  death  so  caused  from 
its  indemnity,  for  such  exception  has  reference  only  to  a  vol- 
untary inhalation  of  gas.3  Such  an  exception  does  not  apply 
to  accidental  death,  caused  by  breathing,  while  asleep,  the  at- 
mosphere of  a  room  filled  with  illuminating  gas.  Gas  in  the 
atmosphere,  as  an  external  cause,  is  a  violent  agency  within  the 

declared  to  be  too  strict,  and  not  in  574:  Trew  v.  Ins.  Co.,  6  H.  &  N.  845- 

accordance  with  the  purposes  and  in-  Reynolds  v.  Ins.  Co.,  22  L.  T.  (N.  S.) 

tent  of  the  parties  and  the  proper  820;  McGrlinchey  v.  Casualty  Co.   80 

rules  of  interpretation  of  such  con-  Me.  251;  14  Atl.  Rep.   13;  Healy  v. 

tracts.     In  Penfolil  v.  Ins.  Co.,  85  N.  Association,  supra.    An  examination 

Y.  817,  it  was  held  that  a  condition  of  the  cases  cited   in  support  of  the 

of  a  life  policy,  avoiding  it  if  the  in-  text  will  show  that  the  decisions  were 

sured  ••died  by  his  own  hand  or  act.  really  placed  on  other  grounds. 
voluntarily    or   otherwise."    did    not        'Paul  v.   Ins.   Co.,    112    X.  Y.  472: 

exempt  the  company  from  liability  45  Hun  313;    Reynolds  v.   Ins.  Co. 

in  case  of  a   purely  accidental   death  22   L.    T.  (X.    N.),s2l>:  Martin   v.   Ins. 

caused  by   poison  taken  by  the  as-  Co.,  I  Fost.  &  Fin.  505;  Winspear  v. 

sured  through  mistake  or  ignorance.  Ins.  Co.,  6  Q.  B.  D.  42;  (3  1...).  Rep. 

See    Equitable   Life  \.   Paterson,  41  459;  McGlinchey  v.  Casualty  Co.  80 

Ga.  338;  Bealey  v.  Association.   138  Me.  251;  Bealey  v.  Association,   133 

111.  556;  25  X.  East.  Rep.  52;  Coll  v.  111.  556;  25  \.  East.   Rep.  52;  Pickett 

[hs.  Co.,54N.  Y.  595;  Dilleberv.  Ins.  v-   '"-•  Co.,   Ml  Pa.  St.  79;  22  Atl. 

Co.,  6!»  X.  Y.  256;  Bailey  v.  Ins.  Co..  Repi   871;   Martin   v.    Association,    16 

80  N.  Y.  21.     The  means  ,,f  death  by  N.  Y.  Supp.  279;  see  §  :;?  i. 

poison    are    violent,    not     natural,    or         v Mernavs    v.      United    States    Mut. 

spontaneous;  and  not  occurring  from  Ace.  Ass'n,  15  Fed.  Rep.  155. 

usual  and  natural  causes.    The  degree  "Picket!  \.  Ins.  Co.,  144  Pa.  St.  79- 

of    force  or  violence  is  not  material.  22  Atl.    Rep.  871. 
Southard  v.  Assurance  Co.,  JJ4  Conn. 


760 


ACCIDENT    INSURANCE. 


provision  of  the  certificate,  requiring  the  death  to  be  caused 
by  external  and  violent  means  to  bring  it  within  the  terms  of 
the  contract.1 

But  death  by  inhaling  illuminating  gas,  which  accidentally 
escaped  into  the  room  where  the  insured  was  sleeping,  is 
within  an  exception  of  an  accident  policy,  which  states  that  it 
"  does  not  insure  against  death  or  disablement  arising  from 
anything  accidentally  taken,  administered  or  inhaled,  inhaling 
gas  or  any  surgical  operation."  2 

It  has  been  held  that,  under  this  exemption,  a  recovery  may 
not  be  had  in  case  of  death  caused  by  the  inhalation  of  illu- 
minating gas,  where  it  is  uncertain  whether  the  death  wTas  the 


lPaul  v.  Travelers'  Ins.  Co.,  112  N. 
Y.  472;  20  N.  East.  Rep.  347:  S.  C, 
45  Hun  313.  The  court  said:  "I 
agree  with  the  counsel  of  the  re- 
spondent in  his  suggestion  that  if  the 
exception  is  to  cover  all  cases  where 
death  is  caused  by  the  presence  of 
gas,  there  would  be  no  reason  for 
using  the  word  '  inhale.'  If  the  pol- 
icy had  said  that  it  was  not  to  extend 
to  any  death  caused  wholly  or  in 
part  by  gas,  it  would  have  expressed 
precisely  what  the  appellant  now  says 
is  meant  by  the  present  phrase,  and 
there  could  have  been  no  room  for 
doubt  or  mistake.  *  *  That  a 
death  is  the  result  of  accident,  or  is 
unnatural,  imports  an  external  and 
violent  agency  as  the  cause."  See  also 
TJ.  S.  Mut.  Ace.  Ass'n  v.  Newman, 
84  Va.  52;  3  S.  East.  Rep.  805;  17  Ins. 
L.  J.  97;  §  379. 

2  Menneiley  v.  Assurance  Corpora- 
tion, 72  Hun  477;  25  N.  Y.  Supp.  230. 
The  court  said:  "  It  has  been  held  by 
the  court  of  last  resort  in  this  state 
that  the  words  '  inhaling  gas '  in  a 
similar  exception  contained  in  the 
contract  of  another  insurer  against 
accidents,  '  the  company  can  only  be 
understood  to  mean  a  voluntary  or 
intelligent  act  by  the  insured,  and 
not  an  involuntary  and  unconscious 


act.'  Paul  v.  Ins.  Co.,  112  N.  Y.  472; 
20  N.  East.  Rep.  347.  So  that  if  the 
exception  of  death  or  disablement  by 
•  inhaling  gas '  was  the  one  relied 
upon  by  the  defendant  here,  the  au- 
thority cited  would  be  conclusive 
against  its  contention.  But  such  is 
not  the  case.  The  exception  here  re- 
lied upon,  which  was  not  in  the 
policy  in  the  case  of  Paul,  expressly 
describes  an  act  not  voluntary  and 
intelligent,  but,  on  the  contrary,  ac- 
cidental. The  death  or  disablement 
excepted  is  one  '  arising  from  any- 
thing accidentally  inhaled,"  and 
here  was  the  death  of  the  insured 
arising  from  illuminating  gas  acci- 
dentally inhaled.  It  seems  difficult 
to  elaborate  or  prolong  an  argument 
upon  this  statement.  Here  is  no 
room  for  interpretation.  *  *  * 
The  exception  here  relied  upon,  if  ex- 
pressly framed  to  avoid  the  con- 
struction put  upon  that  in  the  case  of 
Paul,  supra,  could  not  more  success- 
fully have  accomplished  the  purpose. 
It  would  be  a  contradiction  in  terms 
to  apply  the  words  '  accidentally  in- 
haled '  to  the  voluntary  and  intelli- 
gent act  of  inhaling  an  anaesthetic  in 
aid  of  a  surgical  operation,  which 
the  court  say  was  apparently  the 
reference  in  that  case." 


ACCIDENT    INSURANCE.  761 

result  of  an  accident  or  of  suicide.1  Where  the  insured  was 
found  dead  in  bed,  with  a  ball  of  tough  froth  over  his  mouth, 
slightly  tinged  with  blood,  and  some  red  splashes  on  the  side  of 
his  face  and  on  his  breast,  the  room  being  full  of  coal  gas,  it 
was  held  to  be  a  question  of  fact,  properly  determinable  by  the 
jury,  whether  these  were  visible  and  external  signs  of  injury.2 
§  395.  Death  or  disability  caused  by  any  surgical  opera- 
tion or  medical  or  mechanical  treatment  for  disease. — 
Death  caused  by  the  act  of  taking  medicine,  done  with  the 
intention  to  cure,  is  a  death  caused  wholly  or  in  part  by  med- 
ical treatment  for  disease;  and  where  a  specified  dose  of  opium 
was  prescribed  to  the  insured  by  his  physician  to  allay  ner- 
vousness and  restlessness,  and.  by  inadvertence,  he  took  more 
opium  than  he  intended,  and  his  death  resulted  from  such 
overdose,  it  was  held  that  the  company  was  not  liable  under 
his  policy,  as  it  expressly  excepted  ,"  any  death  or  disability 
which  may  have  been  caused  wholly  or  in  part  by  any  surgi- 
cal operation  or  medical  or  mechanical  treatment  for  dis- 
ease." 3  Where  a  person,  injured  in  an  accident  resulting  in 
hernia,  dies  after  a  dangerous  and  unsuccessful  surgical  opera- 
tion resulting  in  peritonitis,  performed  when  death  seemed  in- 
evitable without  it,  the  accident  is  the  proximate  cause  of  his 
death.4 

'Richardson  v.   Ins.    Co.,  46  Fed.  must  be  voluntary  or  involuntary  in 

Rep.    843.     In   this  case  the  proofs  order  to  exempt  defendant  from  lia- 

sho  wed  that  the  assured  retired  to  his  bility.    *    *    This  case  can  also,  as  1 

room  in  the  hotel  at  which  he  was  a  think,  be  differentia  ted  from  |  Paul  v. 

guest,  and  on  the  next  morning  was  Ins.  Co.),  in  this:  that  in  that  case  it 

found  dead  in  his  bed,  with  illumi-  was  found  as  one  of  the  facts  that  the 

nating  gas  escaping  freely  fromoneof  death  of  the  assured  was  occasioned 

tlic  gas  burners  in   tin-  room.      In  by  accidental  means.     Bere  the  proof 

Bpeakingof  the  case  of  l'anl  v.  Ins.  will  allow  no  such  finding.    It  liases 

Co..    supra,    Judge    Blodgett   said:  the    fact    wholly    unsettled    as     to 

"The  reasoning  by  which  that  court  whether  the  death  was  the  result  of 

reached  its  conclusion  is  not  satisfac-  accident,  or  whether   it    was    occa- 

toi\  to  my  mind.    The  language  of  Bionedby  his  suicidal  act  and  intent," 

the  policy  is-. .  dear  as  to  require  no  '-U.S.  Mm.  A.cc.  Ass'n  v.  Newman, 

construction.     The  words    an-    un-  supra. 

equivocal   that   the  defendant    docs  86ayless  v.  Ins.  Co.,  14  Blatchf ord 

not  insure  against   death  caused  by  143;  Sins.  L.  J,  100. 

inhaling  gas.    There  is  nothing  in  *  Travelers' Ins.  Co.  v.  Murray,  10 

the  terms  of  the  policy  intimating  or  Colo.  296;  26  Pacific  Rep.  77 1. 
suggesting  that  the  inhalation  of  gas 


7G2  ACCIDENT   INSURANCE. 

§  396.  Hernia,  erysipelas. — A  policy  excepted  any  liability 
for  "hernia,  erysipelas,  or  any  other  disease  or  cause  arising 
within  the  system  of  the  assured  before,  or  at  the  time,  or 
following  such  accidental  injury,  whether  causing  death  or 
disability  directly  or  jointly  with  such  accidental  injury."  It 
was  held  that  death  from  strangulated  hernia  caused  solely 
by  external  violence,  followed  by  a  surgical  operation  per- 
formed for  the  relief  of  the  patient,  was  covered  by  the 
policy,  not  being  included  within  the  terms  of  the  exception. 
The  court  said :  "  It  is  to  my  mind  merely  a  question 
whether  the  proviso  at  the  end  of  the  first  condition,  that  the 
company  does  not  insure  against  death  or  disability  arising 
from  hernia,  means  hernia  generally,  whether  arising  from 
external  violence  or  arising  within  the  system,  or  whether 
'  hernia '  is  governed  by  the  other  words  '  or  any  other  disease 
or  cause  arising  within  the  system  of  the  insured  before,  or  at 
the  time,  or  following  such  accidental  injury.'  *  *  Look- 
ing at  the  language  of  the  policy,  and  taking  the  first  con- 
dition all  together,  upon  the  best  interpretation  I  can  put 
upon  it,  I  am  of  opinion  that  it  means  to  exempt  the  company 
from  liability  only  where  hernia  arises  within  the  system. 
*  *  Hernia  is  not  in  all  cases  a  disease  arising  within  the 
system.  It  may  or  may  not  do  so.  I  think  the  company,  is 
not  relieved  from  responsibility  where  the  hernia  is  caused  by 
external  violence."  '  It  seems  that  rheumatism  and  gout  are 
constitutional  diseases  and  always  arise  within  the  system, 
but  that  hernia  and  erysipelas  may  arise  within  the  system  or 
from  external  violence. 

Where  a  policy  provides  that  the  insurance  does  not  cover 
disability  or  death  resulting  wholly  or  partly,  directly  or  in- 
directly, from  medical  or  surgical  treatment  or  hernia,  and  the 
insured,  injured  in  an  accident  which  brought  about  hernia, 
dies  after  a  dangerous  and  unsuccessful  surgical  operation  re- 
sulting in  peritonitis,  performed  when  death  seemed  inevitable 
without  it,  the  company  is  liable  on  the  ground  that  the  ac- 
cident is  the  proximate  cause  of  his  death.  An  insurer  against 
death  "  from  bodily  injuries  effected  through  external,  violent 
and  accidental  means,"  but  excepting  death  from  hernia,  is 
not  relieved  from  liability  where  death  results  from  hernia, 

1  Fitton  v.  Ins.  Co.,  112  Eng.  Com.  Law  (17  C.  B.  N.  S.)  122. 


ACCIDENT    INSURANCE.  703 

caused  by  "  external,  violent  and  accidental  means."  1  In  an 
action  on  a  policy  of  accident  insurance  for  the  death  of  the 
insured  from  hernia  caused  by  an  accident,  where  the  defense 
is  that  for  years  before,  he  was  afflicted  with  chronic  hernia, 
testimony  as  to  his  continued  good  health,  bodily  vigor  and 
ability  to  work  is  admissible.  It  may  also  be  shown  that 
during  a  surgical  operation  no  trace  was  found  of  the  ex- 
istence of  a  case  of  chronic  hernia.2  In  a  suit  on  an  accident 
policy,  where  the  petition  alleged  that  deceased  died  from 
erysipelas,  resulting  from  an  accidental  laceration  of  a  finger 
an  answer  averring  that  in  his  contract  with  the  insurer, 
deceased  had  warranted  "  that  he  had  never  had,  and  had  not 
then,  any  bodily  or  mental  infirmity,  whereas  in  truth 
*  *  *  saij  deceased  had  on  various  occasions  prior 
thereto  been  afflicted,  and  was  then  subject  to  and  infected 
with  erysipelas,  and  that  he  eventually  died  of  erysipelas,"  is 
demurrable,  as  failing  to  state  a  defense  in  that  it  does  not 
show  that  erysipelas  was  an  infirmity  which  increased  the  risk 
of  death  in  the  event  of  an  accident.3 

§  397.  Proximate  cause  of  the  death  of  the  insured. — 
Whether  a  cause  is  proximate  or  remote  does  not  depend  alone 
upon  the  closeness  in  the  order  of  time  in  which  certain  things 
occur.  In  other  words,  the  application  of  the  principles  relat- 
ing to  proximate  cause  is  not  necessarily  controlled  by  time  or 
distance,  or  by  the  succession  of  events.  An  efficient,  adequate 
cause  when  found,  must  be  deemed  the  true  cause  unless  some 
other,  not  incidental  to  it,  but  independent  of  it,  is  shown  to 
have  intervened  between  it  and  the  result/  In  an  action  on 
an  accident  policy  where  it  is  shown  that  the  deceased  sus- 
tained an  accidental  injury  to  an  internal  organ,  and  that  this 
necessarily  produced  inflammation,  and  that  the  inflammation 
produced  a  disordered  condition  of  the  injured  part,  whereby 

^Travelers'  Ins.  Co.  v.  Murray,  16  Co.  v.  Kellogg,  94  U.  S.  469;    Law- 
Colo.  296;  26Pac.  Rep.  774.  rence  v.  [ns.  Co.,  7  L.  R.Q.B.Div. 
Travelers'    Ins.   Co.    v.   Murray.  216;  McCarthy  v.  Ins.  Co.,  8  Biss.  862; 
supra.  Mallory  v.  Ins.  Co.,  IT  N.  Y.  52;  Ins. 
Bernays  v.    Association,    r>  Fed.  Co.  v.  Crandal,  120  U.  B.  527;  7  Sup. 
Rep.  155.  Ct  Rep.  685;  Blackstone  v.  Ins.  Co., 
1  Kellogg  v.  Railway  Company,  26  74    Mich.  592,    insanity:  Travelers' 
Wis.  223;    Perley  v.    Railwaj  Co.,  98  Ins    Co.  v.  Murray,  L6  Colo.  296;  26 
Mass.  114;    Milwaukee,  etc,  Railway  Pac.  Rep.  774.  hernia. 


764  ACCIDENT    INSURANCE. 

other  organs  of  the  body  could  not  perform  their  natural  and 
usual  functions,  and  in  consequence  the  injured  person  died, 
the  original  injury  will  be  considered  as  the  proximate  and 
sole  cause  of  death;  but  if  an  independent  disease  or  disorder, 
not  necessarily  produced  by  the  injury,  supervened  upon  the 
injury,  or  if  the  alleged  injury  merely  brought  into  activity,  a 
then  existing,  but  dormant  disorder  or  disease,  and  death 
resulted  wholly  or  in  part  from  such  disease,  the  injury  can 
not  be  considered  the  sole  and  proximate  cause  of  death.1 

A  policy  issued  against "  injuries  accidentally  occurring  from 
material  and  external  causes,  operating  upon  the  person  of  the 
insured,  where  such  accidental  injury  is  the  direct  and  sole 
cause  of  death  to  the  insured;  but  it  does  not  insure  in  case  of 
death  arising  from  fits,  *  *  or  any  disease  whatsoever 
arising  before  or  at  the  time  or  following  such  accidental  in- 
jury, whether  consequent  upon  such  accidental  injury  or  not, 
and  whether  causing  such  death  directly  or  jointly  with  such 
accidental  injury."  The  insured,  while  at  a  railway  station, 
was  seized  with  a  fit,  fell  forward  on  the  track  and  was  run 
over  by  a  passing  train.  The  falling  forward  of  the  insured 
off  the  platform  was  in  consequence  of  his  being  seized  with  a 
fit  or  sudden  illness,  and  but  for  such  fit  or  illness  he  would 
not  have  suffered  death  in  this  manner.  The  court  said :  "  The 
question  arises  whether,  according  to  the  true  construction  of 
the  proviso,  it  can  be  said  that  this  is  a  case  of  death  arising 
from  a  fit;  because  if  this  death  did  not  arise  from  the  fit,  ac- 
cording to  the  true  construction  of  the  policy,  the  remainder 
of  the  clause  does  not  come  into  existence  at  all,  and  is  inap- 
plicable.   *     *    According  to  the  true  principle  of  law,  we  must 

1  Barry  v.  Accident  Association.  23  etc.,  R.  R.  Co.  v.  Reany,  42  Md.  117; 

Fed.  Rep.  712;  Southard  v.  Assurance  Tuttlev.  Ins.  Co.,  134  Mass.  175;  Peck 

Co.,  34  Conn.  574;  N.  Am.  Ins.  Co.  v.  v.  Accident  Association,  23  N.  Y.  St. 

Burroughs,  69  Pa.  St.  43:  Whitehouse  Rep.  465;  52  Hun  255;  Standard  Life 

v.  Ins.  Co.,  7  Ins.  L.  J.  23;  McCarthy  v.  Thomas  (Ky.),  17  S.  W.  Rep.  275; 

v.    Ins.  Co.,  8  Ins.  L.  J.  208;  8  Biss.  Isitt   v.  Assurance   Co.,   5   Times  L. 

362;  National  Ass'n  v.  Grauman,  107  Repts.  194;  L.  R,  22  Q.  B.  504;  Ander- 

Ind.  288;  see  Terr e  Haute,  etc.,  R.  R.  son  v.  Ins.  Co.,  17  Session  Cases  (4th 

Co.  v.  Buck,  and  cases  cited  and  re-  series)    6;    Cawley  v.  Association,   1 

viewed;   Insurance  Co.  v.  Seaver,  86  Cababe  &  Ellis,  597,    where    death 

U.  S.  (19  Wall.)  531;  Scheffer  v.  Rail-  would  not  have  ensued  from  the  ac- 

road  Co.,  105  IT.  S.  249;  Insurance  Co.  cident  had  the    insured  not  at  the 

v.   Tweed,    74  U.    S.  44;   Baltimore,  time  been  suffering  from  gall  stones. 


ACCIDENT    INSUKANCE.  765 

look  at  only  the  immediate  and  proximate  cause  of  death,  and 
it  seems  to  me  to  be  impracticable  to  go  back  to  cause  upon 
cause,  which  would  lead  us  back  ultimately  to  the  birth  of  the 
person,  for  if  he  had  never  been  born  the  accident  would  not 
have  happened.  *  *  Supposing  a  man  were  out  in  the  field 
following  sports,  and  he  were  to  be  seized  with  a  lit,  either  a 
fainting  fit  or  epileptic  fit,  or  any  other  fit,  ami  had  retired  to 
one  side  of  the  field  and  remained  there  recovering  from  the 
fit,  and  being  there,  a  sportsman  not  knowing  he  was  there,  ac- 
cidentally shot  him,  it  might  be  said,  in  the  same  manner  that 
the  cause  of  death  arose  from  a  fit.  It  seems  to  me  only  to 
require  to  be  stated,  to  show  the  entire  absurdity  of  it.  The 
only  difference  between  that  case  and  this  is  in  the  time  that 
intervened  between  the  time  of  the  fit  and  the  person  being 
placed  within  the  influence  of  the  succeeding  accident,  which  in 
this  case  was  very  short;  but  I  fail  to  see  in  point  of  reas<  m  that 
there  is  any  difference  between  one  hour  or  one  minute  or  one 
day.  The  break  in  the  chain  of  causes  seems  to  be  equally 
complete.  I  therefore  put  my  decision  on  the  broad  ground, 
that,  according  to  the  true  construction  of  this  policy  and  its 
proviso,  this  was  not  an  act  arising  from  a  fit,  and  therefore, 
whether  it  contributed  directly  or  indirectly,  or  by  any  other 
mode  to  the  happening  of  the  subsequent  accident  seems  to  me 
wholly  immaterial." '  A  policy  contained  a  proviso  that  the 
insurance  should  not  extend  "to  any  injury  caused  by  or  aris- 
ing from  natural  disease  or  weakness  or  exhaustion  consequent 
upon  disease."  While  the  insured  was  lording  a  stream  lie 
was  seized  with  an  epileptic  fit,  fell  into  the  stream  and  was 
drowned.  It  was  held  that  the  company  was  liable  on  its  pol- 
icy, since  the  death  was  not  caused  by  any  natural  disease  or 
weakness  or  exhaustion  consequent  upon  disease,  but  by  the  ac- 
cident of  drowning." 

Under  a  provision  of  an  accident  policy,  stating  that  the 
risk  shall  not  extend  "to  any  case  except  when  the  accidental 
injury  shall  be  the  proximate  and  sole  cause  of  disability  or 
death,"  if  the  insured  suffer  death  by  drowning,  the  drowning 

'Lawrence  v.  Ins.  Co.,  7  L.   R.,  Q.       '2  Wingpear  v.  Ins.  Co.,  L.  R..  6  Q. 
B.  Div.  216;  45  L.  T.  Rep.   (N.  S.)  29;    B.  Div.  42;  43  L.  T.  Rep.  N.  S.  459. 
see  Reynolds  v.  Ins.  Co.,   22  L.  T.  R. 

N.  S.  820. 


766  ACCIDENT    INSURANCE. 

is  the  proximate  and  sole  cause  of  death,  no  matter  what  the 
cause  of  falling  into  the  water,  unless  death  would  have  been 
the  result  without  the  presence  of  the  water.1 

§  398.  A  policy  insuring  against  death,  effected  through 
external,  violent,  or  accidental  means,  but  excepting  all  cases 
in  which  there  should  be  no  visible  sign  of  bodily  injury,  or  in 
which  death  should  occur  in  consequence  of  disease,  or  in  which 
the  injury  was  not  the  proximate  cause,  does  not  relieve  the 
insurer  from  liability,  where  death  results  from  peritonitis 
occasioned  by  a  fall;  and  this,  even  though  the  assured  had 
previously  had  peritonitis,  and  had  thus  been  rendered  pecul- 
iarly liable  to  a  recurrence.  In  such  a  case  an  instruction  that 
there  must  have  been  visible  signs  of  injury  effected  through 
external,  violent  or  accidental  means,  and  that  such  injury  must 
alone  have  occasioned  death,  to  enable  the  assured  to  recover, 
was  sufficiently  favorable  to  the  insurer.3 

A  policy  insured  against  cuts,  stabs,  concussions,  etc.,  "  when 
accidentally  occurring  from  material  and  external  cause,  where 
such  accidental  injury  is  the  direct  and  sole  cause  of  death  to 
the  insured,  *  *  but  it  does  not  insure  against  death  or 
disability  arising  from  *  hernia,  or  any  other  disease  or 
cause  arising  within  the  system  of  the  insured  before  or  at  the 
time,  or  following  such  accidental  injury,  whether  causing 
death  or  disability  directly  or  jointly  with  such  accidental  in- 
jury." The  insured  accidentally  fell  with  violence  on  the  floor 
of  his  room,  and  was  immediately  ruptured  in  his  bowels,  and 
became  at  once  afflicted  with  strangulated  hernia  in  his  abdo- 
men. A  surgical  operation  was  necessarily  performed  for  the 
purpose  of  relieving  him,  and  he  soon  afterward  died  from  the 
hernia  and  from  the  surgical  operation.  It  was  held  that  the 
policy  should  be  construed  to  mean  that  hernia  arising  within 

1  Manufacturers1  Indemnity  Co.  v.  McDonald  v.  Snelling,  14  Allen  290; 

Dorgan,  58  Fed.  Rep.  945;  Winspear  Perley  v.  Railroad  Co.,  98  Mass.  414; 

v.  Ins.  Co.,  6  Q.  B.  Div.  42;  Reynolds  Metallic  Compression  Casting  Co.  v. 

v.  Ins.  Co.,  22  Law  Times  (IT.    S.)  Fitchburg  Railroad  Co.,  109  Mass.  277; 

820;  Lawrence  v.  Ins.  Co.,  7  Q.   B.  Benefit  Ass'n  v.   Grauman,  107  Ind. 

Div.  216;  Ins.  Co.  v.  Crandall,  120  U.  288;  7  N.  E.  Rep.  233;  Insurance  Co. 

S.  527;  7  Sup.  Ct.  Rep.  685;  Trew  v.  v.  Burroughs,  69  Pa.  St.  43;  Sheanon 

Assurance  Co.,  6  Hurl.  &  N.  838.  v.  Insurance  Co.,  77  Wis.  618:  46  N. 

s  Freeman  v.  Association,  156  Mass.  W.  Rep.  799;  Insurance  Co.  v.  Tweed, 

351;  30  N.    East.    Rep.    1013;    citing  7  Wall.  44;  Insurance  Co.  v.  Seaver, 

Marble    v.    Worcester,   4    Gray  395;  19  Wall.  531. 


ACCIDENT    INSUEANCE.  767 

the  system  independently  of  external  violence  was  not  insured 
against,  but  that  death  from  hernia,  caused  solely  and  directly 
by  external  and  accidental  violence  and  a  necessary  surgical 
operation,  was  not  within  the  exception.1 

A.  policy  of  insurance  against  death  from  accidental  injury 
contained  the  following  condition:  "  This  policy  insures  against 
all  forms- of  cuts,  *  *  when  accidentally  occurring  from 
material  and  external  cause  operating  upon  the  person  of  the 
insured,  where  such  accidental  injury  is  the  direct  and  sole 
cause  of  death  to  the  insured,  but  it  does  not  insure  against 
death  arising  from  *  erysipelas,  or  any  other  disease  or  second- 
ary cause  or  causes  arising  within  the  system  of  the  insured, 
before,  or  at  the  time  of,  or  following  such  accidental  injury, 
whether  causing  such  death  directly  or  jointly  with  such  acci- 
dental injury."  The  assured  accidentally  cut  his  foot  against 
the  broken  side  of  an  earthenware  pan.  Five  days  afterward 
erysipelas  supervened,  and  seven  days  afterward  he  died  of 
that  disease.  The  erysipelas  was  caused  by  the  wound,  and 
but  for  the  wound  he  would  not  have  suffered  from  it.  In  an 
action  on  the  policy,  it  was  held,  that  the  company  was  pro- 
tected by  the  above  condition,  and  was  not  liable.2  In  Harris 
v.  Ins.  Co.,3  the  insured,  who  was  a  fireman,  was  accidentally 
buried  under  a  falling  wall.  He  was  soon  rescued  with  out 
apparent  injury,  and  continued  his  work  for  about  three 
months,  when  he  took  poison  and  died.  In  a  suit  on  the 
policy  on  the  ground  that  the  accident  rendered  him  insane, it 
was  held,  that,  if  he  was  insane  on  account  of  the  accident,  the 
death  was  too  remote  to  be  covered  by  the  policy,  which  in- 
cluded only  proximate  results.4  Where  the  plaintiff's  evidence 
tended  to  show  that  the  death  of  the  insured  was  caused  by 
embolism  or  throbus,  the  direct  result  of  the  breaking  of  his 
arm  a  few  days  before,  while  the  evidence  for  the  company 
tended  to  show  that  death  was  caused  by  pneumonia,  the 
court  refused  to  disturb  the  finding  of  the  jury,  that  the  frac- 

1  Fitton  v.  Ins.  Co.,  112  Eng.  Com.  were  placed  in  the  policy  after  the 

Law  (17  C.  B.  N.  S.)  122;  84  L.  J.  C.  decision  in  the  case  of  Fitton  v.  Ins. 

P.  28;  Travelers'  Ins.  Co.  v.  Murray.  Co.,  supra. 

16  Colo.  296;  26  Pac.  Rep.  77 1.  3 Superior  Court  of  Chicago  (1868), 

Smith  v.  Insurance  Co.,  5  L.  R.  7  Am.  L.  J.  589. 

Exch.  802;  22  L.  T.  Rep.  N.  S.  861.  *  See  Schefferv.  Railroad  Company, 

The    words   "or    secondary   cause"  105  U.  S.  249. 


768  ACCIDENT   INSURANCE. 

ture  of  the  decedent's  arm  alone  caused  his  death,  and  that  it 
was  the  sole  and  proximate  cause.1  The  evidence  in  a  case 
showed  that  death  was  caused  by  blood-poisoning  occasioned 
by  the  inoculation  of  some  poisonous  substance  into  a  wound 
when  or  very  soon  after  it  was  made.  It  was  held  that  if  the  in- 
oculation occurred  at  the  time  the  wound  was  made,  and  was  a 
part  of  the  accident,  the  accident  was  the  sole  and  proximate 
cause  of  the  death,  though  blood-poisoning  ensued.2  In  an 
action  on  an  accident  policy  to  recover  for  the  death  of  the  in- 
sured caused  by  falling  from  a  window,  an  instruction  to  the 
jury,  that  if  the  deceased  got  up  in  his  sleep,  and  while  asleep 
fell  from  the  window,  they  should  find  for  the  company,  was 
properly  refused.  Such  an  instruction  excludes  the  idea  that 
the  deceased  could  possibly  have  gotten  up  in  his  sleep,  have 
then  awakened  and  again  fallen  to  sleep.  It  was,  therefore, 
calculated  to  mislead,  by  making  the  jury  think,  that,  because 
the  deceased  might  have  gotten  up  in  his  sleep,  and  subse- 
quently, and  after  having  awakened,  fallen  out  of  the  window 
while  asleep,  somnambulism  was  the  proximate  cause  of  the 
accident.3 

§  399.  Bodily  infirmity — Disease. — A  company  can  not  es- 
cape its  liability  under  an  accident  policy  on  the  ground  that 
the  insured,  who  was  deaf,  signed  an  application  stating  that 
he  was  not  subject  to  any  bodily  infirmity,  where  it  appears 
that  its  agent  who  took  the  application  had  full  knowledge  of 
the  physical  condition  of  the  insured.4  Where  an  agent  of  an 
accident  insurance  society  knows  that  a  person  has  some  bod- 
ily infirmity,  but  nevertheless  solicits  him  to  take  out  insur- 
ance, and  recommends  him  as  a  proper  person  to  be  insured, 
these  facts  may  be  shown  to  rebut  the  presumption  that  the 
society  was  induced  to  take  the  risk  by  the  representation  in 
the  application  that  the  insured  was  not  subject  to  any  bodily 

tPeck  v.  Accident  Association,  52  377;  14  S.  E.  Rep.  923.   The  knowledge 

Hun  255;  23  N.  Y.  St.  Rep.  465:  see  of  the  agent  will  be  imputed  to  the 

Standard   Life  v.  Thomas  (Ky.),   17  company.     11    Am.   &     Eng.    Enc. 

S.  W.  Rep.  275;  Martin  v.  Indemnity  Law,  323;  Fishbeck  v.    Ins.    Co.,  54 

Co.,  15  N.  Y.  Supp.  309;  Martin  v.  Cal.  422;    Eggleston  v.  Ins.   Co.,  65 

Association,  16  N.  Y.  Supp.  279.  Iowa  308;  21  N.  W.  Rep.  652:  Ins.  Co. 

2  Martin  v.  Association,  supra.  v.  Fish,  71  111.  620;  Mullin  v.  Ins.  Co., 

3 Travelers'  Ins.  Co.  v.  Harvey,  82  58  Vt.  113;  4  Atl.  Rep.  817;  Shafer  v. 

Va.  949;  5  S.  E.  Rep.  553.  Ins.  Co.,  53  Wis.  361;  10  N.  W.  Rep. 

4Follette  v.  Association,  110  N.  C.  381;  Ins.  Co.  v.  McCrea,  8  Lea  513. 


ACCIDENT    INSURANCE.  769 

infirmity.1  Near-sightedness  is  not  a  bodily  infirmity.2  An 
anaemic  murmur,  indicating  no  structural  defect  of  the  heart, 
but  arising  simply  from  a  temporary  debility  or  weakened 
condition  of  the  body,  is  not  a  bodily  infirmity  within  the 
meaning  of  a  policy.3  A  provision  in  an  accident  policy,  stat- 
ing that  the  risk  shall  not  extend  to  death  caused  by  bodily 
infirmities  or  disease,  does  not  include  fainting  produced  by 
indigestion  or  a  lack  of  proper  food,  or  any  other  cause  which 
would  show  a  mere  temporary  disturbance  or  enfeeblememV 
In  an  application  for  accident  insurance,  a  warranty  of  freedom 
from  bodily  or  mental  infirmity  does  not  extend  to  temporary 
debility.  Vertigo  or  swimming  in  the  head  is  not  a  bodily 
infirmity  where  the  trouble  is  merely  temporary,  the  result  of 
indigestion,  and  does  not  affect  the  general  health  of  the  ap- 
plicant.5 

In  his  application  for  an  accident  policy  the  insured  stated 
that  he  was  not  subject  to  fits,  or  any  disorder  which  would 
render  him  liable  to  accidental  injury.  A  few  days  after  the 
policy  was  issued,  the  insured,  on  entering  a  store,  tripped, 
fell  against  a  stove,  struck  his  forehead,  and  became  uncon- 
scious for  several  minutes.  He  grew  worse  from  day  to  day, 
became  insane,  and,  a  few  days  later,  died.  Afterward,  in  a 
suit  on  the  policy,  there  was  evidence  that  he  had  several 
times,  before  making  the  application,  fallen  or  been  thrown 
from  his  buggy  and  rendered  unconscious,  and  that  he  had 
also  several  times  fallen  down,  without  apparent  cause,  trem- 
bling and  acting  strangely.  Persons  who  had  known  him  for 
ma  n  v  years  testified  that  he  was  strong,  robust  and  rugged 
in  health,  and  that  they  had  never  known  of  his  havingany  ail- 
ment. The  jury  found  that  he  had  made  no  misrepresenta- 
tion as  to  his  physical  condition,  and  the  court  refused  to  dis- 
turb the  finding."    Where  insured,  while  a  boy,  received  injuries 

"Follette  v.  Association,  107  N.  C  *  Manufacturers'  Indemnity  Co.  v. 

240,  L2  s.    E.   Rep.  370,    where  the  Dorgan,  58  Fed.  Rep.  945. 

agent  knew  that  the  applicant  %v:lh  'Manufacturers'  Indemnity  Co.  v. 

deaf;  Humphreys  v.  Association,  189  Dorgan,  58  Fed.  Rep.  945. 

Pa.  St.  864,  20  Atl.  Rep.  1047,  where  .Mutual  Benefit  v.  Daviess,  s?  Ky. 

the  agent  knew  that  the  applicant  541;  '•»  8.  W.  Rep.  812. 

had  but  one  eye.  'Brink  v.  Accident    Association,  7 

lCotten  v.  i  'asualty  Co.,  41  Fed.  N.  Y.  Supp.  847;  Bee  Ins.  Co.  v.  Fran- 
Rep.  506.  Cisco,  IT  Wall.  07^. 
49 


770  ACCIDENT    INSURANCE. 

from  which  he  recovered  so  that  they  did  not  increase  his 
liability  to  accidental  injury,  or  contribute  to  the  accident 
which  resulted  in  his  death,  his  policy  was  not  forfeited  by  a 
statement  in  his  application  that  he  had  never  been  physically 
injured,  or  subject  to  bodily  or  mental  infirmity  or  disease; 
the  insured  being  entitled  to  a  liberal  construction  in  his  favor. ' 
In  a  suit  on  an  accident  policy  providing  that  the  benefits 
should  not  extend  to  death  caused  by  bodily  infirmity  or 
disease,  it  appeared  that  the  insured  suddenly  fell,  striking 
his  head.  There  was  no  evidence  of  any  external  cause  for 
the  fall,  and  the  uncontradicted  testimony  of  the  experts  who 
conducted  the  post  mortem  showed  that  the  heart  and  brain 
were  generally  diseased,  and  that  this  caused  the  fall  and 
death.     It  was  held  that  there  could  be  no  recovery.2 

§  400.  Loss  of  foot,  eye  or  hand.— One  can  not,  under  an 
accident  policy,  recover  as  for  the  loss  of  a  foot,  where,  by 
reason  of  an  injury  to  his  back,  he  is  deprived  of  the  use  of 
his  leg,  except  when  wearing  an  artificial  support  for  his 
body.3  But  he  may,  under  such  a  policy,  recover  as  for  the 
loss  of  both  feet,  where  by  reason  of  an  accidental  injury  his 
legs  become  permanently  paralyzed  and  useless.4 

§  401.  Permanent  or  total  disability. — It  is  provided  in 
the  laws  of  some  states  that  societies  may  be  organized  for  the 
purpose  of  furnishing  accident  or  permanent  disability  indem- 
nity to  members.  The  contracts  of  insurance  issued  by  some 
societies  stipulate  that  accident  and  permanent  disability  in- 
demnity shall  "be  paid  according  to  their  provisions,  and  under 
the  provisions  of  the  by-laws.5  There  are  few  adjudicated 
cases  on  questions  of  permanent  or  total  disability,  and  even 
these  are  not  agreed  upon  the  construction  to  be  given  to 
certain  words  and  phrases  used  in  most  contracts  of  indem- 

1  Standard  Life  v.  Martin,  133  Ind.  the  paralysis  of  the  legs  and  feet  of 
376;  33  N.  East.  Rep.  105;  Bancroft  the  assured  continued  until  his  death, 
v.  H.  B.  Association,  120  N.  Y.  14.  and  that  he  was  not  able  to  stand  up 

2  Sharpe  v.  Association  (Ind.),  37  or  use  them  after  the  injury.  The 
N.  East.  Rep.  353.  action  was  commenced  in  his  life- 

3  Stever  v.  Association,  150  Pa.  132;  time,  and  he  died  more  than  ninety 
24  Atl.  Rep.  662.  days  after  the  accident. 

4Sheanon  v.  Ins.  Co.,  77  Wis.  618;       5  See  May  on  Insurance,  §  514  et 
46    N.  W.  Rep.  799;    S.  C,  83  Wis.    seq.;    Bliss  on  Life  Insurance,  §702 
507;  53  N.  W.  Rep.  878.     In  this  case   et  seq. 
the  evidence  was  uncontradicted  that 


ACCIDENT   INSURANCE.  771 

nity.  A  review  of  these  cases  will  show  very  plainly  the  neces- 
sity of  scrutinizing  closely  the  exact  language  of  the  contract, 
as  stress  is  sometimes  laid  upon  the  very  form  of  the  expres- 
sion in  which  the  contract  is  clothed.  A  policy  which  merely 
provides  for  indemnity  for  loss  of  time  in  a  certain  sum  per 
Aveek  during  the  period  of  disability  to  Avork  does  not  entitle 
the  administrator  of  the  insured  to  any  damages  in  case  of 
an  accident  causing  the  instantaneous  death  of  the  insured.1 
AVhere  the  contract  states  the  occupation  and  classification  of 
the  insured,  and  provides  for  the  payment  of  a  certain  sum 
per  week  for  the  "  immediate,  continuous  and  total  loss  of  such 
business  time  -as  may  result  from  accidental  injuries,"  the 
words  "  loss  of  such  business  time"  have  reference  to  the  occu- 
pation of  the  insured,  and  the  loss  of  time  in  such  business 
means  the  loss  of  time  in  the  business  of  the  insured.2 

Under  a  policy  insuring  one  against  loss  of  time  resulting 
from  certain  injuries  "  which  shall,  independently  of  all  other 
causes,  immediately,  Avholly  and  continuously  disable  him 
from  transacting  any  and  every  kind  of  business  pertaining  to 
his  occupation,"  the  company  is  not  liable  for  loss  of  time 
resulting  from  a  physical  injury,  when  it  affirmatively  appears 
that  thirty  days  elapsed  after  the  injury  before  he  Avas  so  dis- 
abled that  he  could  not  attend  to  his  business,  and  that  during 
the  thirty  days  he  gave  more  or  less  attention  to  his  business. 
The  Avord  "immediately"  being  preceded,  by  the  words  "in- 
dependently of  all  other  causes,"  is  a  word  of  time,  and  not  of 
cause  and  effect,  and  the  time  which  it  indicates  is  not  the  same 
as  that  which  would,  be  indicated  by  the  phrase  "  within  a 
reasonable  time."  3 

§  402.  Permanent  or  total  disability — Strict  construc- 
tion.— A  contract  of  insurance  provided  that,  in  case  of  acci- 
dental injuries  which  should  "wholly  disable  and  prevent  him 
from  the  prosecution  of  any  and  every  hind  of  business  per- 
taining to  his  occupation,"  tin?  insured  should  be  indemnified 
against  loss  of  time  thereby  "  for  such  period   of  continuous 

'Dawson  v.  Ins.  Co.,  38  Mo.  App.  B Williams  v.  Association,  91  Ga. 
855.  698;  17  S.  E.  R  <p.  983;  but  Bee  Amer- 

s  Pennington  v.  Ins.  Co.,  85  Iowa  ican    Accident  Co.   v.    Norment,  91 
168;  52  N.  W.  Rep.  482;  see  Bean  v.    Tenn.  1;  18  S.  W.  Rep.  395. 
Ins.  Co.,  94  Cal.  581;   29   Pac.    Rep. 
1113. 


T72  ACCIDENT    INSURANCE. 

total  disability  "  as  sliould  immediately  follow,  not  exceeding 
twenty-six  weeks.  In  an  action  on  this  contract  it  was  held 
that  it  was  error  to  instruct  the  jury  that  the  defendant  was 
to  pay  the  amount  agreed,  if  by  the  accident  the  plaintiff  had 
been  disabled  in  any  way  from  prosecuting  the  business  in 
which  he  was  engaged,  and  that  the  plaintiff  was  entitled  to 
recover  for  such  time  as  he  was  "  rendered  wholly  unable  to 
do  his  accustomed  labor;  that  is,  to  do  substantially  all  kinds 
of  his  accustomed  labor  to  some  extent."  '  The  constitution 
of  a  mutual  benefit  society  provided  that  a  member  "  perma- 
nently disabled  from  following  his  or  her  usual  or  other  occupa- 
tion "  was  entitled  to  a  benefit,  and  in  another  section  defined 
such  disability  as  one  which  should  "  permanently  prevent  the 
member  from  following  any  occupation  whereby  he  or  she  can 
obtain  a  livelihood."  In  construing  these  provisions,  it  was 
held  that  the  words  "  or  other  occupation  "  in  the  first  men- 
tioned section,  could  not  be  held  to  mean  "  or  other  of  the 
same  kind,"  and  that  the  definition  in  the  latter  section  was 
cor. elusive  against  one,  who,  disabled  in  his  own  trade,  had 
been  working  at  another  totally  dissimilar  business;  against 

'  Saveland  v.  Fidelity,  etc. ,  Co.,  67  assured,  "while  totally  disabled  and 
Iowa  174;  30  N.  W.  Rep.  237.  In  prevented  from  the  transaction  of  all 
this  case  the  court  said:  "The  or-  kinds  of  business,"  and  it  was  held 
dinary  object  of  a  policy  of  insurance  that  such  language  could  not  be  con- 
may  be  such  as  stated  by  the  learned  strued  to  mean  "  partially  disabled 
trial  judge,  but  the  manifest  purpose  from  some  kinds  of  business,"  that 
of  this  policy  was  to  obtain  pre-  the  assured  could  not  recover,  except 
miums  by  incurring  as  little  risk  as  upon  proof  of  total  disability,  and 
possible.  But  there  was  no  law  to  that  the  rule  would  not  be  varied  if 
prevent  the  parties  from  making  he  should  be  totally  disabled  in  his 
their  own  contract.  The  plaintiff  own  pursuit  and  able  to  engage  in 
consented  to  and  made  this  one.  He  some  other  employment.  In  Rhodes 
can  not  repudiate  or  alter  its  condi-  v.  Railway  Pass.  Ins.  Co.,  5  Lans.  71, 
tions  in  the  day  of  his  calamity.  The  it  was  held  that  there  could  be  no 
courts  are  powerless  to  make  a  new  recovery  because  it  was  not  shown 
contract  for  him  or  to  strike  some  that  there  was  a  "total  disability  to 
words  from  the  contract  he  made  for  labor,"  the  language  of  the  contract 
himself,  and  insert  others,  and  thus  being,  "accident  and  injury  which 
enlargi  the  risk,  in  order  to  meet  the  totally  disabled  and  prevented  from 
expectation  of  the  plaintiff  in  obtain-  all  kinds  of  business."  See  Hutchin- 
ing  the  policy."  In  Lyon  v.  Railway  son  v.  Supreme  Tent,  22  N.  Y.  Supp. 
Pass.  Assur.  Co.,  46  Iowa  631,  the  801;  Loveland  v.  Company.  67  Wis. 
language  of  the  contract  was  that  174;  U.  S.  Association  v.  Millard,  43 
indemnity    should    be    paid    to   the    111.  App.  148. 


ACCIDENT    INSURANCE.  773 

one  who,  being  disabled  from  following  the  occupation  of  a 
barber,  was  able  to  run  a  restaurant,  or  clerk  in  a  store.1  The 
object  of  a  society  was  to  relieve  its  members  while  they  were 
unable  to  work  by  reason  of  sickness  or  injury,  and  the  con- 
stitution provided  for  benefits  only  for  "  total  inability  to 
labor"  on  the  part  of  the  member.  It  was  held  that  this  did 
not  mean  inability  to  labor  at  the  same  occupation,  and  that 
if  the  member  was  able  to  work  at  other  employments,  the 
benefits  did  not  accrue.2 

In  a  recent  case*  it  was  said:  "The  policy  upon  its  face 
describes  the  insured  as  '  by  occupation,  profession,  or  em- 
ployment a  leather-cutter  and  merchant.'  It  then  provides, 
among  other  things,  that  '  if  the  insured  shall  sustain  bodily 
injuries,  *  *  *  which  shall  *  *  *  immediately  and 
wholly  disable  and  prevent  him  from  the  prosecution  of  any 
and  every  kind  of  business  pertaining  to  the  occupation  under 
which  he  is  insured,'  then  he  is  to  be  indemnified  in  the  sum 
of  $15  per  week.  The  policy  then  goes  on  to  recite  that  '  he 
is  insured  under  classification  medium,'  but  that  engaging  in 
a  more  hazardous  occupation  will  not  wholly  vitiate  the  policy, 
but,  in  such  case,  he  shall  receive  only  a  proportionate  com- 
pensation. On  the  back  of  the  policy  is  a  classification  of 
risks,  in  which  the  '  preferred '  class,  which  is  most  liberal  in 
its  indemnity  to  the  insured,  includes  'merchant;'  ami 
the  'medium'  class,  which,  provides  for  less  indemnity, 
does  not  in  terms  include  '  leather  cutter.'  The  classification 
of  risks  upon  the  back  of  the  policy  can  not  have  the  effect  to 
control  the  express  stipulations  on  its  face.  The  plaintiff  was 
insured  as  a  leather-cutter  and  merchant,  lie  was  described 
as  having  this  twofold  occupation.  To  be  entitled  to  recover 
a  weekly  indemnity,  he  must  be  wholly  disabled  from  tin- 
prosecution  of  any  and  every  kind  of  business  pertaining  to 
tlic  occupation  under  which  he  was  insured;  thai  is.  the  two- 
fold occupation  of  leather-cutter  and  merchant.  Such  two- 
fold occupations  are  not  rare.  Many  kinds  of  business 
include   buying  and  selling    as  well  as  manufacturing;    the 

•Albert  v.  Order  of  Chosen  Friends,  3  Ford  v.  TJ.  S.  Mutual    A.CC.  Relief 

34  Fed.  Rep.  721.  Co..  148  Mass.   15:3;  19  N.  East.  Rep. 

SB.  &  O.  Relief  Ass'n  v.  TV>st,  122  169. 
Pa.  St.  579;  15  Atl.  Rep.  883. 


77-i  ACCIDENT    INSURANCE. 

whole  being  done  by  the  same  person.  The  fact  that  leather- 
cutting  is  more  hazardous  than  the  mercantile  portion  of  the 
insured's  business,  undoubtedly  served  to  fix  the  classification 
and  the  rate  of  indemnity,  but  can  not  control  the  provision 
in  respect  to  the  disability  which  shall  entitle  him  to  that  in- 
demnity. One  of  the  appended  provisions  on  the  face  of  the 
policy  is  that  he  shall  not  be  entitled  to  indemnity  '  beyond 
the  money  value  of  his  time.'  His  time  during  his  disability 
may  have  been  used  by  him  as  a  merchant  to  greater 
profit  than  if  he  had  continued  at  his  occupation  of  leather- 
cutting.  The  meaning  and  purpose  of  the  specification  that  he 
is  insured  under  the  '  medium'  classification  are  not  that  his 
occupation  is  specified  under  that  classification,  for  it  is  not; 
nor  is  the  specification  necessary  to  show  the  amount  he  is  to 
receive  in  case  of  an  accident  resulting  in  death  or  temporary 
disability,  for  that  has  already  been  distinctly  stated  just  be- 
fore. But  this  specification  derives  its  chief  significance  from 
the  provision  which  follows,  relating  to  his  engaging  in  some 
occupation  more  hazardous  than  those  enumerated  in  that 
classification.  It  does  not  do  away  with  the  statement  that 
he  is  insured  as  a  leather-cutter  and  merchant.  On  the  whole, 
we  are  of  the  opinion  that,  to  entitle  the  plaintiff  to  recover, 
he  must  show  a  disability  both  as  a  leather-cutter  and  as  a 
merchant." 

An  accident  policy  insured  against  death  or  total  disability 
resulting  from  bodily  injuries  effected  through  external,  vio- 
lent and  accidental  means.  The  "total  disability"  was  de- 
fined as  follows :  "  If  said  member  shall  sustain  bodily  injuries 
by  means,  as  aforesaid,  which  shall,  independently  of  all  other 
causes,  immediately  and  wholly  disable  and  prevent  him  from 
the  prosecution  of  any  and  every  kind  of  business  pertaining 
to  the  occupation  under  which  he  receives  membership." 
Plaintiff  in  the  contract  stated  his  occupation  to  be  that  of  a 
"retired,"  the  term  "gentleman"  or  the  equivalent  being 
evidentlv  omitted  by  clerical  error,  and  in  an  action  on  the 
policy  testified  that  he  had  no  occupation  except  to  amuse 
himself,  that  his  income  was  derived  from  investments,  that 
he  had  a  shop  at  his  house,  where  he  sometimes  amused  him- 
self, was  a  director  in  a  wagon  company  and  at  times  used 
some  of  its   machinery  in   connection  with   his   amusement. 


ACCIDENT    INSURANCE.  775 

While  operating  a  buzz-saw  at  the  wagon-shops,  he  received  a 
severe  and  painful  wound  on  the  back  of  the  hand  which  de- 
prived him  of  the  use  of  it  for  some  time.  It  was  held  that 
the  injury  was  not  covered  by  the  policy,  as  plaintiff  was  not 
totally  disabled,  and  prevented  from  any  and  every  kind  of 
business  pertaining  to  his  situation.1 

Provisions  of  the  constitution  and  by-laws  of  a  society  grant- 
ing benefits  "in  case  of  sickness,"  and  providing  that  "when 
any  member  takes  sick,"  he  shall  be  entitled  to  such  benefits 
"  if  it  be  so  that  he  is  not  able  to  attend  to  his  daily  labor,"  do 
not  extend  to  the  case  of  a  permanent  bodily  injury  which 
does  not  affect  the  general  health  of  the  person  injured.2  A 
contract  provided  for  benefits  in  case  the  insured  should  "  fall 
sick,  lame  or  blind,  or  be  otherwise  disabled  from  work."  The 
proof  showed  that  the  insured  was  "unable  to  work  by  reason 
of  natural  decay,"  but  it  was  held  that  incapacity  to  work 
arising  from  natural  decay,  as  the  result  of  old  age,  did  not 
entitle  him  to  benefits  under  the  contract.3 

§403.  Permanent  or  total  disability — Liberal  construc- 
tion.— Total  disability  from  the  prosecution  of  one's  usual  em- 
ployment means  inability  to  follow  his  usual  occupation,  busi- 
ness, or  pursuits  in  the  usual  way.  Though  he  may  do  certain 
parts  of  his  accustomed  work,  and  engage  in  some  of  his  usual 
employments,  he  may  yet  recover,  so  long  as  he  can  not  to  some 
extent  do  all  parts,  and  engage  in  all  such  employments.4 
A  contract  provided  that  the  assured  should  be  indemnified,  if 
he  should  receive  injuries  which  should  "  wholly  disable  and 
prevent  him  from  the  prosecution  of  any  and  every  kind  of 
business  pertaining  to  the  occupation  under  which  lie  is  insured." 
This  was  construed  to  mean,  not  that  he  must  be  so  disabled 
as  to  prevent  him  from  doing  anything  whatsoever  pertaining 
to  his  occupation,  or  any  part  of  his  business  pertaining  to  his 

i  Knapp  v.  Association,  6  N.  Y.  Court  of  Mass.),  8  Law  Reg.  (N,  S.)  288; 
Supp.  57.  1  Big.  Life  &  Air.  Ins.  Cas.  889.    This 

'  Kelly  v.  Ancient  Order  of  Hiber-  case  does  Tint  seem  tt>  haw  heen  ap- 
nians,  9  Daly  289.  pealed.     Hooper  v.    Ins.  Co.,  5  H.  & 

s  Dunkley  v.  Harrison,  56  Law  N.  (Exch.)  545;  affirmed  in  the  Exch. 
Times  Rep.  660.  Ch.  6H.&N.  839;  S.C.,  8Big.  L  &  A. 

4  May   on    Insurance,   §£  522,  523;  Cas.  573;   Wolcott  v.   Association,  8 
Bliss  on  Insurance,  §403;  Sawyer  v.  N.  Y.  Supp.  203. 
United  States  Casualty  Co.  (Superior 


776  ACCIDENT    INSURANCE. 

occupation,  but  that  he  must  be  so  disabled  as  to  prevent  him 
from  doing  any  and  every  kind  of  business  pertaining  to 
his  occupation.  The  court  said :  "  He  was  not  able  to 
prosecute  his  business,  unless  he  was  able  to  do  all  the  substan- 
tial acts  necessary  to  be  done  in  the  prosecution.  If  the  pros- 
ecution of  the  business  required  him  to  do  several  acts  and 
perform  several  kinds  of  labor,  and  he  was  able  to  do  and  per- 
form only  one,  he  was  as  effectually  disabled  from  performing 
his  business  as  if  he  could  do  nothing  required  to  be  done,  and 
while  remaining  in  that  condition  he  would  suffer  loss  of  time 
in  the  business  of  his  occupation.  *  *  He  was  not  required 
to  prove  that  his  injury  disabled  him  to  such  an  extent  that  he 
had  no  physical  ability  to  do  what  was  necessary  to  be  done  in 
the  prosecution  of  his  business,  but  *  it  was  sufficient  if  he  sat- 
isfied (the  jury)  that  his  injury  was  of  such  a  character  and  to 
such  an  extent  that  common  care  and  prudence  required  him  to 
desist  from  his  labors  and  rest  as  long  as  it  was  reasonably 
necessary  to  effectuate  a  speedy  cure,  so  that  a  competent  and 
skillful  physician  called  to  treat  him  would  direct  him  so  to 
do."  1  A  policy  provided  that  the  company  should  be  liable  if 
the  accident  should  "  cause  any  bodily  injury  "  to  the  insured,  of 
"  so  serious  a  nature  as  wholly  to  disable  him  from  following 
his  usual  business."  The  insured  sprained  his  ankle,  and  though 
confined  to  his  bedroom  for  some  weeks  by  the  injury,  was  at 
no  time  confined  to  his  bed.  He  was  a  solicitor  and  registrar 
of  a  county  court.  He  was  not  able  to  pass  his  accounts  as 
registrar,  nor  to  follow  his  usual  occupation  as  a  solicitor,  but 
he  read  and  gave  directions  to  his  clerks.  The  court  held  that 
he  was  wholly  disabled  within  the  meaning  of  the  policy, 
since  he  was  disabled  from  following  his  usual  business  in  the 
usual  way.3  Under  a  by-law  providing  that  if  a  member  should 
become  permanently  disabled  from  following  his  "  usual  or 
some  other  occupation"  he  should  be  entitled  to  a  certain  ben- 
efit, a  member  who  is  disabled  from  following  his  usual 
employment  is  entitled  to  it,  though  he  is  not  disabled  from 
following  some  other  occupation.3 

1  Young  v.  Travelers'  Ins.  Co.,  80  3Neill  v.  Order  of  United  Friends, 
Me.  244;  13  Atl.  Rep.  896;  6  N.  Eng.  28  N.  Y.  Supp.  928.  The  court  held 
Rep.  432.  that  the  expression  "some  other  oe- 

2  Hooper  v.  Ins.  Co.,  supra.  cupation"  was  not  the  equivalent  of 


ACCIDEXT    INSURANCE.  (  (  t 

On  a  policy  for  the  payment  of  a  certain  sum  weekly  during 
total  disability  from  accident,  a  physician  is  entitled  to  pay 
for  a  time  when  he  was  confined  to  his  bed  by  an  accident, 
though  during  that  time  he  occasionally  examined  and  pre- 
scribed for  patients  who  came  to  his  bedside,  and  at  times 
without  leaving  his  bed  reached  for  or  received  certain  medi- 
cines in  his  room,  which  he  advised  to  be  administered.1 

§404.  An  accident  policy  stipulated  for  the  payment  of  a 
specified  sum  for  disability  incurred  by  the  insured  while  en- 
gagedin  his  occupation  as  "an  ice  man,  proprietor,"  provided 
his  injuries  produced  total  inability  to  attend  to  the  employ- 
ment or  occupation  in  which  he  was  engaged.  The  court 
construed  the  language  above  quoted,  in  which  the  occupation 
of  the  insured  was  described,  to  mean  the  proprietor  of  an  ice 
business,  in  which  he  was  a  practical  laboring  ni.ii).  engaged 
in  theactual  delivery  of  ice  in  his  own  behalf;  and.  as  the  evi- 
dence showed  that  the  insured  was  not  able,  by  reason  of  his 
personal  injuries,  to  carry  on  the  business  of  delivering  ice.  it 
was  held  that  he  was  totally  disabled  within  the  meaning  of 
the  policy;  although,  notwithstanding  his  injuries,  he  was  able 
to  give  general  directions  to  a  person  who  took  his  place  as  an 
ice  man  during  the  period  of  his  disability."  A  policy  provided 
that  if  the  insured  should  from  violent  and  accidental  injury 
suffer  "  the  loss  of  two  entire  feet,"  he  should  be  paid  ;i  cer- 
tain sum  of  money,  and  it  was  held  that   where    he  was    acci- 

"  all  other  occupations,"  and  was  of  But  the  same  rule  would  not  apply  to 

opinion  that  the  Language  of  the  pro-  the  caseof  a  professional  man,  whose 

vision  of  the  contract  was  chosen  for  duties    require  the  activity  of    the 

the  purpose  of  raising  disputes  as  to  brain,   and  which   is  not  necessarily 

tlic  right  of  a  beneficiary  to  recover,  impaired  by  serious  physical   injury, 

rather  than  to  make  plain  the  intent  If  a  person  engaged  in  the  general 

and  meaning  of  the  contract.  practice  of  medicine  and  surgery   is 

'Wolcott   v.  Association,  8   X.  Y.  unable  to  go  about  his  business,  enter 

Supp.  263.     In  it>  i  pinion  the  courl  his  office  and   make  calls   upon    bis 

sai.l:  "Total  disability  must,  of  the  patients,  but  is  confined  to  the  bed,  as 

necessity   <■('  the  ease.  !»•  ;1    relative  in  this  instance,  and  enabled  only  to 

matter,   and    musi   depend    largely  exercise  his  mind  on  occasional  ap- 

nj.on    the  occupation  and    employ-  plications  to  bira  for  advice,  he  may 

iiani  in  which  the  party  insured  is  be  said  to  be  totally  disabled,  within 

engaged.    One    can    readily  under-  the  meaning  of  the  provisions  of  this 

stand  how  a  person  who  labors  with  policy." 

Ins  hands  would  l>«-  totally  disabled  'Neafie  v.  Accident  Indemnity  Co., 

only  when  he   can  not  labor   at   all.  £  jft  y   Supp.  202. 


778  ACCIDENT    INSURANCE. 

dentally  shot  in  the  back,  and  the  injury  produced  total  pa- 
ralysis of  the  lower  part  of  the  body  and  entirely  destroyed  the 
use  of  both  feet,  he  had  suffered  the  loss  of  two  entire  feet 
within  the  meaning  of  the  contract.1  For  the  "  total  and  per- 
manent loss  of  the  sight  of  both  eyes  "  an  accident  insurance 
society  agreed  to  pay  a  member  one  thousand  dollars.  Before 
taking  the  insurance  he  had  lost  the  sight  of  one  eye,  and  this 
fact  was  known  to  the  society.  Subsequently  he  lost  the  sight 
of  the  other  eye.  The  court  held  that  he  was  entitled  to  re- 
cover the  amount  of  the  policy.11 

1Sheanon  v.  Ins.  Co.,  77  Wis.  618;  and  this  was  just  as  complete  in  the 

46  N.  W.  Rep.  799.  plaintiff's  case  as  though  both  eyes 

2  Humphreys  v.    Association,   139  had  been  lost  during  the  life  of  the 

Pa.    St.    264;  20  Atl.  Rep.  1047.     In  policy.     Assuming  that  the  company 

passing   upon    the    question  of    the  intended  to  insure  the  plaintiff  against 

liability  of  the  society  the  court  said:  something,  and  that  that  something 

"  It  is  evident  the  plaintiff  was  seek-  was  the  loss  of   his  sight,  the  most 

ing  insurance  against  the  total  and  that  can  be  said  is  that  having  but 

permanent  loss  of  his    sight.      The  one    eye    the   risk    was    increased; 

company  insured  him  against  that  but  the  risk  was  not  increased  after 

or  it  did  not  insure  him  at  all,  which  the  policy  was  issued.     The  general 

is  not  to  be  considered.     There  ap-  agent  knew  precisely  what  the  risk 

pears  to  have  been  no  fraud  or  con-  was  when  he  took  it,  and  neither  he 

cealment  practiced  by  the  plaintiff  nor  the  company  can  be  now  heard 

upon  the  company,  and  we  are  not  to  aver  that  the  risk  was  greater  in 

willing  to  believe  that  the  latter  took  the  case  of  a  man  with  one  eye  than 

his  premium  without  giving  any  in-  of  one  with  two.     There  can  be  no 

surance  as  regards  his  eyesight.    The  reasonable  doubt  that  the  plaintiff 

loss  of  one  eye  to  him  was  precisely  paid   his  premium,  and  accepted  the 

the  same  as  the  loss  of  both  eyes  by  policy  under  the  belief  that  the  words 

an  ordinary  man.     It  is  total  blind-  '  total  and  permanent  loss  of  the  sight 

ness  in  either  case.     There  is  no  pro-  of  both  eyes '  were  equivalent  to  the 

vision  in  the  policy  for  the  loss  of  one  loss  of  eye-sight.   He  had  a  right  to  as- 

eye,  as  there  is  for  the  loss  of  one  arm  sume  this  in  view  of  the  fact  that  the 

or  one  leg.    The  reason  is  plain.    The  policy  was  issued  to  him  with  knowl- 

loss  of  one  eye  does  not  produce  a  edge  on  the  part  of  the  general  agent 

total  and  permanent  loss   of  sight,  that  he  had  but  one  eye.     *    *    Is  it 

For  all  practical  purposes  a  man  with  reasonable  that  the  parties  did  not 

one  eye  can  still  follow  his  occupa.  intend  the  policy  to  cover  the  matter 

tion  and  gain  his  living,  while  the  of  eye-sight  at  all?    Yet  this  is  the 

loss  of  an  arm  or  leg  is  a  disability  conclusion  we  must  come  to,  if  we 

which  seriously  interferes  with  his  sustain  the  defendant's  contention, 

ability  to  earn  his  bread;  hence  it  *    *    When  the  words  are,  without 

was  that    the    policy    provided,   or  violence,  susceptible  of  two  interpre- 

rather  defined  the  loss  of  sight  as  the  tations,  that  which  will  sustain  his 

loss  of  both  eyes.     It  was  the  loss  of  claim,  and  cover  the  loss,  must    in 

sight   which  was    insured    against,  preference  be  adopted." 


ACCIDENT   INSURANCE.  779 

A  switchman  on  a  railroad,  by  the  loss  of  the  fingers  of  one 
hand,  is  disabled,  within  a  provision  of  the  constitution  of  a 
society,  stating  that  "a  member  who, by  reason  of  a  disability 
*  *  *  becomes  unable  to  direct  or  perform  the  kind  of  busi- 
ness or  labor  which  he  has  always  followed,  and  by  which 
alone  he  can  thereafter  earn  a  livelihood,  shall  be  deemed  enti- 
tled to  disability  benefits,"  and  whether  he  can  earn  a  liveli- 
hood b}^  some  other  business  is  a  question  of  fact  for  the  jury.' 

A  certificate  of  membership  in  an  accident  insurance  associ- 
ation provided  for  relief  for  accident  resulting  in  "  total  per- 
manent" or  "partial  permanent"  disablement,  and  there  was 
no  provision  in  the  certificate  itself  for  the  payment  of  any 
benefits  for  an  injury  which  resulted  in  partial  disablement 
unless  it  was  also  of  a  permanent  character.  It  was  held  that 
the  liability  of  the  company  was  not  enlarged  so  as  to  embrace 
cases  of  merely  partial  disablement  of  a  temporary  character  by 
an  indorsement  on  a  certificate,  which  provided  that  if  the  mem- 
ber shall  sustain  bodily  injuries,  whether  partially  or  totally 
disabling,  "  by  means  as  provided  for  in  this  certificate,"  the 
payment  of  the  weekly  relief  should  exonerate  the  company 
from  all  further  liability,  followed  by  a  schedule  designating 
different  kinds  of  injuries,  with  a  specified  period  of  relief  for 
each,  and  a  statement  that  "  injuries  not  included  in  the 
above  schedule  will  be  adjusted  on  their  "merits."  2  A  contract 
stipulated  for  the  payment  of  a  certain  sum  "  in  case  of  total 
disability."  Insured,  an  old  man,  was  attacked  with  bron- 
chitis and  asthma,  and  the  proof  showed  that  he  was  perma- 
nently disabled  from  doing  any  manual  labor.  It  was  held 
that  the  disability  was  within  the  terms  of  the  contract.3  The 
fact  that  the  insured  could  pursue  his  usual  occupation  by 
wearing  a  mechanical  appliance  will  not  lessen  the  character 
of  the  disability  as  a  total  one,  when  the  use  of  the  appliance 
would  endanger  his  life,  or  would  subject  him  to  intolerable 
discomfort.4 

§405.  A  clause  in  an  application  for  mutual  accident  in- 
demnity, agreeing  that  the   benefits  to    which  the  applicant 

■Hutchinson  v.  Supreme  Tent,  22  s  Dotlds  v.  Aid  Association,  19  On- 
N.  Y.  Supp.  801,  tario  Repts.  70. 

'Hollobaugh  v.  Association,  138  * McMahon  v.  Supreme  Council,  64 
Pa.  St.  5<Jo;  22  Atl.  Rep.  20.  Mo.  App.  168. 


780  ACCIDENT    INSURANCE. 

shall  become  entitled,  shall  be  governed  and  paid  in  the  same 
ratio  that  his  income  shall  bear  to  the  amount  of  indemnity 
insured,  is  binding  on  the  insured,  though  the  agent  of  the 
society,  by  false  statements  as  to  the  income  of  the  insured, 
has  placed  him  in  a  higher  class,  paying  larger  premiums.1 

§  400.  A  company  may  be  liable  for  sick  benefits,  though 
not  liable  for  the  death  of  the  insured — Death  within 
ninety  days. — A  policy  dated  October  5,  1S06,  "for  the  period 
of  twelve  months  "  was  made  "  against  loss  of  life  "  of  the  in- 
sured, in  a  sum  payable  to  his  widow  on  proof  "  that  the 
assured  at  any  time  after  the  date  hereof,  and  before  the  ex- 
piration of  this  policy,  shall  have  sustained  personal  injury 
caused  by  any  accident,"  "and  such  injuries  shall  occasion 
death  within  ninety  days  from  the  happening  thereof."  By 
an  accident  which  happened  on  December  11,  1866,  the  in- 
sured had  his  arm  crushed,  and  he  continued  to  be  absolutely 
and  totally  disabled  from  the  prosecution  of  his  usual  employ- 
ment until  March  12,  1867,  when  he  died  from  the  results  of 
the  injury.  It  was  held  that  by  no  method  of  computation  of 
time  could  the  death  be  regarded  as  occurring  within  ninety 
days  from  the  happening  of  the  accident;  that  when  time  is 
computed  from  an  act  done,  the  general  rule  is,  to  include  the 
day,  but  when  it  is  computed  from  the  day  of  the  act  done, 
the  day  is  excluded;  that  the  language  of  the  policy  required 
that  the  computation  be  made  from  the  time  of  the  act  done, 
namely,  the  accident."  2  The  policy  further  insured  "  against 
personal  injury,  in  the  sum  of  $10  per  week,  for  a  period  not 
exceeding  altogether  twenty-six  weeks  for  any  single  accident, 
within  the  meaning  of  this  policy  and  the  conditions  hereto 
annexed,  by  which  the  assured  shall  sustain  any  personal  in- 
jury which  shall  not  be  fatal,  but  which  shall  absolutely  and 
totally  disable  him  from  the  prosecution  of  his  usual  employ- 
ment." An  action  was  brought  to  recover  $130,  being  $10  a 
week  for  each  of  thirteen  weeks  during  which  the  insured  was 
absolutely  and  totally  disabled  from  the  prosecution  of  his 
usual  employment.  The  defendants  admitted  that  the  plaintiff 
was  entitled  to  recover  unless  the  fact  that  the  accident  was 
fatal  constituted  a   defense.     The   court   held  that  the  policy 

1  Howe  v.  Society,  7  Ind.  App.  586;       2  Perry  v.  Provident  Life,  99  Mass. 
34  N.  East.  Rep.  830.  162. 


ACCIDENT    INSURANCE.  781 

covered  two  classes  of  injuries,  namely,  those  which  occasioned 
loss  of  life  within  ninety  (lavs,  and  those  which  should  not  be 
fatal;  that  the  two  provisions  should  be  construed  together; 
that  the  evident  intent  was,  that,  if  an  injury  happened 
within  the  meaning  of  the  policy,  it  was  insured  against  as 
coming  within  one  class  or  the  other;  that,  if  it  was  otherwise 
construed,  an  injury  which  should  not  prove  fatal  within 
ninety  days  would  furnish  no  ground  of  action  until  it  should 
be  made  to  appear  that  it  would  never  prove  fatal,  and  this 
would  render  the  insurance  nugatory  in  such  cases.1  In  an 
action  on  an  accident  policy,  which  provided  for  payment  for 
death  only  when  the  death  occurred  within  ninety  days  after  the 
accident,  it  was  shown  that  the  death  occurred  on  June  20th, 
and  the  accident  occurred  either  on  March  23d  or  March  30th. 
Before  the  insured's  death,  his  wife,  who  was  the  beneficiary 
under  the  policy,  had  written  to  the  company  to  claim  indem- 
nity for  loss  of  time.  In  this  letter  she  stated  that  the  acci- 
dent occurred  on  March  23d.  The  accident  did  not  incapaci- 
tate the  insured  from  labor  until  fully  a  week  after  it  occurred . 
It  was  held  that  the  letter  did  not  conclude  the  beneficiary 
from  showing  that  the  injury  was  received  on  March  30th.2 

'Perry  v.  Provident  Life.  103  Mass.        'American   Ace.    Ins.   Co.  v.  Xor- 
242;  S.  C,  2  Big.  L.  &  A.  Cas.  71.  ment,  91  Tenn.  1;  18  S.  W.  Rep. 


CHAPTER  XXX. 


ACCIDENT  INSURANCE. 

§  407,  408.  Occupation  of  the  insured. 

409,  410.  Change  of  occupation. 

411-414.  Change  of  occupation;  classified  risks. 

415-418.  Notice  of  injury  or  death. 

419.  Waiver  of  notice. 

420.  Payment  of  claim  from  a  special  fund  or  in  a  special 

manner. 

§  407.  Occupation  of  the  insured. — The  occupation  of  the 
applicant  for  insurance  is  a  fact  material  to  the  risk,  and,  Avhen 
he  is  asked  to  state  his  occupation,  he  must  do  so  with  sub- 
stantial accuracy.1  The  occupation  of  the  applicant  to  be  dis- 
closed in  his  answer  is  that  in  which  he  is  engaged  at  the  time 
of  effecting  the  insurance;2  but  this  rule  does  not  cover  mere 
temporary  suspension  of  the  general  occupation.3  When  a 
society  desires  to  protect  itself  from  all  liability,  except  for 

1  Dwight  v.  Ins.  Co.,  103  N.  Y.  341;    see  Virginia  Ins.  Co.  v.  Buck,  88  Va. 

517;  13  S.  E.  Rep.  973;  Holland  v. 
Supreme  Council,  54  N.  J.  L.  490;  25 
Atl.  Rep.  367. 

3  In  Mowry  v.  Ins.  Co. ,  7  Daly. 
(N.  Y.)321,  the  applicant  answered 
that  he  was  manufacturing.  It  was 
held  that  a  breach  was  not  shown  by 
proof  that  he  was  at  that  time  keep- 
ing a  billiard  saloon,  when  he  had  for 
years  previous  been  a  manufacturer 
of  soda  water,  and  was  about  to  re- 
sume that  business.  The  court  laid 
stress  upon  the  fact  that  the  term 
"  manufacturer  "  was  very  vague  and 
conveyed  no  definite  idea  of  his  occu- 
pation, and  said  that  if  the  present 
occupation  of  the  applicant  had  been 
asked  for  the  breach  would  have  been 
undoubted. 


Hartman  v.  Ins.  Co.,  21  Pa.  St.  466; 
Grattah  v.  Ins.  Co.,  80  N.  Y.  281; 
Kenyon  v.  Ins.  Co.,  122  N.  Y.  247; 
United  Brethren  v.  White,  100  Pa. 
St.  12;  Holland  v.  Chosen  Friends,  54 
N.  J.L.  490.  An  applicant  answered 
that  he  was  a  grocer.  He  was  so  in 
fact,  but  he  also  sold  liquors  in  a  room 
in  his  grocery.  It  was  held  that  the 
answer  was  not  to  be  regarded  as 
false.  McGurk  v.  Ins.  Co. ,  56  Conn. 
528;  Flynn  v.  Ins.  Co.,  78  N.  Y.  568; 
Perrins  v.  Society,  2  El.  &  El.  317. 
Where  true  occupation  is  known  to 
agent  and  misrepresented  by  him  to 
the  company,  the  latter  is  bound. 
See  Wright  v.  Ins.  Co.,  91  Ky.  208. 

2  Hartman  v.  Ins.  Co.,  supra; 
United  Brethren  v.  White,  supra; 
Provident  Life  v.  Fennell,  49  111.  180; 


(782) 


ACCIDENT    INSURANCE.  783 

accidents  occurring  in  a  particular  occupation,  or  when  it  de- 
sires to  protect  itself  from  liability  for  accidents  occurring  in 
certain  occupations,  it  must  expressly  so  stipulate  in  the  con- 
tract of  insurance.  If  the  society  insures  against  accidents 
generally,  and  does  not  provide  that  the  insured  may  not  change 
his  occupation,  a  change  in  his  occupation,  whether  affecting 
the  risk  or  not,  does  not  avoid  the  policy.  Under  such  a  con- 
tract of  insurance,  it  is  immaterial  that  the  insured  was  a 
"switchman"  when  the  contract  was  entered  into,  and  was 
killed  while  in  the  performance  of  the  duties  of  a  "  brake- 
man."  '  The  mere  statement  as  to  his  occupation,  made  by  an 
applicant  for  insurance,  is  a  representation  of  a  fact  as  it  then 
exists,  but  it  does  not  amount  to  a  contract  that  he  will  do  no 
act  not  connected  with  such  occupation,  or  that  he  will  not 
engage  in  any  different  one.2  Where  the  by-laws  of  a  society 
contain  nothing  in  regard  to  a  change  of  occupation  by  a 
member,  do  not  state  the  effect  which  shall  follow  his  engag- 
ing in  a  more  hazardous  occupation  than  that  in  which  he  was 
engaged  when  he  became  a  member,  but  merely  state  that  in 
order  to  become  a  member,  an  applicant  must  be  engaged  in 
a  lawful  occupation  which  is  not  hazardous,  it  may  not  be  said 
that  hazardous  occupations  are  forbidden  by  necessary  impli- 
cation, and  that  a  forfeiture  of  membership  must,  therefore, 
follow  the  adoption  of  such  an  occupation.  Conditions  of 
forfeiture  must  be  set  out  in  terms,  and  are  never  extended  by 
construction.3  Where  certain  occupations  are  classed  as  non- 
insurable  by  an  accident  insurance  company,  a  certain  alleged 
trade  or  occupation,  not  mentioned  in  the  manual  of  classifi- 
cation prepared  and  adopted  I  >y  it,  is  not  classed  as  non-in- 
surable.'1 

§  4:08.  It  is  a  matter  of  common  observation  that  in  large 
cities  men  work  in  special  branches  of  certain  trades,  while 
in  smaller  places,  a  man  in  a  certain  trade  works  in  the  several 
brandies.  In  a  city  a  man  may  be  a  shingler,  a  lather,  or  a 
stairlmilder.  and    may  do  no  other  carpenter's   work,   while  a 

1  Provident  Life  Ins.  Co.  v.  Fennell,  47   X.   W.   Rep.  988;  San  ford    v.  A- 

49  111.  180.  sociation.  68  <  Sal.  548;  >«■.■  ,i  166. 

8  Provident  Life  v.  Fennell,  supra;  'Wilson  v.   Association,  53  Minn. 

Provident  Life  v.  Martin,82  Md.  BIO.  470:  55  N.  W.  Rep.  6:20. 

s  Hobbs  v.  Association,  82  Iowa  107; 


784  ACCIDENT    INSURANCE. 

carpenter  ordinarily  shingles  roofs,  puts  on  laths  and  builds 
stairs.  It  is  usually  a  mason's  work  to  point  up  and  finish 
brick  walls,  though,  in  cities,  there  are  men  who  do  only  the 
work  of  pointing  and  finishing  walls  of  large  and  elegant 
buildings.  Where  the  classification  prepared  and  adopted  by 
the  accident  company  does  not  divide  these  several  branches 
into  separate  occupations  or  trades,  a  recovery  can  not  be  de- 
feated, in  a  suit  on  a  policy,  because  the  insured  voluntarily 
exposed  himself  to  the  dangers  incident  to  work  in  a  special 
branch  of  his  trade.'  Where  a  person  is  insured  in  a  certain 
class  or  occupation,  the  company  assumes  the  risk  of  accidents 
to  him  from  the  dangers  incident  to  such  class  or  occupation. 
Voluntary  exposure  to  such  incident  dangers  is  contemplated 
by  both  parties  to  the  contract.2  A  person  who  is  classified 
and  insured  under  an  accident  policy,  in  a  certain  occupation, 
may  rightfully  do  whatever  is  customary,  under  like  circum- 
stances, among  reasonable,  prudent  persons  of  like  occupa- 
tion; and  in  an  action  on  the  policy  for  injuries  received  in  his 
occupation,  it  is  not  prejudicial  error  to  permit  him  to  show 
what  is  common  practice  among  persons  in  that  occupation.3 
When  an  application  for  accident  insurance  states  that  the  ap- 
plicant is  a  conductor  on  a  passenger  train,  and  contains  noth- 
ing indicating  that  the  policy  will  have  any  restrictions 
against  entering  and  leaving  moving  trains,  such  risks  will  be 
held  to  be  insured  against;  and  if  an  action  is  brought  on 
the  contract  made  by  the  application  and  its  acceptance,  re- 
covery may  be  had  for  an  accident  caused  by  such  risk, 
though  it  is  excluded  by  the  policy.  Where,  however,  action 
is  brought  on  the  policy,  and  the  accident,  though  alleged  not 
to  have  happened  from  such  risk,  is  shown  to  have  been  so 
caused,  recovery  can  not  be  had  under  the  pleadings.4 

A  policy  of  life  insurance,  conditioned  that  the  insured 
should  not,  without  the  written  consent  of  the  insurers  first 
obtained,  engage  in  any  sea  service,  had  annexed  to  it  a  per- 

1  Wilson  v.  Association,  supra.  *  Dailey  v.  Preferred  Masonic  (Mich. 

-  See  Dailey   v.  Preferred  Masonic  57   N.   W.   Rep.    184.     In   this   case, 

(Mich.),  57  N.  W.  Rep.  184.  though  the    contract  was  complete 

3  Pacific  Mutual  v.  Snowden,  58  and  the  policy  forwarded  by  mail, 
Fed.  Rep.  342;  Wilson  v.  Association,  it  did  not  reach  its  destination  until 
sajirit;  National  Association  v.  Jack-  after  the  death  of  the  insured  mem- 
son,  114  111.  533;  2  N.  East.  Rep.  414.  ber. 


ACCIDENT    INSURANCE.  785 

mit  to  engage  in  sea  service  on  "  the  prior  payment  any  year 
of  an  additional  premium."  The  insured  paid  the  first  addi- 
tional premium  and  continued  in  sea  service  for  more  than 
a  year  without  payment  of  another  additional  premium.  It 
was  held  that  the  policy  was  forfeited.'  A  policy  stipulated 
that  it  was  to  be  void  "  as  to  all  accidents  occurring  in  an y 
occupation,  profession,  or  employment  or  exposure  not  named, 
or  incident  to  the  occupation  under  which  he  receives  mem- 
bership." The  insured,  who  stated  his  occupation  to  be 
that  of  a  retired  gentleman,  was  injured  while  operating  a 
buzz  saw  for  his  own  amusement.  It  was  held  that  the  opera- 
tion of  the  buzz  saw  was  not  incident  to  the  occupation  or  con- 
dition of  a  retired  gentleman."  An  applicant  stated  that  his 
occupation  was  that  of  a  "  livery  stable  proprietor  (not  work- 
ing)," and  that  his  duties  were  "  such  as  were  required  of  him 
in  that  occupation."  The  evidence  showed  that  he  hired  men 
to  do  the  work  about  his  stable,  though  he  sometimes  hitched 
up  a  horse,  and  drove  persons  out.  It  was  held  that  this  state- 
ment of  his  duties  sufficiently  apprised  the  company  of  their 
character,  and  that,  if  anything  more  definite  was  required,  it 
was  the  duty  of  the  compan}T  to  ascertain  the  facts  by  proper 
inquiry.3  An  accident  policy  contained  the  following  condi- 
tion :  "  This  insurance  does  not  cover  entering,  or  trying  to 
enter  or  leave,  a  moving  conveyance  using  steam  as  motive 
power;  *  *  *  railroad  employes  excepted."  Assured  was 
baggage  checker  of  a  transfer  company.  His  business  required 
him  to  meet  and  board  incoming  trains,  and  check  baggage 
to  other  railroad  lines,  and  to  residences  in  the  city.  It  was 
held  that  assured  was  a  railroad  employe,  within  the  meaning 
of  the  foregoing  exception.  The  words  of  such  an  exception 
have  reference  to  the  character  of  employment,  rather  than  to 
the  corporation  who  is  the  employer.4  The  term  "  supervising 
farmer,"  in  the  classification  of  risks,  covers  a  person  who 
employs  farm  laborers  and  does  but  little  work  himself.6     The 

1  Ay er  v.  N.  Eng.  Mutual,  109  Mass.  *  Gotten  v.    Casualty  Co.,   41   Fed. 
430.  Rep.  506. 

2  Knapp  v.  Association,    6  N.   Y.  4  National  Accident  Soc.  v.  Taylor, 
Supp.  57.  42  111.  App.  97. 

3  Brink  v.  Accident  Association,  7 
N.  Y.  Supp.  847. 

50 


786  ACCIDENT   INSURANCE. 

jury  were  warranted  in  finding  that  insured  was  not  "a  grocer 
delivering  goods,  by  occupation,"  so  as  to  reduce  his  maximum 
death  indemnity  under  the  policy,  when  there  was  evidence 
that,  though  insured  occasionally  delivered  goods,  his  son  de- 
livered the  most  of  them.1  The  word  "  occupation,"  as  used 
in  accident  policies,  must  be  held  to  have  reference  to  the  voca- 
tion, profession,  trade  or  calling  in  which  the  assured  is  engaged 
for  hire,  or  for  profit,  and  the  statement  of  his  occupation  by 
the  insured  does  not  preclude  him  from  the  performance  of 
acts  and  duties  which  are  simply  incidents  connected  with  the 
daily  life  of  men  in  any  or  all  occupations.2 

§  409.  Change  of  occupation. — A  change  of  occupation 
means  "  an  engaging  in  another  employment  as  a  usual  busi- 
ness." It  does  not  apply  to  temporary  employments  during 
leisure  hours,  to  acts  done  outside  of.  one's  usual  and  ordinary 
business,  or  to  casual  employment  in  a  different  business.  A 
teacher  out  of  employment,  who  builds  one  or  two  houses  by 
contract,  and  superintends  them,  does  not  thereby  change  his 
occupation  and  become  a  builder.3  And  an  engineer  who 
leaves  his  cab  on  a  locomotive  engine  to  perform  the  duty  of 
a  brakeman,  while  his  train  is  in  motion,  does  not  thereby 
change  his  occupation.4  In  his  application  assured  stated  his 
occupation  to  be  an  "  earthenware  manufacturer."  There  was 
no  evidence  that  he  had  changed  his  occupation,  but  the  proof 
was  that,  while  on  a  visit  at  a  farm,  he  had  assisted  in  loading 
hay,  and  in  so  doing  had  received  his  fatal  injury.  It  was 
held,  that  there  had  been  no  change  of  occupation  within  the 
meaning  of  the  policy.5  A  farmer,  living  on  the  shore  of 
Lake  Ontario,  was  insured  as  a  farmer.  A  schooner  was 
driven  aground,  about  one  hundred  rods  from  the  shore,  by  a 
storm.  A  flag  of  distress  was  exhibited,  and  the  insured,  who 
lived  near,  went  with  his  neighbors  to  rescue  the  crew,  con- 
sisting of  eight  men  and  one  woman.  In  so  doing  he  was 
drowned.  The  policy  provided  that  the  liability  should  not 
extend  to  any  injuries  received  by  the  insured  "  while   era- 

1  Hall  v.  Am.  Ace.  Association,   86  4  Provident  Life  v.  Martin,  32   Md. 

Wis.  518;  57  N.  W.  Eep.  366.  310. 

*  Union  Mutual  v.  Frohard,  134  111.  5  N.  A.  Life  v.  Burroughs,  69  Pa. 

228.  St.  43. 

3  Adm'rs  of  Stone  v.  Casualty  Co., 
34  N.  J.  L.  (5th  Vroom)  371. 


ACCIDENT    INSURANCE.  7S» 

ployed  in  wrecking."  The  court  said:  "lie  was  a  farmer 
and  not,  by  occupation,  a  wrecker.  As  well  might  a  farmer 
who  should  be  smothered  in  attempting  to  rescue  his  neigh- 
bors from  their  burning  dwelling  be  called  a  fireman  as  this 
man  a  wrecker."  '  A  land  .owner  building  a  bridge  on  his 
farm  can  not  be  said  to  have  changed  his  occupation  from  that 
of  a  farmer  to  that  of  a  bridge  builder,  and  a  person  driving  a 
post  by  means  of  an  axe  or  sledge  is  not  engaged  in  the  occu- 
pation of  a  pile  driver.2  A  farmer  does  not  change  his  occu- 
pation by  acting  temporarily  as  superintendent  of  police  at  a 
state  fair.3 

An  accident  policy,  providing  for  the  payment  of  a  specified 
sum  for  disability  incurred  while  engaged  in  his  occupation  as 
"  an  ice  man,  proprietor,"  covers  accidents  occurring  to  the  in- 
sured, who  is  the  proprietor  of  an  ice  business,  while  engaged 
in  the  delivery  of  ice,  though  the  rules  of  the  company  provide 
that  a  proprietor  may  insure  at  a  fixed  rate,  while  one  deliver- 
ing ice  can  not  receive  so  large  a  weekly  sum.* 

'Tucker  v.   Ins.  Co.,  50  Hun  50;  4  and  his  ability  to  earn  moneys.    The 

N.  Y.  Supp.  505;   23  N.  Y.  St.  Reptr.  weekly  payments  provided  for  by  the 

957.  policy    are  graduated  according    to 

2  National  Accident  Soc.  v.  Taylor,  the  ability  of  the  party  insured  to 
42  111.  App.  97.  earn  money  in  his  employment,  or 

3  Travelers'  Association  v.  Kelsey,  occupation  or  profession.  There  is  a 
46  111.  App.  371.  provision  in  the  policy  that  if  a  per- 

4Neafie  v.  Accident  Indemnity  Co.,  son  receives  an  injury  while  engaged 
8  N.  Y.  Supp.  202:  55  Hun  111.  This  temporarily  or  otherwise  in  ;in  occu- 
decision  is  placed  upon  the  exact  pation  or  employment  classified  as 
terms  of  the  statement  of  the  occu-  more  hazardous  than  the  one  stated 
pation  of  the  insured.  The  court  in  his  application  indemnity  shall  be 
said:  "The  expression  which  is  afforded  only  at  the  rate  provided 
used  in  the  policy  is  not  that  of  a  for  the  occupation  or  employment  in 
mere  proprietor,  who  conducts  a  which  the  injury  is  received.  No 
general  ice  business  by  advices  from  partial  defense  is  available  to  the  de- 
his  office,  but  on  the  contrary,  it  was  fendant  under  this  provision  for  the 
that  of  an  ice  man,  or  a  man  who  reason  that  our  construction  of  the 
might  be  a  deliverer  of  ice,  and  who  language  above  quoted  is  that  the 
was  at  the  same  time  the  owner  or  occupation  or  employment  of  the 
proprietor  of  such  business.  The  plaintiff  as  an  ice  man.  adding  the 
plaintiff  received  the  injuries  while  words  'as  proprietor,'  did  not  de- 
engaged  in  the  manual  duties  per-  scribe  him  as  only  engaged  in  the 
taining  to  the  delivery  of  ice  to  his  management  of  a  business,  hut  was 
customers.  The  circumstance  that  broad  enough  to  include  a  practical 
lie  was  the  proprietor  is  important  and  laboring  man.  engaged  in  the 
only  as  showing  the  value  of  his  time,  actual  delivery  of  ice  in  his  own  be- 


788  ACCIDENT   INSURANCE. 

§  410.  Verbal  testimony  is  not  admissible  to  prove  an 
agreement  on  the  part  of  an  applicant  for  insurance  that  he 
would  not  act  in  certain  capacities  and  in  certain  lines  of 
labor,  when  the  written  contract  does  not  embody  such  an 
agreement.  Evidence  of  a  verbal  agreement  pertaining  to 
the  subject-matter  of  a  written  contract,  made  before  or  at  the 
time  of  the  execution  of  the  written  contract,  and  not  embraced 
therein,  is  not  admissible  for  the  purpose  of  restricting,  en- 
larging, or  in  any  way  varying  the  terms  of  the  written  con- 
tract, and  this  rule  applies  as  well  to  an  insurance  contract  as 
to  any  other.1  An  applicant  having  stated  his  occupation  to 
be  that  of  "  machinist  and  railroader,"  and  it  being  so  written 
down  in  the  application,  the  fact  that  he  agreed  to  strike  out 
the  word  "  railroader "  is  not  a  defense  to  an  action  on  the 
policy,  as  this  was  not  equivalent  to  an  agreement  not  to  act 
as  brakeman  on  a  railroad,  and  the  striking  out  of  the  word 
"  railroader  "  could  not  have  obliterated  the  knowledge  of  the 
company  that  the  applicant  was  acting  as  a  brakeman.2 

§  411.  Change  of  occupation — Classified  risks. — It  is  com- 
petent for  the  parties  to  a  contract  of  accident  insurance  to 
agree  that  if  the  insured  shall  be  injured  in  any  occupation 
rated  by  the  association  as  more  hazardous  than  that  given  by 
the  insured  as  his  occupation,  his  insurance  shall  only  be  as 
much  as  the  premium  paid  will  purchase  at  the  rate  fixed 
bv  the  association  in  its  tables  for  such  increased  hazard.  The 
contract  of  insurance  depends  essentially  upon  an  adjustment 
of  the  premium  to  the  risk  assumed,  and  it  is  proper  for  an 
association  to  provide  against  an  increase  of  risk  after  the 
issuing  of  its  contract.3 

The  following  provision  was  in  the  body  of  a  certifi- 
cate :     "  If  the  insured  member  be  fatally  injured,  while  doing 

half.  Had  he  not  been  actually  the  2  National  Association  v.  Heck- 
proprietor  of  his  own  business,  then,  man,  86  Ky.  254;  see  Wright's  Admr 
doubtless,  the  policy  would  not  have  v.  Ins.  Co.,  91  Ky.  208;  15  S.  W.  Rep. 
provided  any  payment  to  him  above  242. 

five  dollars  a  week,  placing  him  in  3  Standard  Life  v.  Martin,  133  Ind. 

a  class  of  mere  laborers."  376;  33  N.  East.  Rep.  105;  Aldrich  n. 

1  Insurance  Co.  v.   Mowry,   96  U.  Association,   149    Mass.  457 ;    21  N. 

S.  544;   White  v.  Ashton,  51  N.  Y.  East.  Rep.  873. 
280;   White  v.  Walker,  31  111.    422; 
National    Mutual  v.    Heckman,    86 
Ky.  254. 


ACCIDENT   INSURANCE.  TS9 

or  performing  any  act  or  thing  pertaining  to  an  occupation 
classed  by  this  association  as  more  hazardous  than  the  occu- 
pation under  which  this  certificate  is  issued,  the  insured  mem- 
ber, or  his  beneficiary,  as  the  case  may  be,  shall  be  entitled  only 
to  the  indemnity  of  the  class  in  which  such  more  hazardous 
occupation  is  classified  by  this  association."  The  member  was 
insured  as  a  stationary  engineer  in  class  3.  The  occupation 
of  a  wood-chopper  was  placed  in  class  5,  and  rated  as  more 
hazardous.  While  chopping  wood  for  his  own  use  in  a  place 
made  slippery  by  the  sleet  and  hail  which  had  fallen,  the  in- 
sured slipped,  fell  across  a  log  and  immediately  died.  It  was 
claimed  by  the  society  that  the  insured  was  fatally  injured  while 
doing  an  act  pertaining  to  an  occupation  classed  by  it  as  more 
hazardous  than  the  occupation  under  which  the  certificate 
was  issued,  and  that  the  indemnity  of  the  class  in  which  such 
more  hazardous  occupation  was  classified  was  all  that  could 
be  recovered.  The  court  instructed  the  jury  to  determine 
from  the  evidence  whether,  under  the  circumstances,  and  within 
the  terms  of  the  policy,  at  the  time  of  his  death,  the  insured 
was  engaged  temporarily  in  an  occupation  more  hazardous 
than  that  of  a  stationary  engineer,  but  it  did  not  submit  to 
the  jury  the  distinct  question  to  be  determined,  whether  the 
insured  was  fatally  injured  while  performing  an  act  peculiarly 
embraced  in  the  occupation  of  a  wood-chopper,  and  not  in 
that  of  a  stationary  engineer.  A  new  trial  was  granted  for 
the  reason  that,  while  it  might  be  difficult,  in  many  cases,  to 
say  what  acts  or  things  are  properly  incident  to  one  occupa- 
tion, which  are  not  so  to  any  other,  still  it  should  have  been 
submitted  to  the  jury  to  determine  from  the  evidence,  whether 
the  act  or  thing  which  the  insured  was  doing  or  performing 
at  the  time  of  his  death  more  properly  pertained  to  the  busi- 
ness of  a  wood-chopper,  and  did  not  belong  to  his  own  occu- 
pation.1 

A  certificate  of  membership  permitted  an  employment  dif- 
ferent from  that  designated  as  the  regular  or  usual  employ- 
ment of  the  assured,  in  his  application  and  certificate.  If 
injured  while  thus  engaged,  temporarily  or  otherwise,  in  an 
employment  classified  by  the  association  as  more  hazardous 
than  the  one  thus  stated  as  the  regular  employment  of  the 

1  Eggenberger  v.  Association,  41  Fed.  Rep.  172. 


790  ACCIDENT   INSURANCE. 

assured,  the  indemnity  to  be  paid,  in  case  of  death,  was  to  be 
at  the  rate  specified  for  the  occupation  in  which  he  was,  at 
the  time  of  the  injury,  actually  engaged.  In  his  application 
the  insured  had  been  asked  to  state  his  occupation;  "  if  more 
than  one,  state  them  all;  state  your  duties."  His  answer  was, 
"  spare  conductor,  through  freight."  The  society  classified 
the  employments  of  conductors  and  brakemen  at  different 
rates.  In  case  of  the  accidental  death  of  a  brakeman,  his  ben- 
eficiary was  entitled  to  $250,  while  the  beneficiary  of  a  con- 
ductor would  be  entitled  to  $2,000.  The  society  had  not  clas- 
sified the  occupation  of  a  "  spare  conductor,"  nor  determined 
what  indemnity  the  death  of  a  member,  while  engaged  in  that 
occupation,  should  entitle  the  beneficiary  to  receive.  The 
insured  was  killed  while  performing  the  duties  and  doing  the 
work  of  a  brakeman  on  a  mixed  through  train,  under  the  direc- 
tion of  another  person  as  conductor.  The  evidence  showed  that 
the  duties  of  a  spare  conductor  were  to  do  anything  and  go 
anywhere  on  any  train  at  any  time  and  in  any  capacity.  It 
was  contended  that  the  assured  was  legitimately  within  his 
duty  as  a  spare  conductor  when  killed,  although  actually  doing 
the  work  and  incurring  the  hazards  of  a  brakeman.  !No  general 
use  of  the  term  in  this  sense  was  shown,  nor  did  it  appear  that 
the  society  had  any  knowledge  that  it  was  so  used  upon  the 
road  where  the  insured  was  employed.  The  court  said :  "  The 
defendant  must  have  insured  him  according  to  the  meaning  of 
those  words  as  ordinarily  understood.  When  insured  as  a 
conductor  on  a  freight  train,  it  was  to  be  inferred  that  his 
duties  were  those  of  a  conductor.  The  adjective  "  spare,"  in 
its  ordinary  lexical  sense,  would  mean  "supernumerary,"  or 
"  held  in  reserve; "  "  to  be  used  in  an  emergency."  Worces- 
ter, Lex.  Webster,  Lex.  It  would  properly  distinguish  one 
occasionally  from  one  regularly  and  continuously  employed. 
The  word  gave  no  intimation  that  he  was  engaged,  or  desired  to 
be  insured,  in  the  performance  of  any  other  duties  than  those 
of  a  conductor.  When  words,  having  an  established  place  in 
the  language,  are  employed  and  apparently  used  in  no  technical 
or  peculiar  sense,  they  must  be  construed  according  to  their 
use  as  established.1  The  defendant  was  not  obliged  to  inquire 
what  sense  the  applicant  attributed  to  the  word  "  spare  "  in  the 

^diorne  v.  Insurance  Co.,  101  Mass.  551. 


ACCIDENT    INSURANCE.  791 

connection  in  which  he  used  it.  It  was  for  him  to  have  defined 
it,  if  that  sense  was  unusual.  Where  there  had  been  a  classi- 
fication of  the  various  employments  in  which  the  insured  was 
engaged,  the  defendant  could  not  suppose  that  he  sought  to 
be  insured  except  as  a  conductor,  or  that  by  this  word  he 
sought  to  embrace  the  otherwise  distinct  employments.  The 
insured  having  been  actually  engaged  as  brakeman  when  he 
was  killed,  the  beneficiary  is  therefore  entitled  to  recover  only 
the  sum  of  $250.'  The  constitution  of  a  corporation  organized 
to  afford  relief  to  employes  of  certain  railroad  companies  pro- 
vided relief  to  those  injured  "  by  accidents  while  in  the  dis- 
charge of  duty,  and  in  the  service  of  "  the  companies.  It  was 
held  that  an  employe  who  fifteen  minutes  after  having  quit 
work  for  the  day,  and  while  going  home  from  work,  in 
crossing  the  railroad  tracks,  was  killed  by  cars,  was  in  dis- 
charge of  his  duty,  and  in  the  service  of  the  company,  within 
the  meaning  of  the  constitution. a  A  person  who  is  insured 
against  accidents  while  in  the  discharge  of  certain  duties  must, 
if  the  policy  so  provides,  use  due  diligence  for  his  personal 
safety  while  in  the  discharge  of  those  duties.3 

§  412.  A  policy  contained  a  stipulation  that  it  should  not 
cover  accidents,  injuries  or  death  from  trying  to  enter  a  mov- 
ing steam  vehicle,  this  provision,  however,  not  being  applicable 
to  railway  employes.  The  insured,  a  banker,  was  killed  while 
attempting  to  get  on  a  moving  railway  train.  Another  provis- 
ion of  the  policy  limited  the  liability  of  the  company  to  a  less 
sum  than  that  named  in  the  policy,  if  the  insured  should  be 
injured  in  any  occupation  or  exposure  classed  as  more  hazard- 
ous than  that  specified  in  the  policy,  and  it  was  claimed  that  a 
recovery  should  be  allowed  for  such  smaller  sum.  The  court 
said  :  "The  terms  '  occupation  or  exposure  classed  by  this  com- 
pany as  more  hazardous,'  etc.,  refer,  as  we  understand,  to  dis- 
tinct, classified  occupations  or  employments,  such  as  railroad 
conductors,  railroad  brakemen,  railroad  engineers,  blacksmiths, 
carpenters,  etc.  To  bring  a  case  within  the  provision  limiting 
the  liability  of  the  company  to  a  less  amount  than  that  named 

1  Aklrich  v.  Accident  Association,  "Standard  Life  v.  Jones,  94  Ala. 
149  Mass.  457;  21  N.  East.  873.  434;  10  So.  Rep.  530. 

2  Kinney  v.  B.  &0.  Association,  35 
W.  Va.  385;  14  S.  E.  Rep.  8. 


792  ACCIDENT    INSUKANCE. 

in  the  policy  the  assured  must  be  within  one  of  such  classes; 
that  is,  engaged  in  one  of  the  more  hazardous  occupations. 
*  *  The  construction  which  the  appellants  would  have  us 
put  upon  this  provision  would  render  of  no  effect  the  more  plain 
condition  of  this  contract;  that  this  insurance  does  not  cover 
accident  nor  death  or  injury  resulting  *  from  *  entering, 
or  trying  to  enter,  or  leaving  a  moving  steam  vehicle."  l  A 
slave  whose  life  was  insured  was  a  laborer  in  a  tobacco  ware- 
house, and  the  policy  stipulated  that  he  was  not  to  be  employed 
in  a  more  hazardous  occupation.  He  was  subsequently 
drowned  in  a  river  by  falling  from  a  plank  while  walking  on  it 
from  a  steamboat  to  the  shore,  having  been  sent  by  his  master 
to  be  employed  on  a  sugar  plantation.  The  company  was  held 
liable,  and  the  court  based  its  opinion  upon  the  following 
ground :  "  Conceding  that  a  sugar  plantation  is  a  more  hazard- 
ous employment  than  tobacco  warehouses,  still,  the  slave  was 
not  lost  whilst  working  thereupon.  He  had  not  reached  the 
plantation.  It*  plaintiff  had  not  had  the  intention  of  employ- 
ing him  upon  a  plantation,  but  had  been  taking  the  slave 
at  the  time  of  his  death  to  work  in  a  tobacco  warehouse 
in  Virginia,  there  could  then  be  no  doubt  of  the  liability  of  the 
defendant.  The  intention  to  employ  him  on  a  sugar  planta- 
tion was  not  the  cause  of  his  death;  but  a  strong  wind  which 
caused  him  to  lose  his  balance  and  fall  in  the  water  in  passing 
on  a  plank  from  the  steamer  to  the  shore.  *  *  There  is 
nothing  in  the  policy  which  liberates  the  defendant  from  lia- 
bility on  account  of  the  intentions  that  plaintiff  might  enter- 
tain during  the  existence  of  the  policy  of  violating  its  terms." '' 
§  413.  An  accident  policy  was  indorsed  with  the  following 
stipulation :  "  Policy  holders  insured  under  the  preferred 
class  will  not  be  entitled  to  recover  for  injuries  received  in  any 
employment  or  by  any  exposure  either  more  hazardous  in  itself, 
or  classified  by  the  company  as  more  hazardous  than  the 
occupations  named  in  the  preferred  class."  In  construing 
this  indorsement  it  was  held  that  it  had  reference  to  hazard- 
ous employments,  and  not  to  individual  acts  incident  to  other 
occupations,   and  further  that,  being  an  indorsement  not  re- 

1  Miller  v.  Ins.  Co.,  39  Minn.  548;       2  Summers  v.  Ins.  Co.,  13  La.  Ann. 
40  N.  W.  Rep.  839.  504. 


ACCIDENT    INSURANCE. 


793 


ferred  to  in  the  body  of  the  policy,  it  was   no  part  of  the  con- 
tract.1 


1  Adm'rs  of  Stone  v.  Casualty  Co., 
34  N.  J.  Law  (5  Vroom)  371.  The 
court  said  :  "  The  injuries  excluded 
from  the  compensation  of  the  policy 
are  described  as  those  that  are  're- 
ceived in  any  employment,  or  by  any 
exposure,  either  more  hazardous  in 
itself,  or  classified  by  the  company 
as  more  hazardous.'  These  tern  is. 
literally  rendered,  require  that  the 
assured,  to  come  within  their  effect, 
must,  at  the  time  of  the  injury,  be  in 
an  employment  more  dangerous  than 
his  own.  The  language  has  respect 
to  employments  and  not  to  individ- 
ual acts  It  is  true  that  a  certain 
degree  of  ambiguity  is  introduced  by 
the  expression  '  other  exposure,'  but, 
looking  at  the  body  of  the  policy 
we  find  these  terms  used  in  the  sense 
of  the  risks  arising  from  a  business 
or  occupation.  By  adhering  to  the 
literal  signification  of  the  terms  em- 
ployed these  in  I orsements  prefixed  to 
the  several  classes  of  employments 
lose  all  force  as  independent  stipula- 
tions, and  serve  the  simple  purpose 
of  graduating  such  employments  for 
the  service  of  that  provision  of  the 
policy  which  prohibits  the  assured 
from  passing,  at  his  own  option, 
from  one  business  to  another.  Un- 
derstood, in  this  view,  they  are  prop- 
erly a  part  of  the  classification,  but 
if  they  are  to  be  received  as  a  »ntain- 
ing  new  terms  of  the  contract,  they 
are  entirely  out  of  place.  If  the 
company  intended  to  say  to  the  as- 
sured that  if  he  'liil  any  act  which 
did  not  stri<tly  belong  to  Ins  own  oc- 
cupation, but  was  embraced  more 
properly  in  some  other  business,  and 
if  thereby  any  harm  to  him  accident- 
ally  resulted,  thai  in  such  .vent  he 
could  claim  not bing under  his  policy 
it  was  easy  for  them  t  >  do  so  in  plain 
language.     Such  a  stipulation  would 


obviously  be  one  of  a  very  important 
character,  and  we  would  expect  to 
find  it  in  the  body  of  the  instrument. 
A  qualification  of  the  agreement  so 
restrictive  of  the  rights  of  the  party 
insured  ought  not  to  be  admitted  un- 
less the  terms  of  this  indorsement 
will  bear  no  other  rational  inter] no- 
tation. If  the  terms  used  are  imper- 
fect or  ambiguous,  it  is  the  fault  of 
the  defendants:  it  is  their  contract, 
and  the  construction  of  it  must  be 
strongly  against  them,  contra  prefer. 
entes.  Nor  do  I  think  the  liberal  in- 
terpretation of  this  clause,  which 
the  defense  contends  for,  a  practical 
one.  It  would  be  difficult  to  put  it 
in  practice;  for  who  can  say,  in  many 
cases,  what  acts  are  properly  inci- 
dent to  one  occupation,  and  which 
are  not  so  to  any  other?  The  subdi- 
visions of  employments  are  so  nu- 
merous and  minute,  that  in  actual  life 
it  is  impossible  to  separate  them  by 
any  visible  and  exact  line:  for  in- 
stance, in  the  first  of  these  classifica- 
tions the  shop-keej>er  is  placed,  and 
in  the  second  the  laborer.  The  em- 
ployments of  these  are  distinct:  but 
with  respect  to  particular  acts  it 
would  be  extremely  difficult,  if  not 
impossible,  to  classify  them  into  those 

winch  are  common  to  both  occupa- 
tions, and  into  those  which  are  pecul- 
iar to  each.       It  doe-.    Hot  seem    to    IDC 

proper  to  bring  into  this  agreement 
this  confusion  and  uncertainty  by 
construction.  It  certainly  is  not  nec- 
essary  f or  tin  reasonable  protection 
of  the  company,  lor  there  are  other 
restrictions  in  this  instrument  which 
are.  apparently,  sufficient  to  debar  a 
party  insured  from  doing  acts  apper- 
taining to  other  occupations,  which 
are  of  a  particularly  hazardous  na- 
ture. 1  refer  to  the  clauses  refer- 
ring to   undue  exposure.     Even   the 


794  ACCIDENT    INSURANCE. 

A  by-law  of  a  society  provided :  "  Any  member,  who  shall 
change  his  occupation,  to  any  other  more  hazardous  than  the 
one  in  which  he  was  classified  when  insured,  shall  immediately 
notify  the  secretary  of  such  change;  and  any  member,  receiving 
an  injury  while  engaged  temporarily  or  otherwise,  in  another 
occupation  more  hazardous  than  the  one  in  which  he  was  en- 
gaged when  insured,  he  or  his  benficiary,  shall  be  entitled  to 
receive  only  such  indemnity  as  provided  for  in  the  class  or  occu- 
pation in  which  he  is  engaged  at  the  time  of  the  injury."  The 
certificate  issued  to  a  member  contained  this  clause :  "  It  is 
expressly  stipulated  and  agreed.that  in  the  event  of  the  mem- 
ber being  either  fatally  injured,  or  otherwise  disabled  while 
engaged  temporarily,  or  otherwise,  in  any  act  or  occupation 
classed  as  more  hazardous  than  the  one  in  which  he  is  accepted, 
according  to  the  classification  given  by  the  rates  and  by-laws 
of  this  association,  then  an  amount  shall  be  paid  equal  to  the 
rate  of  the  occupation  in  which  the  member  is  engaged  when 
receiving  the  injury."  It  was  provided  in  the  classification  of 
risks  that,  in  the  event  of  the  death  by  accident  of  a  member 
in  division  A,  a  sum  not  exceeding  $5,000  should  be  paid  and 
that,  in  the  event  of  such  death  of  a  member  of  division  E, 
which  was  designated  therein  as  "  hazardous  "  a  sum  not  ex- 
case  put  of  an  attorney  driving  a  herein  contained  or  referred  to,  and 
steam  engine  would  probably  come  upon  the  express  agreement  that  the 
within  this  prohibition.  But  there  statements  and  declarations  of  the 
is  still  another,  and,  as  it  seems  to  insured  in  his  application  for  this  in- 
me,  a  decided  objection  against  the  surance  are  warranted  to  be  true  in 
admission  of  this  indorsement,  as  all  respects,  and  that  said  application, 
constituting  in  itself  a  substantive  together  with  the  company's  classifi- 
agreement.  That  objection  is  this:  cation  of  hazards  indorsed  hereon 
That  considered  in  this  light  it  can  are  referred  to,  and  made  a  part  of 
not  be  received  as  any  part  of  the  this  contract.'  This  specification  of 
contract  between  these  parties.  As  I  the  parts  going  to  make  up  the  agree- 
have  stated,  this  clause  is  a  prefix  to  ment  is  clear,  and  it  does  not  embrace 
the  classification  on  the  back  of  this  prefix  in  question,  if  such  prefix 
the  policy,  and  such  prefix  is  not  is  to  be  taken  as  a  modification  of  the 
referred  to  in  the  body  of  the  in"  body  of  the  policy  in  a  most  material 
strument.  The  policy  itself  is  very  respect.  On  these  various  grounds  I 
explicit  as  to  what  shall  be  comprised  incline  to  the  view  that  the  indorse- 
in  the  contract.  Its  language  is,  that  ment  in  question  does  not  consti- 
this  policy  'is  issued  and  accepted  tutea  substantive  stipulation,  but  is 
subject  to  all  the  provisions,  con-  merely  explanatory  of  the  stipula- 
ditions,  limitations    and    exceptions    tions  to  the  extent  already  indicated." 


ACCIDENT   INSUKANCE.  795 

ceeding  8^,000  should  be  paid.     Merchants    were   placed  in 
division  A,  and  hunters  in  division  E. 

The  facts  and  the  decision  of  the  court  in  a  case  arising-  un- 
der this  contract  can  not  be  better  stated  than  in  the  language 
of  the  opinion.  This  was  as  follows  :  "  The  principal  con- 
tention of  appellant  is  that  the  deceased  was  killed  while  en- 
gaged temporarily  in  an  act  or  occupation  classed  as  more 
hazardous  than  the  one  in  which  he  was  accepted,  and  that 
appellee  is  therefore  entitled  to  recover  only  the  amount  pro- 
vided for  such  hazardous  risk  and  occupation.  The  contention 
of  appellee  is  that  there  was  no  change  of  occupation,  within 
the  meaning  of  the  by-laws  and  certificate  of  insurance.  The 
deceased  was  a  hardware  merchant.  He  did  not  follow  the 
occupation  of  a  hunter  for  hire  or  profit.  He  was  killed  while 
engaged  in  the  act  of  hunting  as  a  recreation,  and  it  does  not 
appear  that  he  had  hunted  with  a  gun  on  any  occasion  since 
the  issuance  of  the  policy  other  than  that  upon  which  the  acci- 
dent occurred.  In  our  examination  of  the  provisions  of  the 
by-laws  and  contract  of  insurance,  we  will  first  ascertain  the 
proper  construction  to  be  placed  upon  the  former.  The  lan- 
iruau'e,  as  we  have  heretofore  seen,  is :  'Anv  member  receiving 
an  injury  while  engaged  temporarily,  or  otherwise,  in  an  occu- 
pation more  hazardous  than  the  one  in  which  he  was  engaged 
wlx 'ii  insured,'  etc.  '  Occupation'  is  defined  by  lexicographers 
to  mean  '  that  which  occupies  or  engages  the  time  or  atten- 
tion; the  principal  business  of  one's  life;  vocation;  employ- 
ment;  calling;  trade.'  The  classification  of  hazards  in  the 
by-laws  is  made  upon  the  basis  of  occupations.  Merchants, 
ami  those  following  other  like  vocations,  are  placed  in  division 
A;  grain-measurers  and  others  in  division  I>;  paper-hangers 
and  others  in  division  ( ';  teamsters  and  others  in  division  D; 
and  boatmen  and  others  in  division  E.  The  by-laws  in  ques- 
tion must  receive  a  reasonable  construction.  It  would  be  un- 
reasonable and  absurd  to  hold  that  the  merchant,  who  at  one 
time  measured  ;i  few  bushels  of  grain,  at  another  hung  a  lew- 
rolls  of  wall-paper  upon  his  own  premises,  at  another  drove  a 
team  of  horses  in  ;i  carriage  or  wagon,  and  at  still  another 
rowed  a  skiff  for  exercise  or  recreation,  became,  within  the 
true  intent  and  meaning  of  these  by-laws,  at  these  several 
times,  a  grain  measurer,  a  paper-hanger,   a  teamster,  and  a 


796  ACCIDENT    INSURANCE. 

boatman,  respectively.  The  word  '  occupation,'  as  found  in 
these  by-laws,  must  be  held  to  have  reference  to  the  vocation, 
profession,  trade,  or  calling,  which  the  assured  is  engaged  in 
for  hire,  or  for  profit,  and  not  as  precluding  him  from  the 
performance  of  acts  and  duties  which  are  simply  incidents 
connected  with  the  daily  life  of  men  in  any  or  all  occupations; 
or  from  engaging  in  mere  acts  of  exercise,  diversion,  or  recre- 
ation. This  view  is  not  subversive  to  the  word  '  temporarily,' 
found  in  said  section,  for  there  would  be  full  opportunity  for 
giving  force  and  effect  to  it,  in  the  event  that  a  professional 
man,  merchant,  or  person  in  some  other  calling,  should  tem- 
porarily abandon  such  vocation,  and  for  purposes  of  profit, 
or  as  a  means  of  gaining  a  subsistence,  temporarily  employ 
himself  in  some  more  hazardous  occupation.  This  construc- 
tion of  these  by-laws  seems  to  be  sustained  by  the  authorities.1 
*  *  It  is  urged,  however,  that  the  contract  of  insurance 
contains  the  words  '  in  any  act  or  occupation,'  instead  of  the 
mere  words,  '  in  another  occupation,'  found  in  the  by-law,  and 
that  the  words,  '  while  engaged  temporarily,  or  otherwise,  in 
an  act,'  can  not  be  ignored;  but  that  they  have  a  definite  and 
clear  meaning,  and  must  be  given  legal  force  and  effect.  It  is 
to  be  noted  that  the  words  used  in  the  contract  are  words  se- 
lected and  used  by  the  corporation  itself,  and  are  therefore  to 
be  interpreted  most  strongly  against  it;  or  that,  at  all  events, 
they  are  to  be  construed  according  to  their  common  and  lit- 
eral meaning  in  favor  of  the  insured.  The  provision  of  the 
policy,  upon  which  is  based  the  claim  that  the  demand  of 
appellee  is  reduced  from  one  under  division  A  to  one  under 
division  E,  is  not  simply  that  if  deceased  was  fatally  injured 
'  while  engaged  temporarily,  or  otherwise,  in  any  act  or  occu- 
pation more  hazardous  than  the  one  in  which  he  was  accepted,' 
but  contains  the  further  requirement  that  the  '  act  or  occupa- 
tion '  that  will  be  effective  to  work  such  reduction  must  be  one 
that  is  '  classed  as  more  hazardous,  *  *  according  to  the 
classification  given  by  the  rates  and  by-laws  of  the  associa- 
tion.' These  words  last  quoted  are  words  of  limitation,  per- 
taining to,  and  qualifying,  the  terms, '  any  act,'  and  '  occupa- 

1  Citing  N.  A.  Life  v.  Burroughs,    v.  Ins.  Co.,  39  Minn.  548;  40  N.  W. 
69  Pa.  St.  43;  Stone's  Adm'rs  v.  Cas-    Rep.  839. 
ualty  Co.,  34  N.  J.  Law  375;  Miller 


ACCIDENT    INSURANCE.  797 

tion,'  as  used  in  the  contract.  We  have  already  seen  that  the 
classification  of  hazards  made  in  the  by-laws  is  predicated  only 
upon  occupations.  There  is  not  in  the  by-laws,  or  in  the 
record  any  classification  of  hazards  in  respect  to  acts.  In 
other  words,  there  is  no  act  which  is  classified  as  more  or  less 
hazardous  than  another,  and  no  act  which  is  classed  as  more 
hazardous  than  the  occupation  designated  in  the  certificate  of 
insurance  issued  to  the  deceased.  The  case,  then,  does  not 
stand  otherwise  than  it  would  if  the  word  '  act '  were  not 
found  in  the  contract.  The  courts  below  properly  held  that 
the  claim  of  appellee  was  under  division  A,  and  was  for 
$5,000."  L 

§  414.  "Where  an  applicant  for  insurance  against  accidents 
makes  a  true  and  full  statement  of  his  occupation  to  the  agent 
of  the  company,  the  company  is  bound,  after  loss,  by  the 
classification  which  the  agent  gives  him;  and  if  he  is  wrongly 
classified,  according  to  the  rules  of  the  company,  the  fact 
that  he  certifies  to  his  understanding  of  its  classification  of 
risks,  and  that  he  belongs  to  the  class  given,  is  immaterial, 
when  in  fact  his  only  means  of  understanding  the  classifica- 
tion is  through  the  representations  of  the  agent.2  "Where  an 
accident  company,  with  knowledge  that  the  insured  was  ordi- 
narily a  jobber  and  contractor,  though  sometimes  a  farm-hand, 
classifies  him  in  its  policy  as  a  jobber  and  contractor,  it  can 
not,  after  he  has  been  injured  while  working  as  a  farm  hand, 
reduce  his  indemnity  to  the  grade  in  which  farm  hands  are 
classified.  A  company  can  not  after  the  insured  has  been  in- 
jured, classify  the  occupation  in  which  he  was  injured  in  a 
grade  other  than  that  specified  in  the  policy,  and  thus  reduce 
his  indemnity  to  a  lower  rate  of  payment."  Where  one  is 
classified,  for  the  purpose  of  discriminating  employments  more 
or  less  hazardous  and  fixing  insurance  rates  in  proportion  to 
the  hazard,  as  a  "capitalist  by  occupation,"  he  is  not  classed 
as  a  capitalist,  but  is  insured  in  a  preferred  class  as  a  capitalist 

1  Union  Mutual  v.  Frohard,  134  111.  Co.,  94  U.  S.  621;  Ins.  Co.  v.  Mahone, 

228;  25  N.  East.  Rep.  642.  21  Wall.  L52;  N.  Y.  Ace.  Co.  v.  Clay- 

8  Pacific    Mutual    v.    Bnowden,  58  ton,  59  Fed.  Rep.  569. 
Fed.  Rep.  342:  see  2  Amor.  Lead.  ('as.        3  Bushaw  v.  Accident  Co.,  8  N.  Y. 

(5th  Ed.)  917;  Ins.  Co.   v.  Wilkinson,  Supp.  423. 
13  Wall.  222,  235,  236;  Eamos  v.  Ins. 


798  ACCIDENT   INSUKANCE. 

by  occupation.1  Where  a  member  continues  to  pay  bis  assess- 
ments for  more  than  three  years  after  receiving  notice  that 
the  classification  of  his  membership  has  been  changed,  the 
contract  can  not  be  rescinded  on  account  of  the  change,  but  it 
will  be  held  that  he  assented  to  it.2 

§  415.  Notice  of  injury  or  death. — Accident  policies  usu- 
ally provide  that  notice  of  an  injury  shall  be  given  to  the  com- 
pany or  to  its  local  agent  within  a  certain  specified  time,  and 
such  notice  is  almost  always  required  as  a  condition  precedent 
to  the  right  to  demand  pa}rment.  When  the  time  is  specified 
within  which  the  notice  must  be  given  to  hold  the  company 
on  its  contract,  it  must  be  given  within  that  time,  for  the  in- 
surers have  a  right  to  impose  such  a  condition,  in  order  to 
investigate  at  an  early  moment  the  nature  of  the  injury  and 
the  circumstances  under  which  it  occurred,  in  order  to  judge 
of  the  validity  of  the  claim.  Where  such  a  stipulation  has 
neither  been  complied  with  nor  waived,  the  insured  can  not 
recover  on  the.  policy.3  A  provision  in  a  policy  of  insurance 
prescribing  a  limit  of  time  within  which  notice  of  death  or 
injury  is  to  be  given,  will  not  be  construed  as  a  cause  of  forfeit- 
ure where  it  is  not  expressly  so  stipulated  in  the  contract.  A 
policy  providing  that  notice  of  injury  shall  be  given  within 
twenty-four  hours  after  it  occurs,  but  providing  no  penalty  or 
forfeiture  for  failure  to  give  such  notice,  maybe  recovered  on, 
if  notice  is  given  within  a  reasonable  time  after  the  injury 
occurs."  But,  in  such  case,  notice  must  be  given  within  a 
reasonable  time,  though  provisions  for  forfeiture  are  not  em- 
bodied in  the  policy.5  Unless  it  is  expressly  so  stipulated  in 
the  contract,  the  notice  need  not  be  in  writing; 6  nor  need  any 
particular  form  of  notice  be  used,  if  the  fact  to  be  made  known 
is  clearly  set  forth.7  Where  the  insured  is  the  only  person 
interested,  he  is  the  proper  one  to  give  the  notice,  but  he  may 

'  Bean  v.  Ins.  Co.,   94  Cal.  581;  29  s  Woodfin  v.  Ins.    Co.,  41   N.  C.  (6 

Pac.  Rep.  1113.  Jones,  Law,)  558. 

2  Margut  v.  United  Brethren,  148  fiKillips  v.  Ins.  Co.,  28  Wis.  472. 
Pa.  St.  185;  23  Atl.  Rep.  896.  i  Rix  v.  ins.  Co.,  20  N.  H.  198;  Ger- 

3  Davis  v.  Davis,  49  Me.  282;  Hey-  mania  Ins.  Co.  v.  Boykin,  79  U.  S. 
wood  v.  Association,  85  Me.  289;  27  (jo  Wall.)  433. 

Atl.  Rep.  154. 

4  Coventry  Mutual  v.   Evans,    102 
Pa.  St.  281. 


ACCIDENT    INSURANCE.  799 

give  it  through  his  agent;  and  where  a  third  person  gives  a 
written  notice  for  him,  it  is  not  necessary  that  his  agency  shall 
appear  on  its  face.1  The  contract  may  require  the  notice  to 
be  given  to  certain  officers  or  agents  of  the  company.  Such 
requirements  must  be  strictly  complied  with,  and  the  notice 
given  to  the  person  designated.2  Where  notice  of  loss  is  re- 
quired to  be  given  to  the  secretary  of  the  company,  in  writing^ 
a  written  notice  to  him  from  the  local  agent,  upon  informa- 
tion conveyed  by  the  insured,  is  sufficient.3  But  where  the 
condition  requires  that  the  notice  shall  be  given  in  writing  to 
the  secretary,  notice  by  parol  to  an  agent  will  be  of  no  effect.4 
Where  the  policy  does  not  in  terms  require  a  statement  of  the 
date  of  an  accidental  injury,  the  date  in  the  notice  and  proof 
is  not  so  material  that  a  misstatement  of  it,  without  any  im- 
proper motive,  will  prevent  the  plaintiff  from  maintaining  his 
action,  if  the  company  is  in  no  way  misled  or  prejudiced  by  it.5 
§  416.  In  giving  a  notice  there  must  be  no  unnecessary  de- 
lay, nothing  which  the  law  calls  laches.  The  terms  "  forth- 
with," "immediately,"  and  "as  soon  as  possible,"  used  in  con- 
nection with  the  giving  of  notice  under  a  policy  of  insurance, 
are  not  to  be  taken  literally,  but  mean  with  due  diligence,  or 
without  unnecessary  procrastination  or  delay,  under  all  the 
circumstances  of  the  case.  In  ordinar}7  cases,  when  such 
terms  are  used,  whether  the  insured  has  been  duly  diligent  in 
giving  notice  of  the  injury  received  by  him,  or  whether  his 
legal  representatives,  family,  heirs,  or  other  proper  persons 
have  been  guilty  of  unnecessary  delay  in  giving  notice  of  his 
accidental  death,  are,  under  all  the  circumstances  of  such  c;iscs. 
questions  of  fact  to  be  determined  by  the  jury  under  proper 
instructions  from  the  court."     Where  notice  is  required  to  be 

1  Stimpson  v.  Ins.  Co.,  47  Me.  349:  "Patrick  v.  Ins.  Co..  43  N.  II.  621. 

West  Branch  Ins.  Co.  v.  Helfenstein,  6  Young    v.  Travelers'   Ins.  Co..  so 

40  Pa.  St.  289;  Sims  v.  Ins.  Co.,  47  Me.  244;  13  Atl.  Rep.  896;  American 

Mo.  51.  Ins.   Co.  v.  Norment,  91  Tenn.  1;  18 

8 Patrick  v.  Ins.  Co.,  43  N.  H.  621;  S.  W.  Rep.  895. 

Inland  Co.  v.  Stauffer,  88  Pa.  St.  397.  fi  Edwards  v.  Ins.  Co.,  3  Gill   (Md.) 

West  Branch  Ins.  Co.  v.   Helfen-  176:  Phillips  v.  Ins.  Co.,    11   Mo.  320; 

stein,  40  Pa.  St.  289;   Germania  Ins.  Peoria  Ins.  Co.  v.    Lewis.  18  II!.  558; 

Co.  v.   Curran,   8  Kan.  9;  Killips  v.  O'Brien    v.    Ins.    Co..    76    N.    Y.  459; 

Ins.  Co.,  28  Wis.  472;   see   American  Continental    Ins.    Co.    v.    Lippold,  3 

Ins.  Co.  v.  Norment,  91  Tenn.   1;  18  Neb.  391:  Providence  Life  v.  Martin. 

S.  W.  Rep.  395.  32  Md.  310;  Lyon   v.  Assurance   Co., 


I 


800  ACCIDENT    INSURANCE. 

given  "  forthwith,"  a  delay  of  thirty-eight  days,1  or  even  of 
eleven  days,2  is  unreasonable.  Where  a  by-law  of  the  company 
required  "  immediate "  notice  of  a  loss,  and  notice  was  not 
given  until  eleven  days  after  it  occurred,  and  no  sufficient  ex- 
cuse was  shown  for  the  delay,  it  was  held  to  be  too  late.3  An 
accident  polic}T  required  "  immediate  "  notice  of  an  injury  to 
be  given,  and  it  was  held  that  a  notice  given  six  days  after  the 
injury,  which  happened  in  the  city  where  the  policy  was  issued, 
and  where  the  company  had  a  resident  agent,  was  too  late, 
where  no  excuse  was  shown  for  the  delay.4  A  statute 6  pro- 
hibited foreign  insurance  companies  doing  business  in  the  state 
from  inserting  in  their  policies  of  insurance  a  condition  re- 
quiring the  insured  to  give  notice  of  loss  forthwith,  or  within 
a  period  of  less  than  five  days.  It  was  held 8  that  where  such  a 
condition  was  inserted  in  a  policy  issued  by  a  foreign  insurance 
company,  it  was  void,  but  that,  nevertheless,  under  a  policy 
containing  such  a  condition,  the  insured  was  required  to  give 
notice  within  a  reasonable  time,  and  that  an  unexplained  de- 
lay of  fifty  days  in  giving  notice  of  loss  was  unreasonable.7 
Where  a  loss  occurred  on  the  15th  day  of  a  month,  and  the  in- 
sured knew  of  it  on  the  ISth  and  sent  notice  by  mail  on  the 
23d,  it  was  held  to  be  a  sufficient  compliance  with  a  condition  of 
the  policy,  requiring  notice  to  be  given  forthwith; 9  and  where 
the  notice  is  received  by  the  company  five  days  after  the  loss, 

46  Iowa  631;  Palmer  v.  Ins.  Co.,  44  3  Trask  v.  Ins.  Co.,  29  Pa.  St.  198; 

Wis.  201;  St.  Louis  Ins.  Co.  v.  Kyle,  see  Smith  v.  Ins.  Co.,  1  Allen  297. 

11  Mo.  278;  Pennypacker  v.  Ins.  Co.,  4  Railway  Passenger  Assurance  Co. 
80  Iowa  56;  45  N.  W.  Rep.  408.  But  v.  Burwell,  44  Ind.  460;  3  Ins.  L.  J. 
where  there  is  no   dispute  as   to  the  281. 

facts  concerning  the  giving  of  the  6  Section    3770,  Rev.    Stat.    1881  of 

notice,  and  the  diligence  used  in  that  Indiana. 

regard,  the  question  is  one  of  law  for  6  Insurance  Co.   v.    Brim,  111  Ind. 

the  court  to  decide.     Kimball  v.  Ins.  281;  12  N.  East.  Rep.  315. 

Co.,  8  Gray  (Mass.)   33;    Bennett  v.  '  See  Pickels  v.  Ins.    Co.,   119  Ind., 

Ins.  Co.,  67  N.  Y.  274;  Pickels  v.  Ins.  291;  21  N.  East.  Rep.   898;    Baker  v. 

Co.,  119  Ind.  291;    21   N.    East.  Rep.  Ins.  Co.,  124  Ind.   490;    24  N.  East. 

898;  Ins.  Co.  v.    Prim,    111  Ind.  281;  Rep.   1041;    Ins.   Co.   v.    Lindsey,  26 

12  N.  East.  Rep.  315;  see  American  Oh.  St.  348;  Patrick  v.  Ins.  Co.,  43  N. 
Ins.  Co.  v.  Norment,  91  Tenn.  1;  18  H.  621;  Mellen  v.  Ins.  Co.,  17  N.  Y. 
S.  W.  Rep.  395;    McFarland  v.  U.  S.  609. 

Association  (Mo.),  27  S.  W.  Rep.  436.       8  N.  Y.  Ins.  Co.  v.  Insurance  Co.,  20 

1  Inman  v.  Ins.  Co.,  12  Wend.  452.    Barb.  468. 

2  Whitehurst  v.  Ins.  Co.,  42  N.  C. 
(7  Jones)  433. 


ACCIDENT    INSURANCE.  801 

such  a  condition  is  complied  with.1  In  one  case  fifteen  days 
was  held  to  be  a  reasonable  time  within  which  to  give  notice,2 
and  in  another  ten  days  was  held  to  be  a  reasonable  time.3 
<  §  417.  The  object  of  notice  is  to  enable  the  insurance  com- 
pany, within  a  reasonable  time  after  the  death  or  injury  of  the 
insured,  to  inquire  into  all  the  facts  and  circumstances  while 
they  are  fresh  in  the  memory  of  witnesses,  in  order  to  deter- 
mine whether  it  is  liable,  or  not,  upon  its  contract.  The  con- 
dition that  notice  shall  be  given  operates  upon  the  contract  of 
insurance  only  subsequent  to  the  fact  of  the  loss,  and  it  must, 
therefore,  receive  a  liberal  and  reasonable  construction  in  favor 
of  the  beneficiary  under  the  contract.  A  contract  contained  the 
following  provision:  "Notice  of  any  accidental  injury,  for 
which  claim  is  to  be  made  under  this  certificate,  shall  be  given 
in  writing  *  *  *  with  full  particulars  of  the  accident  and 
injury,  and  failure  to  give  such  written  notice  within  ten  days 
from  the  date  of  either  injury  or  death  shall  invalidate  any 
and  all  claims  under  this  certificate."  On  August  22,  a  large 
office  building  in  which  insured  had  his  office  fell,  crushing 
many  to  death.  He  was  killed,  but  the  fact  was  not  known  until 
the  25th,  when  his  body  was  found  in  the  ruins.  Notice  of  his 
death  was  given  on  September  2,  which  was  within  ten  days 
from  the  discovery  of  the  body,  but  not  within  ten  days  from 
the  day  of  the  accident,  when  his  death  must  have  occurred. 
The  court  said  :  "  The  parties  having  contracted  that  the  no- 
tice of  death  should  be  accompanied  by  full  particulars  of  the 
manner  in  which  it  occurred,  and  the  attendant  circumstances, 
they  evidently  intended  that  it  should  be  given  only  when  the 
fact  and  manner  of  death  became  known  to  the  parties  who 
were  required  to  act.  The  fair  and  reasonable  construction 
of  this  condition,  therefore,  is  that  the  ten  days  within  which 
the  notice  is  to  be  given  did  not  begin  to  run  from  the  date  of 
the  accident  or  the  disappearance  of  the  insured,  but  from  the 
time  when  the  body  was  found,  and  the  important  fact  of  death, 
with  the  circumstances  and  particulars  under  which  it  occurred, 
ascertained.     *     *     To  hold  that  the  plaintiff  was  bound  to 

1  West  Branch  Ins.  Co.  v.  Helfen-  Ind.  App.  361 ;  28  N.  East.  Rep.  868. 
stein.  40  Pa.  St.  289;  Schenck  v.  Ins.  « McNally  v.  Ins.  Co.,  137  N.  Y. 
Co.,  24  N.  J.  (4  Zabr.)  447.  389;  33  N.  East.  Rep.  475. 

s  Germania    Ins.  Co.  v.  Deckard,  3 

51 


802  ACCIDENT   INSURANCE. 

give  notice  of  the  death  of  her  husband,  with  full  particulars, 
before  she  had  any  knowledge  of  the  facts,  would  be  to  require 
her,  by  a  technical  and  literal  construction,  to  do  an  impossible 
thing,  which  was  not  within  the  intention  of  the  parties  when 
the  contract  was  made."  ' 

There  was  a  clause  in  a  policy  requiring  that  "  in  the  event 
of  injury,  within  the  meaning  of  this  polic}?",  occurring  to  the 
assured,  he,  or  in  case  of  his  death,  his  legal  representatives, 
shall  as  soon  thereafter  as  possible,  give  notice  thereof  to  the 
company  at  their  office  in  C.  or  to  the  agent  writing  the 
policy,  together  with  the  full  name,  occupation  and  address  of 
the  assured,  with  full  particulars  of  the  accident  or  injury." 
The  insured  died  from  the  effect  of  a  gun-shot  wound,  at  a 
place  so  near  C,  where  the  office  of  the  company  was,  that 
notice  of  his  death  might  have  been  given  to  the  company  in 
one  day  thereafter.  The  beneficiary  lived  at  the  time  at  the 
place  where  the  insured  died,  but  did  not  give  notice  to  the 
company  until  eight  or  ten  days  after  his  death.  The  policy 
was  in  the  trunk  of  the  insured  at  C.  when  he  died,  and  had 
never  been  in  the  possession  of  or  been  seen  by  the  beneficiary 
before  the  end  of  said  eight  or  ten  days,  when  he  at  once 
notified  the  company  of  the  death  of  the  insured.  It  was 
held  that  the  clause  above  quoted  must  receive  a  reasonable 
construction;  and,  under  the  circumstances  of  the  case,  the 
notice  given  was  sufficient.*  A  condition  in  a  policy  provided 
that  "in  the  event  of  accidental  injuries  for  which  claim  may 
be  made,  immediate  notice  shall  be  given  in  writing  to  the 
company  at  Hartford,  stating  full  name,  etc.,  with  full  par- 
ticulars of  the  accident  and  injury,  of  which  direct  and  affirm- 
ative proof  shall  be  furnished  within  seven  months  from  the 
happening  of  the  accident.  Failure  to  give  such  immediate 
written  notice,  or  to  furnish  such  direct  and  affirmative  proof, 
within  the  time  aforesaid,  shall  invalidate  all  claims  under  this 
contract."  It  was  held  that  the  condition  did  not  require  the 
proof  of  the  injury  to  be  sent  to  Hartford,  and  on  this  sub- 
ject the  court  said  :  "  If  the  company  intended  to  require  the 
proofs  to  be  sent  to  Hartford,  Connecticut,  it  could  have  so 

1  Trippe  v.  Society,  140  N.  Y.  23;  35  2  Provident  Life  v.  Baum,  29  Ind. 
N.  East.  Rep.  316;.  Insurance  Co.  v.  236;  see  Germania  Ins.  Co.  v.  Boy- 
Boykin,  12  Wall.  433.  kin,  79  U.  S.  (12  Wall.)  433. 


ACCIDENT    INSURANCE.  803 

provided  in  express  terms.  The  policy  requires  the  notice  to 
be  given  to  the  company  at  that  place,  but  it  does  not  require 
the  proofs  to  be  furnished  the  company  at  that  or  any  other 
particular  place.  This  is  reasonable;  for  the  officers  or  agents 
of  the  company  nearest  the  place  of  the  accident  could 
examine  the  case  and  ascertain  the  facts  with  much  more 
facility  than  the  officers  at  the  main  office  in  a  distant  state; 
and  if  they  were  so  furnished  they  would  probably  have  to  be 
sent  back  for  investigation  to  those  representing  the  company 
nearer  at  hand." '  When  notice  and  sufficient  proof  of  the 
injury  are  required  to  be  given,  sufficient  preliminary  proo'f 
must  be  made  to  make  out  a  prima  facie  case  of  injury  result- 
ing from  accident.2 

§  418.  Where  a  policy  provides  that  "in  the  event  of  any 
accident,  whether  fatal  or  not,  occurring  to  the  insured  within 
the  intent  and  meaning  of  this  policy,  notice  thereof  in  writ- 
ing must  be  delivered  to  the  company,  at  their  chief  office, 
within  seven  days  after  the  occurrence  of  the  accident,"  this 
provision  is  not  discharged  by  reason  of  the  fact  that,  owing 
to  the  act  of  God,  the  accident  was  of  so  sudden  and  fatal  a 
character  that  it  was  impossible  to  have  given  the  required 
notice  within  seven  days  after  the  accident;  inasmuch  as  the 
terms  of  the  policy  are  such  as  to  negative  any  presumption 
bringing  it  within  the  class  of  cases  in  which  it  has  been  held 
that,  in  the  nature  and  import  of  the  contract  itself,  there  was 
that  which  involved  the  implied  condition  that  the  destruction 
of  the  person  or  thing  with  which  the  contract  dealt  should 
absolve  a  party  from  its  performance.  Such  a  contract  as  the 
one  quoted  requires  that  notice  shall  be  given  by  some  one,  and 
the  instantaneous  death  of  the  insured  does  not  render  it  im- 
possible to  do  what  the  condition  requires,  since  it  may  be 
done  by  a  survivor.  It'  the  insured  does  not  take  the  neces- 
sary means  of  enabling  some  one  who  is  likely  to  survive  him 
to  give  the  necessary  notice,  the  fault  is  his,  not  that  of  the 
company.  If  he  does  not  apprise  the  beneficiary  of  the  exist- 
ence of  the  policy,  and  of  t he  strict  condition  contained  in  it, 
the  misfortune  is  upon  the  beneficiary.  The  instantaneous 
death  of  the  insured   will  only  occasion  the  omission  to  give 

1  Scheidercr  v.  Ins.  Co.,  58  Wis.  13.       2N.  Am.  Life  v.  Burroughs,  69  Pa. 

St.  43. 


804  ACCIDENT   INSURANCE. 

the  necessary  notice,  when  he  neglects  to  provide  for  that 
contingency;  and  the  fact  that,  during  the  time  limited  for  the 
giving  of  notice,  no  person  had  knowledge  of  the  existence  of 
the  policy,  does  not  excuse  the  want  of  timely  notice.  Such 
a  condition  as  the  one  above  quoted  is  not  unreasonable*1 

§  419.  Waiver  of  notice. — Provisions  of  a  policy  requiring 
the  giving  of  notice  of  injury  or  death  are  for  the  benefit  of  the 
company  and  may  be  waived  by  it.  Such  a  waiver  may  be  made 
in  express  terms,  or  may  be  inferred  from  any  acts  of  an  offi- 
cer or -general  agent  of  the  company,  which  would  lead  a  pru- 
dent man  to  think  that  the  giving  of  the  notice  would  not  be 
insisted  upon.  Mere  knowledge  on  the  part  of  an  agent  that 
an  injury  has  happened  to  the  insured,  will  not  relieve  the  latter 
from  the  duty  of  giving  the  notice  as  required  by  the  contract.2 
If  the  notice  given  on  the  part  of  the  insured  is  defective  or 
erroneous,  and  the  company  retains  it  without  objection  beyond 
a  reasonable  time  to  examine  and  return  it,  or  if  the  company, 
after  notice  has  been  given,  puts  its  refusal  to  pay  on  some  other 
ground,  this  is  a  waiver  of  all  objections  to  the  notice.  The 
defect  being  formal  and  capable  of  correction  and  amendment, 
must  be  pointed  out  to  the  person  offering  the  notice,  in  order 
that  he  may  have  an  opportunity  to  supply  the  needed  require- 
ments. But  a  failure  to  give  the  notice  within  the  time  stip- 
ulated in  the  contract,  is  an  entirely  different  matter  from  a 
failure  to  give  a  notice  in  due  form.  The  company  is  not 
required  to  notify  the  insured  or  the  beneficiary  of  a  policy 
either  that  notice  of  an  injury  or  of  death  must  be  given 
within  a  certain  time,  or  that  no  notice  will  be  received  be- 
cause the  time  for  the  giving  of  it  under  the  contract  has 
expired.  The  silence  of  the  insurance  company  upon  a  defect 
in  the  form  of  the  notice  might  be  very  injurious  to  the 
assured,  but  it  is  not  at  once  seen  how  the  assured  could  be 
benefited  by  notice  that  he  had  failed  to  give  information  of 
his  loss  within  the  stipulated  time,  or  how  he  could  be  preju- 
diced by  the  omission  to  state  to  him  that  he  had  failed  to  do 
so.  After  the  time  for  the  giving  of  the  notice  has  expired, 
the  company  need  not  positively  refuse  to  receive  it,  or  take  any 

1  Gamble  v.  Assurance  Co.,    Irish       2  Smith  v.  Ins.  Co.,  1  Allen,  297. 
Reports,  4  Com.  L.  204;  2  Big.    L.  & 
Ace.  Cases,  681. 


ACCIDENT    INSURANCE.  805 

other  unequivocal  steps  to  indicate  its  determination  to  resist 
the  payment  of  the  insurance,  unless  the  notice  is  tendered.1 

A  vote  by  the  directors  of  a  company  to  postpone  indefinitely 
the  subject  of  a  loss  will  not  be  deemed  a  waiver  of  a  condition 
of  a  policy  requiring  notice  to  be  given.2  The  giving  of  a  notice 
of  death  or  injury  may  be  waived  by  a  mutual  insurance  com- 
pany, even  when  such  a  notice  is  required  to  be  given  by  its 
charter.  A  provision  for  the  giving  of  notice  does  not  touch 
the  substance  or  essence  of  the  contract,  or  affect  its  validity, 
but  relates  only  to  the  form  or  mode  in  which  the  liability  of 
the  company  is  to  be  ascertained  and  proved.  It  is  for  the 
guidance  and  benefit  of  the  company,  and  its  officers  may 
waive  it.3  A  stipulation  in  an  accident  policy  that  the  assured 
shall  claim  no  waiver  by  reason  of  any  act  of  the  agent,  unless 
the  agent  is  so  authorized  by  the  president  or  secretary  of  the 
company  in  writing,  is  confined  to  those  provisions  of  the  pol- 
icy which  make  it  a  valid  and  binding  contract,  and  does  not 
extend  to  stipulations  which  are  to  be  performed  after  the  loss 
has  occurred;  and  an  agent,  who  has  power  to  adjust  losses, 
and  whose  recommendations  about  paying  them  are  followed 
by  the  company,  must  be  taken  to  be  a  general  agent,  with 
power  to  waive  the  giving  of  notice  of  an  injur}'.4  Where  the 
secretary  of  a  company  writes  to  the  beneficiary,  or  to  some 
one  acting  for  him,  stating  that  the  claim  is  not  valid  by  reason 
of  the  cause  of  the  death  of  the  insured,  and  because  of  the 
manner  in  which  the  injury  was  received,  it  is  for  the  jury  to 
say  whether  such  statement  does  not  indicate  an  intention  to 
waive  the  giving  of  notice.6  An  accident  policy  required  that 
immediate  notice  of  any  accidental  injury  should  be  given  to 
the  company  in  writing,  and  provided  that  the  failure  to  give 
such  notice  within  ten  days  alter  the  date  of  such  injury  should 
invalidate  all  claims  under  the  policy.     A  month  after  an  acci- 

1  St.  Louis  Ins.  Co.  v.  Kyle,  11  Mo.  Ins.  Co.,  72  Cal.  297;  13  Pac.  Rep.  863; 

278;  Patrick  v.    Ins.    Co.,  43   N.  H.  Somers  v.  Protective  Union,  42  Kans. 

621;  Beatty  v.  Ins.  Co.,  66  Pa.  St.   9;  619. 
Brink  v.  Ins.  Co.,  70  N.  Y.  593.  6  Reynolds   v.  Association,  1  N.  Y. 

8  Patrick  v.  Ins.  Co.,  supra.  Sup.  738;  Prentice  v.  Ins.  Co.,  77  N. 

3  Lewis    v.  Ins.    Co.,  52   Me.  492;  Y.  483;  Brink  v.  Ins.  Co.,  80  N.  Y. 

Broom,  Legal  Maxims,  547.  108;  American   Ins.  Co.  v.  Norment, 

*  Travelers'  Ins.  Co.  v.  Harvey,  82  91  Tenn.  1;  18  S.  W.  Rep.  395. 
Va.  949;  5  S.  E.  Rep.  553;  Carroll  v. 


806  ACCIDENT    INSURANCE. 

dent,  a  letter  was  addressed  to,  and  received  and  retained  by 
the  company,  giving  notice  of  the  injury.  Afterward,  its  sec- 
retary stated  to  an  agent  of  the  plaintiff  that  the  notice  was 
sufficient.  The  court  held  that  it  had  waived  the  requirements 
as  to  the  notice  by  receiving  and  retaining  the  letter.1 

It  is  well  settled  that  defenses  of  insufficient  proofs  or 
notice  are  waived,  when  the  company,  with  knowledge  of  all 
the  facts,  requires  the  beneficiary  under  the  contract  of  insur- 
ance to  do  some  act  or  incur  some  expense  or  trouble, 
inconsistent  with  the  claim  that  the  contract  had  become  inop- 
erative in  consequence  of  a  breach  of  some  of  its  conditions.2 

§  420.  Payment  of  claim  from  a  special  fund  or  in  a 
special  manner. — Where  claims  for  indemnity  are  payable 
only  from  the  accident  fund,  or  from  any  moneys  which  may 
be  realized  for  that  fund  from  an  assessment  upon  the  mem- 
bers of  the  society,  a  claimant's  right  of  recovery  is  limited  to 
the  amount  in  that  fund,  and  to  the  amount  which  can  be 
brought  into  it  by  a  proper  assessment,  according  to  the  plan 
of  insurance.3 

1  Brink  v.  Accident  Association,  7  3  Hesinger  v.  Home  Ben.  Associa- 

N.  Y.  Supp.  847.  tion,  41  Minn.  516;    43  N.  W.  Rep. 

2McNally  v.   Ins.  Co.,  137  N.  Y.  481;  Kerr  v.  Association,    39  Minn. 

389;  33  N.  East.  Rep.  475;  Jones  v.  174;  Supreme  Lodge  v.  Knight,  117 

Ins.  Co.,  117  N.  Y.  103;  22  N.  East.  Ind.  489;    20  N.  East.  Rep.  479;  Old 

Rep.  578;  Trippe  v.  Ins.  Co.,  140  N.  Wayne   Ass'n   v.  Nordby,  122  Ind. 

Y.  23;  35  N.  East.  Rep.  316;  Ins.  Co.  446;  24  N.  East.  Rep.  159. 
v.  Edwards,  122  U.  S.  457;  7  Sup.  Ct. 
Rep.  1249. 


INDEX. 


[the  references  are  to  pages] 

ACCIDENT  INSURANCE. 

generally 099 

what  is  an  accident, 700,  734,  (2-> 

negligence  contributing  to  injury, 701 

due  diligence  f<  >r  personal  safety, 703.  ,  I  4 

obvious  risk, 707 

voluntary  exposure  to  danger 707 

external,  violent  and  accidental  means, 717 

external  and  material  cause, 717,  7 1 9 

external  and  visible  sign 728 

nature,  cause  and  manner  of  death  unknown 730 

with  reference  to  a  particular  employment,. 707,  713,  744,  784,  785,  791 

while  traveling  by  public  or  private  conveyance, 735,  744 

suicide, 306,  726,  748,  730,  761 

ACCIDENTAL  INJURY. 

what  is, 719,  721,  734 

evidence  of, 723,  121.  738 

satisfactory  proof  of, 733.  734 

burden  of  proof, 727,  730,  733,  761 

notice  of , 798 

incapable  of  direcl  and  positive  proof, 730 

nature,  cause  and  manner  of  death  unknown 730 

external  and  material  cause 717 

external,  violent  and  accidental   means 717 

or  murder,  or  suicide, 726,  781,  746 

fits 722,  758,  755,  769 

diving 717 

Stepping  off  train 712,  718 

cleaning  gun 713 

boarding  moving  train 718,  785,  7'.H 

lifting 718,  730 

strain 713.  730,  780,  7  lu 

sunstroke 1-2 

freezing 738 

falling  down  stairs 788 

run  over  by  railroad  cars 781,  786,  758 

while  traveling  by  public  or  private  conveyance 735 

while  traveling  in  compliance  with  rules  of  carrier 738,  744 

(807) 


808  INDEX. 

[the  references  are  to  pagi-s.] 

ACCIDENTAL  INJURY— Continued. 

received  in  employment  contemplated  by  the  parties, 707,  713,  744 

while  walking  on  railroad  track, 705,  710,  712,  745 

fighting, 750 

while  under  influence  of  liquor, 751 

drowning, 753,  754 

choking  to  death, 719,  757 

by  inhaling  gas, 757,  759 

hernia, 762,  766 

poison, 721,  757 

permanent  disability, 771 

loss  of  foot,  eye  or  hand, 770,  777 

ACTION  AT  LAW,  see  Pleading,  Evidence,  Burden  of  Proof, 
Measure  of  Damages. 

on  by-laws  for  benefits, 596,  610 

for  sick  benefits, 595,  601,  602,  606,  610 

for  benefits,  effect  of  expulsion 106,  594,  613 

for  damages  for  expulsion, 107 

suits  by  or  against  an  unincorporated  society, 181 

proper  parties  to  such  actions, 181 

by  members  of  unincorporated  society,  as  such, 183 

against  member,  plea  of  former  recovery, 187 

for   recovery   of  property   of  unincorporated  society, 184 

between  members  of  unincorporated  society, 176 

for  recovery  of  assessments  paid, 523 

parties  to  suit  on  contract  of  insurance, 621 

misjoinder  of    parties, 621 

delay  in  bringing  suit, 623 

limitation  of  action, 615 

for  breach  of  contract  of  insurance, 643 

pleading,  breach  of  promise  to  pay, 644 

pleading,  demand  for  assessment, 647 

plea  setting  up  that  no  fund  has  been  raised  by  assessment, 648 

breach  of  promise  to  pay,  evidence, 650 

measure  of  damages  for  breach  of  contract  of  insurance, 650, 

654,  657,  664 

nominal  damages  for  breach  of  contract  of  insurance, 654 

substantial  damages, 657 

by  original  beneficiary, .  622 

evidence  of  cause  of  death, 631 

for  damages  for  fraudulent  settlement  of  claim, 690 

interpleader  by  society, 429,  686 

proceedings  to  obtain  payment  of  judgment, 693 

AMOTION,  see  Expulsion. 

APPEAL. 

effect  of  appeal  from  order  of  expulsion, 99 

resort  to  court  for  reinstatement  is  not  an  appeal  from  society, . .       112 

when  member  must  appeal, 98,  214,  217,  595,  600 

from  void  judgment, 101 


INDEX.  809 

[the  references  are  to  pages.] 

APPEAL— Continued. 

jurisdiction  when  appeal  is  irregularly  taken, 102 

death  of  member  pending  appeal, 108 

unjust  delay  of  society  in  acting  on, 101 

when  decision  of  appellate  tribunal  is  final,. .  .39,  102,  216,  596,  602,  606 

APPELLATE  TRIBUNAL,  see  Courts  of  Society. 

APPLICATION  FOR  INSURANCE. 

when  minds  of  the  parties  have  met, 275 

change  of  health  of  applicant, 275 

when  applicant  is  treated  as  member, 277 

sent  by  mail, 279 

initiation  of  member, 280 

delay  in  acting  on, 282 

variance  between  certificate  and, 291 

is  admissible  to  show  proper  beneficiary, 300 

ASSESSMENT,  see  Payment  of  Assessment. 

generally, 471 

differs  from  a  premium, 14,  42,  473 

must  be  properly  levied,  and  for  proper  purpose, 473 

when  presumed  to  be  valid, 475 

made  by  foreign  corporation, 476 

on  new  members  to  pay  old  losses, 476,  623 

levy  of,  without  delay, 477 

validity  of,  may  be  questioned, 477 

society  must  establish  validity  of, 301,  477 

act  of  levying  is  ministerial, 477 

custom  in  levying  assessment, 479 

for  reserve  fund, 480 

in  anticipation  of  losses, 481 

effect  of  levy  of,  on  claim  against  society, 482 

notice  of, 482 

when  member  must  have  actual  notice  of, 483,  487,  489 

notice  by  mail  sufficient  when  stipulated  for, 49 

notice  of,  by  mail 483,  486,  500 

evidence  as  to  sending  of  notice  by  mail 487,  4fc9,  490,  500 

when  presumption  arises  that  no  notice  of  was  sent 488 

notice  of,  scut  by  registered  letter 492 

date  of  notice  of, 491 

date  of  assessment,  date  of  notice 494 

notice  of,  by  publication 494 

form  of  notice  of, 48$  500 

time  within  which  notice  must  he  sent 486 

service  of  notice  of, 491 ,  495,  503 

insufficient  notice  of, 498 

waiver  of  formal  defect  in  notice  of 630 

agreement  by  society  to  z'we  notice  of.  to  the  beneficiary 198 

notice  of  date  of  payment  of, 195 

notice  to  pay,  before  it  is  due, 504 


S10  INDEX. 

[the  references  are  to  pages.] 

ASSESSMENT— Continued. 

computation  of  time  within  which,  must  be  paid, 477 

485,491,  492,  495,  506,  509 

payment  of,  by  member, 505 

custom  of  payment, 506 

who  may  pay, 512,  516 

payment  of,  during  life  of  member, 513 

death  within  thirty  days  after  notice  of, 514 

days  of  grace, 530 

custom  of  society  to  accept  past  due  assessments, 514 

officer  of  society  may  waive  prompt  payment  of, 193,  197 

promise  to  accept  past  due  assessments, 524 

promise  of  officer  to  pay,  for  member, 554 

promise  of  agent  to  pay,  for  member, 555 

tender  of, 482,  520,  531 

refusal  of  society  to  accept, 522,  530 

illegally  collected  from  member, 510 

receipt  for,  may  be  contradicted, 519 

return  of  assessment  once  paid, 522 

authority  of  agent  to  collect, 518 

non-payment  may  operate  as  expulsion, 128 

non-payment  of,  prior  to  dissolution, 241 

excuse  for  non-payment,  insanity,  act  of  God, 550 

excuse  for  non-payment,  Sunday, 552 

evidence  of  non-payment,  member's  declaration, 626 

receipt  of,  estoppel  in  pais, 563 

receipt  of  delinquent  assessments, 556,  560,  568,  570,  572,  576 

retained  by  society, 570 

conditional  acceptance  of  delinquent  assessments, 573 

attempt  to  collect  delinquent, 585 

effect  of  levy  of, ... . i 482,  564,  576,  580,  649 

property  interest  in, 589 

mandamus  to  compel  levy  of, 638 

averment  of  demand  for, 647 

evidence  of  amount  which  might  have  been  realized  by  an, 650 

payment  of,  by  beneficiary, 441,  444 

ATTACHMENT. 

of  benefit  fund, 633 

ASSIGNEE  OF  CONTRACT. 

rights  of, 322  et  seq.,  412 

equitable  assignment, 326 

limitation  on  right  to  assign, 328 

consent  and  approval  of  society, 329 

assignment  after  death  of  member, 331 

assignee  of  beneficiary, 331 

designation  of  beneficiary  is  not  an  assignment  of  contract, 322 

validity  of  assignment, 333 

payment  of  benefit  fund  to, 078,  679 


INDEX.  811 

[tttf.  rkferences  are  to  pages.] 

ARBITRATION  CLAUSES. 

enforcement  of, 596,  607,  609 

BENEFICIARY,  see  Who  May  be  Beneficiary. 

in  an  ordinary  policy  of  insurance, 403 

rights  of,  in  mutual  benefit  insurance, 272,  405 

lias  no  rights  in  contract  to  assign, 331 

assignee  of  contract 322 

designated  by  by-laws  or  certificate 339 

named  in  charter, 20,  194 

may  liclongto  any  specified  class, 317 

ineffectual  designation  of, • 312,  340 

effect  when  designation  is  invalid, 22 

want  of  designation  of, 342,  437 

incomplete  designation  of, 448 

designation  of  new  beneficiary, 332 

designation  of  by  will,* 41 

411,  417,  40-2.  42(5.  436,  439,  441.  452,  455,  4.18,  463 

when  beneficiaries  take  equally, 399 

when  beneficiaries  hold  in  joint  tenancy 394 

agreement  of  member  and  beneficiary  as  to  disposition  of  bene- 
fit fund, 398 

death  of  member  and  beneficiary  at  same  moment 308 

when  a  class  of  persons  is  designated  to  take  the  fund 395,  396 

when  member  becomes,  by  inheritance, ;:ss 

death  of,  during  life  of  member, 39 1 

construction  of  designation  of, 334 

effect  of  amer d  nent  of  organic  law, ;il 7 

statement  of  relationship  of,  to  member, 344.  348,  350 

delivery  of  certificate  to,  not  necessary I  I". 

gift  of  certificate  to, 441 

inserting  name  of,  mistake 299 

agreement  of  society  to  give  notice  of  assessments  to ins 

marriage  of  member,  effect  on  designation  of 463,  L64 

when  estopped  to  deny  validity  of  change  of i  in.  457 

rights  of ,  through  rights  of  member  to  reinstatement,.  103,  546,  551,  555 
power  of  member  to  appoint,...  332,  405,  410,  413,  415,  152,  158,  162,  163 

change  of 272,  105 

change  of  beneficiary  without  the  consent  of  the  original  bene- 
ficiary        109 

mode  of  changing 415 

when  change  of.  is  perfected 481 

fraudulent  change  of 461 

when  power  to  change,  is  exhausted 465 

time  within  which  power  to  change,  musf  be  exercis<  d 466 

refusal  of.  to  surrender  certificate 138,  I  hi.  i  ij 

who  may  he  designated  as  a  new 445 

when  unincorporated  lodge  may  he ;>,19 

creditor, 22,  28,  886,  840,  843,  676,  679 

family, :M7.  374,  890,  B95,  447 


812  INDEX. 

[the  rfferences  are  to  pages.] 
BENEFICIARY— Con  tinned. 

widow, 337,  340,  341,  343,  365,  368,  371,  399,  400.  401 

fund  payable  to  wife  for  benefit  of  herself  and  children, 351,  373 

wife  and  children, 353 

wife  and  children  equally, 356 

when  divorced  wife  may  be, 320 

mistress, 343,  379 

heirs,  legal  heirs,  heirs  at  law, 364,  399 

next  of  kin, 338,  364,  372 

child  born  after  issuing  certificate, 359 

child, 357,  373,  395 

child,  grandchild, 361 

orphan, 372 

dependent, 376,  399 

betrothed, 377 

sister 377 

mother, 339,  375,  377,  446 

niece, 375,  390 

relatives, 379,  399 

devisees, 41,  313,  341 

administrator  of  member, 337,  343,  388,  391,  394,  460 

administrator  of '. 391,  393,  394,  396,  397 

legal  representatives, 335,  380,  391,  392,  451 

"  friend  of"  the  member, 20,  36,  312 

the  assured, 383 

guardian, 384 

estate  of  the  member, 386 

may  pay  assessments  on  member, 512,  516 

effect  of  return  of  assessments  once  paid, 522 

when  entitled  to  interest  on  claim, 692 

settlement  procured  from,  by  fraud, 689 

notice  not  to  pay  benefit  fund  to, 678 

payment  of  benefit  fund  to, 672 

admissibility  of  declarations  of  member  against, 626 

parol  evidence  to  show  who  is  the, 619 

limitation  of  action  by, 615 

BENEFIT  FUND,  see  Payment  of  Benefit  Fund. 

payment  of,  to  living  members, 7,  13,  15 

may  not  be  paid  to  ineligible  member, 24 

guaranty  fund, 16.  58 

tontine  fund, 15,  231 

when  by-laws  relating  to,  may  be  changed, 50 

vested  right  in, 50,  57,  405 

damages  for  unlawful  expulsion  payable  from, 108 

equitable  lien  on, 327,  note 

payment  of  losses  of  another  society, 234 

duty  of  officers  to  protect, 199,  200,  227,  248 

when  impressed  with  a  trust, , 247 


INDEX.  813 

[the  references  are  to  pages] 

BENEFIT  FUND— Continued. 

law  governing  distribution  of. 2>-~ 

priority  of  death  claims  on  dissolution, 237 

distribution  of,  on  dissolution, 236,  239 

insolvency  of  society, 233,  242,  246.  592 

is  a  trust  fund 593 

misapplication  of 199,  200,  227,  233,  246,  248 

collected  from  the  public  for  sufferers, 248 

agreement  of  member  and  beneficiary  as  to  disposition  of, 398 

disposition  of,  by  last  will, 411 

417,  422,  426,  436,  439,  441,  452,  453,  458,  463 

collected  for  sick  benefits, 510 

payment  from  reserve  fund, 4*0 

payment  of  assessment  does  not  recognize  claimant's  right  to,. . .       482 

effect  of  payment  of,  into  court, 429,  688 

lien  on  for  payment  of  assessments 525 

when  subject  to  member's  debts, 463 

attachment  of.  garnishment 633 

averment  that  no  fund  has  been  raised  by  assessment, 648 

payment  of 072 

payment  of,  is  not  a  gift, 7,  672 

payment  of  less  amount  than  is  due, |>SS 

when  beneficiaries  take  equally, 399 

in   what  proportions  heirs  take  the  fund 401 

adultery  of  wife  or  widow,  effect  on  right  to, 350 

settlement  procured  by  fraud  of  society, 689 

payment  of.  to  creditor, 676.  679 

payment  of,  to  wrong  person, 675 

notice  not  to  pay  to  beneficiary, 678 

member  may  not  enjoin  payment  of, C91 

interest  on  claim  against 692 

payment  of  loss  from  special  fund,   806 

BOARD  OF  TRADE. 

membership  may  be  sold  for  benefit  of  creditors 39 

reasonable  by-laws  of, 40,  45.  18 

expulsion  from, 8-4.  B6,  125 

injunction  to  restrain  illegal  expulsion  from 105 

suspension  of  member, 7.1 

BODILY  INFIRMITY. 

of   member, 768 

known  to  society 7r,s 

near-sightedness  i>  aol  a 769 

BURDEN    OF  PROOF. 

to  show  that  change  of  beneficiary  is  invalid 412 

as   to  validity  of   assessment 477 

to   establish  non-payment  of  assessment .l::o 

falsity  of   statement   in  application 622 

on   assignment  of  certificate, 622 


814  INDEX. 

[THE  references  are  to  pages.] 

BURDEN  OF  PROOF—  Continued. 

to  show   good  standing  of  member, 301,  624 

mistake  in  proofs  of  death, 630 

as  to  measure  of  damages  for  breach  of  contract  of  insurance,  652,  664 

to  show    negligence, 704,  707 

of  accidental  injury, 727,  730,  733,  761 

BY-LAWS. 

definition  of . , 31 

dignity  of, 23 

must  apply  to  all  members, 31 

only  govern  officers   and  members, 32 

when  third   person  has   rights  under, '. . . .         32 

are  binding  on  members, 33 

member  assents  to  provisions  of, 113 

when  are  binding  on  members, 211 

void  in  part, 33 

provisions  of,  which  are  binding  on  member,    273 

assignee  of  certificate  bound  to  know  them, 196 

must  be  liberally  construed, 32,  625 

against  common  right  are  strictly  construed, 600 

affected  by  custom, 33 

waiver  of  by  officer, 1 94 

must  be  introduced  in  evidence, 33 

may  be  proved  by  printed  copies, . . . , 33 

differ  from  mere  rules  of  business, 35,  274 

must  be  legal 35 

relating  to  strikes,  etc. 36 

regulating  fees  and  wages, 37,  47 

rules   for  discipline  of  members  must  be  legal 40 

ex  post  facto  laws, 41,  126 

must  be  consistent  with  charter, 41,  453 

what  controls  validity  of, 42 

reasonableness  of, 44 

differ  from  special  stipulations 49 

decision  of  officer  may  have  force  of  a 291 

right  to  pass  is  continuous, 66,  209,  219 

amendment   of, 34,  50,  62 

amendment  of  must  be  reasonable 58 

how,  may  be  amended,  58  et  seq. 

when  amendment  of,  binds  member, 59 

power  to  amend  is  continuous, 250 

society  may  pass  or  amend, 219 

of  future  enactment, 64 

when   retroactive, 56,  61 ,  62,  65 

repeal  of, 65,  197,   209 

of  unincorporated  society  providing   for  expulsion, 145 

are  a  part  of  contract  of  insurance, 271 

variance  between  certificate  and, 294 


INDEX.  815 

[the  references  are  to  pages.] 

BY-LAWS— Continued. 

provisions  concerning  changing  beneficiaries, 406,  411 

when,  prohibit  change  of  beneficiary 415 

provisions  concerning  reinstatement, 542 

authority  under,  to  levy  assessments, 474 

action  on, 610 

CERTIFICATE  OF  MEMBERSHIP,  see  Contract  of  Insurance. 

in  mutual  benefit  society 272 

what  constitutes  contract  of  insurance, 271 

delivery  of 275 

delivery  to  subordinate  lodge, 270 

delivery  of,  to  beneficiary, 295 

delivery  to  beneficiary  not  necessary, 445 

effect  of  delivery  of,  to  beneficiary, 441 

gift  of,  to  beneficiary, 441 

countersigning  of, 277,  281 

issued  after  death  of  member, 278 

where  executed 281 

delay  in  issuing 282 

construction  of, 2s  4 

variance  between  applicatii >n  and 21tl 

when  terms  of,  are  inconsistent  with  a  by-law 2U4 

by  whom,  must  be  signed 295 

must  be  accepted  in  its  entirety, 295 

is  a  valued  policy, 296 

reformation  of,  mistake, 297 

good  standing  of  member 301,  531,  535,  541,  5 15,  62  I 

attachment  of,  garnishment 633 

assignment  of, 322 

payment  of  assignee  of, 678,  679 

failure  to  issue, 272, 

provisions  concerning  changing  beneficiaries 406,  111 

when  prohibits  change  of  beneficiary 41o 

refusal  of  beneficiary  to  surrender 433,  1  M),  1 12 

1.  iss  i  >f 434 

reformation  of  by  court. 449 

limitation  of  action, 616 

pleading  on 620 

evidence  in  action  on, 620 

paymenl  of,  on  surrender  of 665 

evidence  of  numberof  certificates  outstanding 652 

CHANGE   OF    BENEFICIARY,  see    BENEFICIARY,  Who    May  Be 
Beneficiary. 

right  of  member  to  change 405 

without  the   consent  of  the  beneficiary 409 

consenl  of  society  to  change 829,  U5,  480,  188,  150 

b3  last  will 411,  417,  422,  426,  186,  489,  141,452,  455,  458,  463 

by  power  of  appointment 332 

405,410,41:?.  us,  152,  158,  462,  163,  465,  4G0 


810  INDEX. 

[the  references  are  to  pages.] 

CHANGE  OF  BENEFICIARY— Coyitinued. 

where  no  mode  is  agreed  upon  in  the  contract, 41 0 

presumption  that  change  was  properly  made, 412 

no  presumption  that  a  change  has  been  made, 412 

may  not  be  made  when  charter  forbids  it, 413 

when  by-laws  prohibit, 415 

when  prohibited  by  terms  of  certificate, 415 

when  mode  agreed  upon  must  be  substantially  followed, 415 

requires  an  affirmative  act, 416 

where  original  certificate  is  in  existence, 418 

by  substituted  contract, 418 

when  prescribed  mode  is  mandatory  and  exclusive, 420 

when  prescribed. mode  is  directory  merely, 426 

general  observations, 429 

who  may  object  to  validity  of  change, 415,  429,  430 

effect  of  payment  of  fund  into  court, 429,  686 

when  perfected, 431 

refusal  of  beneficiary  to  surrender  certificate, 433,  440,  442 

loss  of  certificate, 434 

when  society  is  estopped  to  deny  the  validity  of  a  change  of  bene- 
ficiaries,        439 

when  beneficiary  is  estopped  to  deny  validity  of, 440 

effect  of  delivery  to  beneficiary  on  right  to  make  a  change, 441 

where  certificate  has  been  delivered  as  a  gift, 441 

when  may  not  be  made,  special  agreement, 444 

who  may  be  designated  as  a  new  beneficiary, 445 

inoperative  change,  effect  on  original  designation, 446 

incomplete  designation, 448 

in  application  for  reinstatement, 450 

when  certificate  is  payable  to  legal  representatives, 451 

fraudulent  change, 451 

by  marriage  of  member, 463,  464 

when  power  to,  is  exhausted, 465 

time  within  which  power  to  change  must  be  exercised, 466 

CHANGE  OF  OCCUPATION,  see  Occupation,  Classified  Risks. 

what  is, 786 

when  contract  does  not  prohibit, 783 

parol  evidence  concerning, 788 

CHARGES  AGAINST  MEMBER,  see  Expulsion. 

must  be  proved, 92 

of  unincorporated  society, 151 

notice  of, 94,  122,  127,  129 

sufficiency  of  notice, 130,  133 

service  and  proof  of  notice  of, 134 

when  notice  need  not  be  given, 129 

waiver  of  notice  of, 1 35 

answering  charges  when  presented, 137 

breaches  of  corporate  duty, 83,  127 

improper  conduct, 123,  125,  150 


INDEX.  817 

[the  references  are  to  pages.] 

CHARGES  AGAINST  MEMBER— Continued. 

bringing  suit  in  public  courts, 40,  125 

slander  of  society, 123 

defrauding  society, 124 

may  be  libelous, 171 

CHARITY. 

when  society  is  regarded  as  a  charity, 244 

when  a  society  is  not  a, 246 

mutual  benefit  society  as  a  charity, 255 

eleemosynary  charity, 265 

CHARTER. 

regulates  plan  of  insurance, 13,  472 

controls  the  by-laws, 41 

is  part  of  contract  of  insurance, 271 

qualification  of  members, 67 

power  of  expulsion  conferred  by, 81 

franchise  is  a  valuable  right, 113,  155 

member  assents  to  provisions  of, 113 

provisions  as  to  beneficiaries, 194 

fraternal  charter, 215 

revocation  of  fraternal  charter, 235,  253 

amendment  of, 227.  228 

is  not  under  control  of  supreme  lodge, 254 

prescribing  beneficiaries, 311,  335 

terms  of,  liberally  construed, 314 

effect  of  amendment  of  organic  law, 317 

beneficiary  may  belong  to  any  specified  class, 317 

change  of  beneficiary  by  last   will 341,  452 

provisions  concerning  changing  beneficiaries,   406,  411,  413 

effect  of  amendment  of  organic  law 445 

authority  to  levy  assessments 473 

provisions  as  to  reserve  fund, 480 

provisions  concerning  notice  of  assessment, 561 

CHURCH,  see  Religious  Societies. 

CLASSIFIED  RISKS,  see  Occupation. 

hazardous  occupations 788 

when  society  is  bound  by  its  classification 797 

when  member  is  bound  by  classification 798 

CLUB. 

[lability  Of  members  for  debts  of, ICn.  [(Jg 

expulsion  from 83.  1 17 

CONSTITUTE  >N,  see  <  'haktf.k.  My-i.aws. 

differs  from    charter H 

of  incorporated  society gg 

of  unincorporated  society  controls  by-laws it 

effect  on,  when  societj  becomes  incorporated 45 

is  part  of  contract  of  insurance, 271 

52 


818  INDEX. 

[the  bfferencf.s  are  to  pagis.] 

CONSTITUTION— Continued. 

provisions  of  which  bind  member, 273 

alteration  and  repeal  of, 63 

CONTRACT  OF  INSURANCE,  see  Certificate  of  Membership. 

rights  of  member  under, 9,  273,  405 

charter  regulates  plan  of  insurance, 13,  472 

change  of  plan, 58,  670 

is  testamentary  in  its  nature, 344,  433 

must  apply  to  all  members  of  the  class, 31 

by-laws  differ  from  special  stipulations, 49 

consent  of  member  to  a  change  in, 58,  273 

subject  to  future  by-laws, 58,  62,  274 

procured  by  false  representations, 71 

is  between  society  and  member, 272,  290,  407,  465 

application  for, 275  et  seq. 

when  complete, 275 

where  executed, 281 

delay  in  issuing, 282 

is  unilateral, 290,  471 

there  are  several  forms  of, 637 

construction  of, 284 

should  be  liberally  construed, 625 

construction  of  by  officers  of  society 286 

construction  given  to,  by  the  society, 290 

variance  between  application  and  certificate, 291 

when  certificate  is  inconsistent  with  the  terms  of  a  by-law, 294 

by  whom,  must  be  signed, 295 

delivery  of,  to  beneficiary, 295 

must  be  accepted  in  its  entirety, 295 

is  a  valued  policy, 296 

reformation  of,  mistake, 297 

novation  of, 27,  300,  529 

good  standing  of  member, 301,  535,  541,  545,  624 

suicide, 303 

known  violation  of  law, 306 

who  may  be  a  beneficiary  of, 311 

assignment  of, 322  et  seq. 

interest  of  member  in, 332, 

405,  410,  413,  415,  452,  456,  458,  462,  463,  465,  466 

rights  of  beneficiary  in  an  ordinary  policy, 403 

rights  of  beneficiary  in  mutual  benefit  insurance, 405 

abandonment  of  old  contract  by  member  and  society, 418 

substitution  of  new  contract, 418 

loss  of, : 434 

effect  of  delivery  of,  to  beneficiary, 441 

delivery  to  beneficiary  not  necessary, 445 

effect  of  marriage  of  member, 463,  464 

when  power  to  change  beneficiaries  is  exhausted, 465 


INDEX.  819 

[THE  rfferencfs  are  to  pagis.] 

CONTRACT  OF  INSURANCE— Continued. 

time  within  which  power  to  change  beneficiaries  must  be  exer- 
cised,         466 

membership  fee, 468 

authority  to  levy  assessments, 473 

notice  of  assessment 482 

notice  of  assessment  by  mail, 486 

date  of  assessment,  date  of  notice, 494 

notice  of  assessment  by  publication, 494 

service  of  notice  of  assessment, 495 

insufficient  notice  of  assessment, 498 

payment  of  assessment, 505 

payment  of  assessment  out  of  funds  in  hands  of  society, 509 

by  whom  payment  of  assessment  may  be  made, 512 

when  assessment  must  be  paid  during  life  of  member, 513 

payment  of  assessment,  days  of  grace, 514 

payment  to  subordinate  lodge, 516 

authority  of  agents  to  collect  assessments 518 

receipt  for  assessments  may  be  contradicted, 518 

refusal  of  society  to  accept  assessments, 522,  530 

tender  of  assessments, 482,  516.  520 

return  of  assessments  once  paid, 522 

recovery  of  assessments  paid  by  member, 523 

void  ab  initio, 523 

promise  of  society  to  accept  past  due  assessments, 524 

forfeiture  for  non-payment  of  assessment, 526 

declaration  of  forfeiture  of, 532.  536 

waiver  of  forfeiture 554 

affirmance  of,  after  death  of  member, 571 

action  on, 594,  643 

suit  in  equity  for  breach  of, 640 

limitation  of  action, 616 

evidence  in  action  on, 620 

pleading  on, 620 

harden  of  proof, 663,  66  \ 

measure  of  damages 652.  664 

remedy  for  breach  of 638,  640.  643 

measure  of  damages  for  changing  plan  of  insurance 670 

payment  of  benefit  fund  according  to  terms  of 672,  678 

forbenefil  of  creditor 679 

repudiation  of 57 

COURTS,  see  Appeal. 

do  not  consider  merits  of  plans  of  insurance, 3 

decide  whether  by-law  is  valid 32 

determine  whether  by-laws  are  reasonable 44.  45 

will  not  inquire  into  wisdom  of  change  in  by-laws 250 

member  may  resort  to 89,  40,   108,  216,  595,  600,  606 

will  not  compel  admission  of  applicant  for  membership 68 

visitorial  power  of, 44,  112,  213.  851 


820  INDEX. 

[the  references  are  to  pages.] 
COURTS—  Continued. 

are  loath  to  take  jurisdiction  in  internal  matters  of  society,  .98,  106,  214 

when  courts  will  not  take  jurisdiction, 217 

interfere  to  protect  property  rights  only, 217 

niay  not  be  ousted  of  jurisdiction, 39,  216,  606 

when  laws  of  society  will  not  be  interpreted  by, 219 

injunction  to  restrain  illegal  expulsion , 105 

effect  of  expulsion  on  claim  for  benefits, 106,  594,  613 

have  no  appellate  jurisdiction  in  cases  of  expulsion, 112 

determine  the  right  to  proceed  in  expulsion, 114 

will  not  investigate  weight  and  competency  of  evidence  in  pro- 
ceedings in  expulsion, 115 

reinstatement  of  member  by  mandamus, 118 

will  protect  right   to  reinstatement, 546,  551 

proceedings  in  expulsion  strictly  construed, 122,  154 

jurisdiction  in  matters  pertaining  to  officers, .190,  192  202 

when  construction  of  contract  of  insurance  by  officers  will  be 

adopted  by, 290 

jurisdiction  over  societies, 213 

status  of  unincorporated  society  in, 221 

do  not  regulate  unincorporated  societies 151 ,  153 

will  not  determine  whether  by-laws  of  unincorporated  society 

are  reasonable, 44 

will  dissolve  unincorporated  society, 223 

will  dissolve  incorporated  society, 226,  233 

may  appoint  receiver  of  society, 235 

will  protect  trust  funds, 248,  249 

when  property  will  be  divided  by, 251 

jurisdiction  over  religious  societies, 257 

ecclesiastical  jurisdiction 257 

will  reform  certificate  for  mistakes, 297,  449 

will  compel  beneficiary  to  execute  a  trust  with  the  benefit  fund, .       398 

assume  that  society  has  no  tribunal, 214 

will  afford  relief  in  changes  of  beneficiaries, 420,  431 

levy  of  assessment  by, 589 

abridging  common  right  to  resort  to, 597,  600 

remedies  in  courts  of  society  must  be  exhausted, 98,  214,  597 

contract  to  resort  to  equity, 642 

remedy  for  breach  of  contract  of  insurance, 640,  643 

limitation  of  action, 615 

delay  in  bringing  suit, 623 

should  construe  contract  liberally, 625 

proceedings  to  obtain  payment  of  judgment 693 

restricting  operation  of  judgment  against  society, 694 

COURTS  OF  SOCIETY,  see  Appeal. 

may  be  established, 39,  102,  216,  596 

no  presumption  that  any  courts  exist, 101,  214 

whose  decision  shall  be  final 39, 102,  216,  596,  602,  606 

appeal  to  higher  courts  of  society 98 


INDEX.  821 

[the  references  are  to  pages.] 
COURTS  OF  SOCIETY—  Continued. 

remedies  in  must  be  exhausted, 98,  214,  597 

are  judicial  in  their  character, 105 

jurisdiction  of  appellate  tribunal, 101 

when  appeal  is  unjustly  delayed, 101 

when  appeal  need  not  be  taken  in, 101 

death  of  member  pending  appeal, 103 

tribunal  of  society  expelling  a  member 138 

power  of,  to  expel,  must  be  shown, 1  :>>  3 

notice  to  members  of  tribunal, 132 

testimony  of  member  of, 96 

member  may  waive  irregularity  in  way  the  court  is  constituted.  139 

consanguinity  or  affinity  to  either  party, 139 

acts  judicially  in  expelling  member, 96 

are  presumed  to  have  acted  fairly, 100 

where  legality  of  expulsion  is  determined 107 

when  must  be  resorted  to  for  reinstatement  of  member, 98 

methods  for  settlement  of  claims  against  society, 595 

CUSTOM. 

must  be  proved  as  a  fact, 1  l'">.  858 

will  not  be  construed  into  a  by-law, 33 

of  determining  membership, 73 

in  expulsion  of  members, 146 

in  levying  assessments, 479 

of  paying  assessments, 506 

to  accept  past  due  assessments, 513 

to  pay  assessments  to  certain  persons, 521 

waiver  of  forfeiture, 556 

to  give  notice  of  time  when  assessments  arc  due, •">."><» 

of  sending  notices, 559,  561 

to  give  days  of  grace, 562 

as  to  salary  of  officer, 198 

in  subordinate  lodge 563 

to  deal  with  scandalous  conduct  of  members  of  a  church, 172 

DEATH  CLAIMS,  see  Benefit  Fund. 

DEATH  OF  MEMBER. 

proximate  cause  of, 768 

within  ninety  days 7"»'i 

notice  of, 798 

before  issi t  certificate 376,  ~77 

before  time  for  paj  ment  expires 485,  515 

DEVISEES. 

as  beneficiaries,  ..341,  411.  117.  122,  126,  136,  439,  4-41.  (Vj.  |.v,.  i:,s,  463 

DISEASE. 

death  from,   723,  754.  758,  762,  768,  TUT,  768 

free  from 310 

erysipelas, 730,  762,  766,  767 


822  INDEX. 

[the  references  are  to  pages.] 

DISSOLUTION  OF  SOCIETY. 

of  unincorporated  society, 223  et  seg. 

of  incorporated  society, 226 

by  its  own  act, 232 

distribution  of  property, 233 

filing  of  bill  for, 242 

notice  of  special  meeting, 225 

DIVING. 

accidental  injury  from, 717 

DIVORCED  WIFE. 

when,  may  be  beneficiary, 320,  368,  376 

rights  under  a  contract  of  insurance, 442 

DROWNING. 

death  resulting  from, 753,  754 

DUE  CARE  FOR  PERSONAL  SAFETY. 

in  accident  insurance, 703,  704,  712,  791 

EQUITY,  see  Courts. 

reinstatement  of  expelled  member, t 110,  153 

when  courts  will  not  interfere, 98,  214,  217,  595 

dissolution  of  unincorporated  society, 223 

dissolution  of  incorporated  society, 226 

trust  funds  of  society, 250 

remedy  in,  for  breach  of  contract  of  insurance, 640 

contract  to  resort  to, 642 

remedy  in  equity  discussed, 657 

interpleader  by  society, 429,  686 

proceedings  to  obtain  payment  of  judgment, 693 

ERYSIPELAS. 

death  from, 730,  762,  767 

EVIDENCE,  see  Burden  of  Proof. 

of  custom  of  society, 33,  146,  258,  556,  557,  562 

of  by-laws, 33 

must  be  introduced  to  sustain  charges •. . .        96 

when  members  of  a  court  may  testify, 96 

as  to  debt  of  unincorporated  society, 163 

record  of  meetings  of  unincorporated  society, 164 

of  want  of  notice  of  meeting, 208 

of  suicide, 303 

known  violation  of  law, 306 

as  to  who  died  first  in  common  disaster, 397 

parol,  to  show  what  beneficiary  is  to  do  with  the  fund 398 

no  presumption  that  right  to  change  beneficiaries  is  abridged, . . .       412 

of  the  necessity  for  an  assessment, 475 

records  of  society  as  evidence  of  validity  of  assessment, 478 

parol,  that  assessment  was  levied, 479 

as  to  mailing  notices  of  assessment, 487,  489 

prima  facie  evidence  of  receipt  of  notice, 490 

of  service  of  notice  of  assessment, 490,  491,  496 


INDEX.  823 

[the  references  are  to  pages] 

EVIDENCE—  Continued. 

of  receipt  of  assessment  by  society, 519 

of  agency, 519 

of  statements  of  officers, 522 

of  sufficiency  of  certificate  of  good  health, 546 

satisfactory  evidence  of  good  health, 546,  575 

of  waiver  of  forfeiture, 580 

parol,  to  show  who  is  proper  beneficiary, 619 

of  insurable  interest 621 

when  certificate  is  not  introduced  in, 623 

of  good  standing  of  member, 301.  531,  535,  541,  545,  624 

rulings  on  questions  of, 625 

of  declarations  of  member, 626 

application  for  reinstatement  evidence  of  forfeiture, 629 

common  law  evidence, 631 

breach  of  promise  to  pay, 646 

of  amount  which  might  have  been  realized  by  an  assessment, . . .       650 

parol,  to  show  number  of  members  of  society, 651 

of  fraud  in  procuring  settlement  of  claim, 689,  691 

of  negligence  avoiding  accident  insurance 702,  704,  707 

of  death  by  disease, 723,  754,  756,  763,  767,  768 

of  suicide  or  accidental  injury, 726,  748,  750,  752,  761 

of  murder, 726,  746,  748 

parol,  concerning  change  of  occupation, 788 

of  accidental  injury, 723,  730,  733,  748,  750,  754,  756,  761 

circumstantial  evidence  of  accidental  death, 730,  761 

EXPULSION,  see  Forfeiture. 

by  foreign  corporation, 40 

amotion,  suspension, 75 

from  incorporated  society, 78 

power  conferred  by  charter, 81 

surrender  of  right  of, 90 

breaches  of  corporate  duty, 83 

from  religious  society, 88 

from  church, 90 

offense  must  be  proved, 92 

right  to  trial  by  jury, 91 

statute  of  limitations, 91 

double  sentence, 91 

regularity  of  proceedings, 92 

for  offensive  language, 92 

twice  in  jeopardy, 93 

restoration  of  member  to  expel  him  properly 93 

whi'e  appeal   is  pending, n:{ 

constitution  and  by-laws  must  be  observed, 94 

where  no  mode  is  specified, 95 

record  of  proceedings, 96 

right  of  appeal 99 

reinstatement  through  courts  of  society, 98 


S24:  INDEX. 

[tite  references  are  to  pages.] 

EXPULSION— Continued. 

without  jurisdiction, 101 

injunction  to  restrain, 105 

effect  of,  on  action  for  benefits, 106,  613 

action  for  damages  for, 107 

member  physically  kept  out, 40,  109 

when  proceedings  in  are  conclusive 112 

proceedings  must  accord  with  the  rules, 114 

courts  determine  the  right  to  proceed   in, 114 

witnesses  in  proceedings  for, 114 

irregularity  in  proceedings  may  be  waived, 116 

when  member  is  insane, 116 

notice  of  charges  and  meeting, 94,  122,  127,  130,  133 

notice  to  members  of  tribunal 132  et  seq. 

service  and  proof  of  notice, 134 

appearance  of  member, 92,  135 

waiver  of  notice, 135 

answering  charges  when  presented, 137 

tribunal  of  the  society  expelling  a  member 138 

authority  of  tribunal  to  expel   must  be  shown, 138 

member  may  waive  irregularity, 139 

consanguinity  or  affinity  of  ■member  of  tribunal, 139 

presumption  that  proceedings  in,  are  fair, 116 

good  faith  in  proceeding, 140,  153,  154  173 

malice  in  proceeding  in, 140,  153,  172 

from  unincorporated  society, 142 

from  unincorporated  society  under  contract  of  association, 147 

proceedings  in  unincorporated  society  must  be  fair  and  in  good 

faith, 154 

review  of  proceedings  in  unincorporated  societies, 154 

charges  against  member  may  be  libelous, 172 

delay  in  seeking  for  restoration, 549 

EXTERNAL  AND  VISIBLE  SIGN. 

of  accidental  death, 728,  761 

EXTERNAL,  VIOLENT  AND  ACCIDENTAL  MEANS. 

death  or  injury  from, 717,  719 

poison, : 721,  757 

choking  to  death, 719,  757 

sunstroke, 722 

FAINTING,  see  Fits. 

member  subject  to  fainting  spells, 754 

FINE. 

provisions  for, 91,  150 

FITS. 

death  resulting  from, 722,  753,  755,  769 

FORFEITURE,  see  Expulsion. 

charter  provisions  for. 42,  538 

must  be  provided  for, 526 


INDEX.  825 

[the  references  are  to  pages.] 

FORFEITURE— Continued. 

for  non-payment  of  assessment 127,  526,  532,  536 

non-payment  of  assessment  may  work,  ipso  facto, 536 

when  affirmative  act  of  society  is  necessary, 532 

when  affirmative  act  of  society  is  not  necessary, 536 

declaration  of  nunc  pro  tunc 534 

application  for  reinstatement  as  evidence  of, 629 

society  may  waive, 537,  539,  554 

waiver  of,  by  officer, 193 

waiver  of,  notice  to  officer, 193 

waiver  of,  procured  by  false  representations, 530,  548 

waiver  of,  by  subordinate  Lodge 539 

waiver  of,  by  reinstatement, 549 

restoration  after  forfeiture, 542 

FRATERNAL  CHARTER. 

social  or  fraternal  charter, 215,  235,  253 

FREEZING. 

death  by, 723 

GARNISHMENT. 

of  benefit  fund, 633 

GOOD  FAITH. 

in  preferring  charges  against  member, 172 

in  proceedings  hi  expulsion, 140,  154,  173 

GOOD  HEALTH. 

of  member, 310.  55 1 .  573 

change  in  health  of  member 275,  380 

as  a  condition  of  reinstatement, 545,  54  7 

sufficiency  of  certificate  of, 546 

inquiry  into, 557,  570 

satisfactory  evidence  of, 575,  579 

GOOD  STANDING. 

of  member, 801,  531,  535,  541,  545,  624 

notice  of  assessment, 482 

HEIRS. 

designation  of, 364 

widow  may  l>e  an  heir  of  her  deceased  husband :'><'>•"» 

the  word  has  a  technical  signification 867 

divorced  wife  is  not  an  heir 321,  368 

when,  take  tiie  fund  equally -'>w.  401 

pa  v  met  it  of  fund  to 677 

iirxi  of  kin, 338,  864,  872 

IIKKXIA. 

death  from 702,  766 

INCORPORATED  SOCIETY. 

rights  of  members  may  be  two-fold 9 

corporate  rights  of  member, 9,  5C8 


826  INDEX. 

[the  references    are  to  pages.] 

INCOEPORATED  SOCIETY—  Continued. 

not  for  profit, 9,  14,  15,  23,  40,  227 

is  governed  by  its  charter, 11 

for  literary,  scientific  or  religious  purposes, 12,  87 

when  usurping  functions, 12 

plan  of  doing  business, 13 

how  plan  of  doing  business  must  be  set  forth, 18 

corporation  de  facto, 13,  159 

when  corporate  existence  may  not  be  attacked, 19 

is  not  subject  to  corporation  of  another  state, 40 

ultra  vires, 19 

constitution  of, 25 

from  unincorporated  society, 26 

inherent  power  to  pass  or  amend  by-laws 219 

power  to  enact  by-laws  is  continuous, 66,  209, 219 

by-laws  must  be  legal, 35 

by-laws  of,  must  conform  to  charter, 41 

by-laws  of,  must  be  reasonable, 44 

visitorial  power  of  courts  ovei, 44,  112,  214 

amendment  of  by-laws, 33,  50 

repeal  of  by-laws, 65 

admission  into, 67 

power  of  amotion, 77 

power  of  expulsion, 78,  113 

inherent  power  of  expulsion, 88 

breaches  of  corporate  duty 83 

surrender  of  right  to  expel, 90 

record  of  proceedings  in  expulsion, 95 

expulsion  irregularly  conducted, 113 

membership  in,  is  a  valuable  right, 113 

reinstatement  to  membership  in, 112 

mandamus  to  compel  reinstatement  to, 117 

liability  of  member, 157 

when  attempted  incorporation  is  invalid, 158 

when  corporate  acts  are  binding, 210 

when  acts  of,  are  legally  operative, 475 

dissolution  of, 226,  233 

rights  of  seceding  members, 251 

act  amendatory  of  organic  law, 317,  445 

right  to  change  beneficiary  of  insurance, 405 

INHALING  GAS. 

death  by, 757,  759 

INITIATION. 

date  of 477 

may  be  stipulated  for, 49 

may  be  necessary  for  membership, 280 

INJUNCTION. 

to  restrain  illegal  expulsion, 105,  151 

to  reinstate  member, 110 


INDEX.  827 

[the  references  are  to  pages.] 

INJUNCTION— Continued. 

to  restrain  libel  on  society, 186 

courts  niay  issue  to  prevent  abuses, 213,  236 

erroneous  plans  of  insurance, 220 

to  restrain  unauthorized  use  of  funds, 220,  232 

to  restrain  illegal  act  of  society, 220 

member  may  not  enjoin  payment  of  benefit  fund, 691 

INSANITY  OF  MEMBER. 

as  an  excuse  for  non-payment  of  assessment, 550 

expulsion  of  member  while  insane, 116 

INTENTIONAL  INJURIES. 

inflicted  by  insured  or  any  other  person, 726,  746 

INTEREST. 

on  claim  against  society  for  benefits, 692 

INTERPLEADER. 

by  society, 429,  686 

INTOXICATING  LIQUORS. 

pledge  of  total  abstinence, 301 

use  of ; 310 

forfeiture  of  insurance  for  drinking, 538 

change  of  habits  of  member, 566 

temperate  habits, 573 

expulsion  for  use  of, 614 

injuries  received  while  under  influence  of, 751 

JUDGMENT. 

of  expulsion,  when  void, 96,  99,  108,  117, 127 

against  unineoqwrated  society, 186 

proceedings  to  obtain  payment  of, 693 

restricting  operation  of, 694 

when  judgment  of  tribunal  of  the  society  shall  be  final, 39 

102,  216,  596,  602,  606 

KNOWN  VIOLATION  OF  LAW. 

forfeiture  of  contract, 306 

LEGATEES,  see  Devisees. 

LIABILITY  OF  MEMBER. 

for  debts  of  incorporated  society l.t? 

where  attempted  incorporation  is  invalid 158 

for  debts  of  unincorporated  society 160 

for  benefits K56 

incurring  tbe  debt 168 

debt,  •■  payable  oul  ol  Funds  of  Bociety," lii'.i 

notice  to  creditors  of  withdrawal  from  BOCiety 170 

for  assessments 471 

LIBEL  AND  SLANDER. 

charge  of,  against  member iji 

action  against  member  for  libel 171 

injunction  to  restrain  libel  on  society, 186 

privileged  communications, 171 


828  INDEX. 

[the  references  are  to  pages.] 

LIFTING. 

accidental  injury  by, 713,  720 

LIMITATION  OF  ACTION. 

when  statutes  of  limitation  apply  in  proceedings  in  expulsion, .  .91,  153 

limitation  as  to  place  where  action  may  be  brought, 619 

limitation  as  to  time  when  action  may  be  brought, 619 

LOCAL  LODGE,  see  Subordinate  Lodge. 

MALICE. 

in  making  charges  against  member, 173 

in  proceedings  in  expulsion, 140 

in  libel  and  slander, 171 

MANDAMUS. 

to  compel  admission  of  member, 70 

to  compel  reinstatement  to  membership  in  incorporated  society,        99 

108,  109,  113,  117 

is  a  discretionary  writ, 118,  120 

return  to  the  writ, , 122  et  seq. 

when  writ  will  be  denied, 218 

when  right  to,  for  reinstatement  is  waived 108 

not  proper  remedy  for  reinstatement  to  unincorporated  society, . .       156 

when  courts  will  issue  writ  of, 134 

to  compel  levy  of  assessment, 638 

to  obtain  payment  of  judgment, 693 

MARRIAGE  OF  MEMBER. 

effect  on  beneficiary, 463,  464 

MARRIAGE  SOCIETY. 

incorporation  of, 12,  19 

MEASURE  OF  DAMAGES. 

for  unlawful  expulsion, 108 

in  action  on  by-laws  for  benefits, 613 

for  breach  of  contract  of  insurance, 652,  664 

for  changing  plan  of  insurance, 670 

in  certain  cases, 667,  806 

MEDICAL  ATTENDANCE. 

on  member, 310 

MEDICAL  OR  MECHANICAL  TREATMENT. 

death  from, 761,  762,  763 

MEDICAL  EXAMINATION. 

when  may  be  required  as  a  condition  for  reinstatement, 545,  546 

before  payment  of  sick  benefits  will  be  made, 611 

MEDICAL  SOCIETY. 

schedule  of  fees  unlawful, 37,  47 

charges  against  member, 84,  124 

expulsion  from, 84,  124 

MEETING  OF  SOCIETY. 

notice  of, 94,  122,  127,  130,  207,  211 

waiver  of  notice  of, 135 


INDEX.  829 

[the  references  are  to  pages.] 

MEETING  OF  SOCIETY— Continued. 

quorum  must  be  present  to  adopt  by-laws 32 

when  quorum  presumed  to  have  been  present, 209 

at  which  by-laws  are  amended, 60 

election  to  membership, 71 

election  of  officers,  proxies, 188,  231 

reading  minutes  of  meeting, 95 

record  of  proceedings, 95 

duty  of  member  to  vote  at, 2C9 

exclusion  of  member  from. 110.  224 

v<  >ting  by  proxy, 188,  231 

for  election  of  officers, 189 

special  meeting 131,  133,  207 

adjourned  meeting 208 

rules  governing  future  meetings, 208 

when  corporate  acts  are  binding, 210 

on  Sunday, 211 

disposition  of  trust  funds  by  vote, 249 

levy  of  an  assessment  at, 475 

MEMBER. 

rights  are  two-fold, 9 

rights  of,  in  contract  of  mutual  benefit  insurance, 9,  405,  599 

rights  under  charter,   11 

payment  of  benefit  to  living  member, 7,  13 

assents  to  charter  and  by-laws, . : 113 

is  bound  by  by-laws, 33,  211 

when  affected  by  change  of  by-laws, 50 

when  bound  by  amendment  to  by-laws, 59 

complying  with  constitution  and  by-laws, 273 

who  is  a  member, 72 

when  minor   may  be  a  member, 74,  228,  290 

record  may  show  who  are  members, 97 

is  bound  by  records  of  the  society, 95,  97 

initiation  of 49,  280,  477 

good  standing  of, 801,  531,  535,  541,  545,  824 

good   health   of 810,  554,  573,  577,  579 

change  in   health  of, 27.").  280 

inquiry  into  health  of 557,  570 

change  of  habits  of, 566 

resignation  of, 625 

insanity  of, 116,  288,  550 

name  of,  stricken  from  rolls 484,  527,  582,  533,  539,  545,  61 1.  625 

ageof 24,  25,  L95.  196,  290,544,547,  566,  567,  ".Tn 

ol.l  age  of, M.  576,  579,  775,  779 

expulsion  of 78,  142 

application  of,  for  reinstatement 98 

death  of  member  pending  appeal 103 

must  exhaust  remedies  in  society 98,  106.  214.  .">!i7 

may  waive  irregularity  in  way  courts  of  society  are  constituted,       139 


830  INDEX. 

[THE  REFERENCES  ARE  TO  PAG)  S.] 

MEMBER— Continued. 

may  appeal  to   courts, 39,  40,  103 

liability  of, 157 

liability  of,  when  attempted  incorporation  is  invalid, 158 

liability  of,  for  debts  of  unincorporated  society . , 160 

ratifying  a  debt  of  unincorporated  society, 162 

unincorporated  society  is  not  a  partnership 165 

of  unincorporated  society  acts  for  himself  only, 166 

liability  for  debt  incurred  by  him, 167 

notice  of  withdrawal  from  unincorporated  society, 170 

action  for  libel  against, 171 

action  against  other  members, 176 

is  entitled  to  notice  of  charges  against  him, 94, 122, 127 

of  unincorporated  society . , 221 

charges  against  member  of  unincorporated  society, 151 

duty  of,  to  vote 209 

when  concluded  by  vote  of  majority, 249 

excluded  from  meeting, 110,  224 

effect  of  attending  meeting 165,  207 

has  no  severable  interest  in  property, ' 178,  222,  250 

right  of,  in  property  of  society, 250 

injury  to  property  rights  of, 217,  235 

action  by,  for  recovery  of  property, 184 

interest  of,  in  benefit  fund, 332 

407,  411,  413,  415,  454,  458,  462,  463,  464,  465,  463 

power  of  appointment  of  beneficiary  reserved  to, 332 

405,  410,  413,  415,  452,  458,  462 

statement  of,  as  to  relationship  of  beneficiary, 344,  348,  350,  568 

contracts  for  insurance  like  a  stranger, 273 

rightof ,  to  change  beneficiary, 405 

when  member  does  all  he  can  to  change  his  beneficiary 431 

when  power  to  change  beneficiaries  is  exhausted, 465 

consent  of,  to  a  change  in  contract  of  insurance, -273 

when,  may  assign  contract  of  insurance, 322 

death  of  beneficiary  during  life  of, 391 

interests  vest  on  death  of, 395,  396 

death  of,  in  common  disaster, 397 

death  of  beneficiary  and  member  at  the  same  moment, 398 

agreement  of  member  and  beneficiary  as  to  disposition  of  benefit 

fund 398 

effect  of  levy  of  an  assessment  on, 471,  482,  564,  576,  580,  589 

must  have  notice  of  assessment, 482,  483,  486 

failure  of,  to  pay  assessments,  notice  of  assessment, 482 

marriage  of,  effect  on  designation  of  beneficiary, 463,  464 

service  of  notice  of  assessment  on 491,  495 

may  waive  proper  service  of  notice  of  assessment, 497 

liability  for  assessments, 471,  589 

assessment  on  new  member  to  pay  old  losses, 476,  511,  660 

validity  of  assessment  against, 473,  477,  479,  480,  481 


INDEX.  831 

[the  references  are  to  pagks.] 

MEMBER—  Continued. 

payment  of  assessment  by, 505 

payment  of  membership  fee, 469 

when  may  pay  assessments 477,  485,  401  492,  495,  506,  509,  530 

right  to  have  assessments  paid  out  of  funds  in  hands  of  society,.       509 

tender  of  assessment  by, 482,  516,  520 

remedy  of,  when  society  refuses  to  accept  assessments 522 

recovery  of  assessments  paid  by, 523 

forfeiture  of  rights  for  non-payment 526,  532,  536 

reinstatement  after  forfeiture  for  non-payment 542 

neglect  of,  to  procure  reinstatement, 545 

knowledge  of  custom  of  society 556 

must  submit  claim  to  courts  of  society, 596 

admissibility  of  declarations  of, 626 

evidence  of  number  of  members  in  society, 651 

may  not  enjoin  payment  of  claim, 691 

must  not  contribute  to  injury  by  negligence 701,  704 

bodily  infirmity  of 768 

MEMBERSHIP. 

contract  of 9 

rights  under  contract  of 9,  598 

in  incorporated  society 67 

admission  into  unincorporated  society, 70 

applicant  for,  can  not  compel  admission 6*.  70 

assent  to  charter  and  by-laws  is  a  requisite  of, 113 

election  to 71 

procured  by  false  representations, 71 

admission  of  ineligible  person  to, 24 

irregularity  in  admission  to, '<!'■> 

qualifications  prescribed  by  charter, 42.  <>7 

in  subordinate  lodge, 72.  129.  221,  564 

in  religious  society, 75 

in  a  church 75 

how  question  of,  determined 72 

proof  of, 73.  62  1 

resignation  of 73 

certificate  of 271 

record  of, !)7 

fee  lor 168,  i ?< i 

expulsion  from 81,  142 

reinstatement  to 98 

reinstatement  in  incorporated  Bociety 112 

reinstatement  to  unincorporated  nociety 153 

irregularity  in  reinstatement  to ■".  r_> 

MEMBERSHIP  FEE. 

note  given    for • 468 

casli  payment  of 469 

payment  of.  by  draft 508 

recovery  of, 470 


832  ■  INDEX. 

[the. .references  are  to  pages] 

MURDER. 

or  accidental  injury, 726,  746 

MUTUAL  BENEFIT  SOCIETY. 

is  not  a  charity, 4,  246,  255 

definition  of  insurance, 5,  7 

what  laws  govern, 8 

plan  of  doing  business, 13 

change  of  plan  of  insurance, 58,  220,  227,  670 

plans  and  schemes  of  insurance, 637 

doing  business  in  foreign  state, 17 

ultra  vires, 19 

whose  decision  shall  be  final, C9,  99,  102,  217,  602,  606 

internal  affairs  of, 98,  214,  217 

power  of  foreign  corporation  over, 40 

agency  of  subordinate  lodges, 432,  441,  516 

for  raili  >ad  employes, 49,  785,  791 

who  are  members  of, 72 

necessity  for  membership  in  subordinate  lodge, 72,  129.  564 

membership  in  subordinate  lodge, 72,  102,  129,  516,  542 

minor  as  a  member  of, 74,  228,  290 

insanity  of  member, 116,  550 

expulsion  from, 78,  142 

reinstatement  to  membership, 98  et  seq.,  153 

damages  for  unlawful  expulsion  from, 107 

liability  of  member   when,  unincorporated, 166 

officers  of, 192 

power  of  officer  of,  to  waive  by-laws, 195 

officer  of,  duty  to  keep  books  and  records, 197 

must  keep  accurate  accounts, 231 

account  books  not  under  seal  of  secrecy, 203 

salary,  fees  and  commissions  of  officers, 198 

liability  of  officer  of, 200 

when  courts  will  not  interpret  laws  of, 219 

injunction  to  prevent  unauthorized  use  of  funds  of, 220,  232 

erroneous  plans  of  insurance, 220 

is  not  to  be  regarded  as  a  partnership, 223 

dissolution,  distribution  of  property, 233 

buying  out  another  society, 234,  592 

distribution  of  benefit  fund  on  dissolution, 239 

when  will  be  regarded  as  a  partnership 244 

when  funds  of  are  impressed  with  a  trust, 247 

distribution  of  trust  funds  among  members, 249 

taxation  of, 255 

certificate  of  membership  in, 27 1 

construction  given  to  contract  of  insurance  by, 290 

who  may  be  beneficiary, 311 

assignment  of  contract, 322 

construction  of  designation  of  beneficiary, 334 

rights  of  beneficiary  in   contract  of  insurance, 405 


INDEX.  833 

[the  rkff.rences  are  to  pages.] 
MUTUAL  BENEFIT  SOCIETY— Continued. 

rights  of  member  in  contract  of  insurance, 405 

right  to  change  beneficiaries, 405 

inherent  power  to  change  beneficiaries, 406 

contract  is  between  member  and  the  society 407 

mode  of  changing  beneficiary , 415 

consent  of,  to  change  of  beneficiaries, 329,  415,  418,  430,  438.  456 

when  estopped  to  deny  validity  of  change  of  beneficiary, 439 

interpleader  by, 429.  686 

mem  bership    fee, 468 

assessments  on  members, 471 

authority  to  levy  assessments, 473 

must  establish  validity  of  assessment, 477 

act  of  levying  assessment  is  ministerial, 477 

effect  of  levying  of  assessment  by, 471,  482,  564,  576,  580, 649 

notice  of  assessment, 482 

notice  of  assessment  by  mail, 483,  486,  489,  500 

service  of  notice  of  assessment, 491,  495,  503 

insufficient  notice  of  assessment 498 

agreement  of,  to  give  notice  of  assessment  to  beneficiary, 498 

effect  of  return  of  assessments  once  paid, 523 

refusal  of  society  to  accept  assessments 522 

authority  of  agents  to  collect  assessments, 518 

payment  of  assessment  by  member, 505 

payment  of  assessment  to  subordinate  lodge, 432,  441,  516 

tender  of  assessments  to, 482,  5 1 U.  521 1 

refusal  of  society  to  accept  assessments, 530 

promise  of,  to  accept  past  due  assessments, 524 

forfeiture  for  non-payment  of  assessment, 526 

declaring  forfeiture  of  contract, 532,  536 

proceedings  for  reinstatement  after  forfeiture, 542 

waiver  of  forfeiture, 554 

waiver  of  forfeiture,  retaining  assessments 570 

conditional  acceptance  of  delinquent  assessments, .")7;; 

attempt  to  collect  assessments 585 

property  in  assessments  levied  or  to  be  levied, 589 

duty  of,  to  resist  illegal  claims 47fi.  482,  649,  695 

purchase  of  assets  of  another  society 234,  592 

action  on  contract  to  pay  benefits 5fl  i 

methods  for  settlement  of  claims  against, 595 

delay  in  bringing  suit  against, (323 

payment  of  benefit  fund <;;•,> 

settlement  procured  by  fraud 689 

proceedings  against,  to  obtain    payment  of  judgment 693 

restricting  operation  of  judgment  against 694 

may  be  held  liable  for  benefits,  though  aot  for  death 780 

knowledge  of,  of  occupation  of  insured, >- 

NAME. 

of  society  may  not  express  its  real  character 4,  27,  28 

53 


834:  INDEX. 

[the  references  are  to  pages.] 

NAME —  Continued. 

right  to  exclusive  use  of  name  of  society. : 28,  186 

of  member  stricken  from  rolls, 527,  532,  533,  539,  545,  614,  625 

NEGLIGENCE  CONTRIBUTING  TO  INJURY. 

defense  of, 701,  735 

NOTICE. 

of  charges  against  member, .94,  122,  127,  129,  155 

sufficiency  of  notice  of  charges, 130,  133 

records  must  show  notice  to  expelled  member, 95 

when  notice  of  meeting  need  not  be  given, 129 

to  members  of  tribunal  trying  charges, 132 

waiver  of,  in  proceedings  in  expulsion, 135 

of  meeting  of  society, 94,  122,  127,  130 

of  meeting  to  elect  officers, 189 

of  meetin;  ]  to  dissolve  society 225 

of  withdrawal  of  member  from  unincorporated  society, 170 

to  officer,  waiver  of  forfeiture, 193 

from  officer  is  notice  from  society, 193,  485 

to  society  of  change  of  beneficiary, 329,  41",  430,  456 

form  of, 208,  485,  500 

service  and  proof  of, 134,  208,  491,  495,  503 

service  of,  on  Sunday, 211 

waiver  of  formal  defect  in, .' 630 

of  intention  to  levy  an  assessment, 475 

of  assessment. 482 

of  assessment  is  a  condition  precedent, 482,  527 

of  assessment  may  supply  deficiencies  in  levy, 482 

when  member  must  have  actual  notice  of  assessment, 483,487, 489 

of  assessment  by  mail, 483,  486,  500 

time  within  which  notice  of  assessment  must  be  paid, 486 

to  pay  assessment  to  specified  officer, 484 

must  conform  to  the  contract, 484 

written  notice, 484,  529,  798 

date  of  notice  by  mail, 491 

of  assessment  by  registered  letter, 492 

date  of  assessment,  date  of  notice, 494 

by  publication, 494 

of  date  of  payment, 495 

agreement  to  give  notice  of  assessment  to  the  beneficiary, 498 

insufficient  notice  of  assessment, 498 

to  pay  assessment  before  it  is  due, 504 

death  within  thirty  days  after, 514 

failure  to  give, 527 

of  suspension  of  subordinate  lodge, 531 

provisions  of  charter  concerning  giving  of, 561 

not  to  pay  benefit  fund  to  beneficiary, 678 

of  death  or  injury, 798,  799 

of  injury,  who  should  give, 798 

of  injury,  to  a  certain  officer, 799 


INDEX.  835 

[the  references  are  to  pages.] 

NOTICE— Continued. 

date  of  notice  of  injury,  mistake  in, 799 

within  reasonable  time, 799,  800 

as  soon  after  accident  as  possible, 802 

accompanied  by  full  particulars  of  accident, 801 

to  home  office  of  society , 802,  803 

must  show  accidental  injury 803 

effect  of  instantaneous  death  of  insured, 803 

waiver  of  notice  by  society, 804 

OBVIOUS  RISK. 

exposure  to, 707,  710 

OCCUPATION— See  Change  of  Occupation,  Classified  Risks. 

generally 782 

statement  of,  by  insured, 782 

usual  or  other, 54,  612,  770 

special  branches  of  trades, 783 

dangers  incident  to, 707,  713,  744,  784,  785,  791 

classified  risks, 788 

classification  of  separate  branches  of  trades, 784 

classed  as  non-insurable, 783 

when  member  is  bound  by  classification, 798 

when  society  is  bound   by  classification, 797,  798 

knowledge  of  society  concerning, 788 

change  of, 563,  783,  786,  788 

injury  in  more   hazardous, 789,  791 

individual  act  incident  to  other  occupations, 794 

permanent  disability, 770 

banker 791 

capitalist, 797 

solicitor, 77f» 

physician, 777 

retired  gentleman 774.  785 

merchant    anil    leather    cutter, 773 

stationary   engineer, 789 

wopdchopper 7S9 

conductor, 784 

spare  conductor, 7s'.) 

switchman 707,  7i:i.  770 

railroad  employes 786,  7«.u 

supervising  farmer, 7s") 

grocer, 786 

livery  stable  proprietor 785 

ice  man,  proprietor, 777 

OFFICER. 

dejure  and  de  facto, 800,  805 

election  of 188,  281 

election  of,  proxies 381 

when  officers  hold  over, 191,  282 


836  INDEX. 

[the  references  are  to  pages.] 
OFFICER— Continued. 

powers  and  duties  of, 192 

has  no  power  to  waive  by-laws, 194 

may  not  disregard  by-laws, • 196 

when  decision  of,  may  have  the  force  of  a  by-law, 291 

may  not  testify  as  to  effect  of  by-laws, 33 

decision  of,  as  to  manner  of  paying  assessments, 506 

decision  of,  as  to  benefit  fund, 603,  605 

construction  of  laws  by, 625 

construction  of  contract  by, 286,  290 

is  not  ultimate  judge  of  sufficiency  of  certificate  of  good  health,  545, 546 

appeal  from  decision  of, 209 

statement  of  opinion  of,  as  evidence, 522 

statement  of,  when  competent  evidence, 581,  651 

when,  is  a  competent  witness 626 

testimony  of,  as  to  sending  notice  by  mail, 487,  489 

knowledge  of,  waiver  of  forfeiture, 565,  569 

attempt  by,  to  collect  delinquent  assessments, 585 

authority  to  levy  assessments, 474 

assessments  levied  by , .    499 

discretion  as  to  reserve  fund, 219,  480,  685 

may  waive  prompt  payment  of  assessment, 193,  197 

may  waive  forfeiture, 193 

statements  of,  waiver  of  forfeiture, 554 

act  of,  binds  society, 439,  440 

notice  from  officer  is  notice  from  society, 484 

ministerial  acts  of, 165 

unauthorized  act  of  ministerial  officer, 568,  587 

suspension  of  lodge  by, 101 

suspension  of  member  by, 532 

of  religious  society, 266 

of  subordinate  lodge, 107 

of  unincorporated  society, 259 

salary,  fees  and  commissions  of, 198,  251 

application  of  salary  to  payment  of  assessment, 511 

regulation  of  conduct  of 219 

damage  for  misconduct  of, 107 

misconduct  of, 198,  199,  227 

duty  to  keep  books  and  records, 19T 

liability  of, 200 

when  liable  for  debt  of  unincorporated  society, 163,  165,  168 

sureties  on  bond  of, 203,  205 

suit  on  bond  of, 203 

defalcation  of, 204 

advance  of  money  by, .  .• 236 

must  account  for  funds  perverted, 236 

retaining  property  of  society, 252 

notice  to  pay  assessment  to  a  certain, 485 

when  notice  must  be  given  to  a  certain, 799 


INDEX.  S37 

[the  references  are  to  pages.] 

OFFICE  R— Continued. 

promise  of,  to  pay  assessment  for  member, 554 

promise  to  member  of  reinstatement 580 

payment  by,  of  benefit  fund  to  wrong  person, 676 

removal  of  by  courts. 192 

OLD  AGE. 

of  member, 14,  576,  579,  775,  779 

is  a  physical  disability, 14 

PAYMENT  OF  ASSESSMENT,  we  Assessment. 

directions  to  remit  in  a  certain  manner, 505 

in  cash, 506 

by  draft, 508 

by  check, 560 

effect  of  partial  payment 509 

time  within  which  payment  may  be  made 477, 

4*5,  491,  492,  495,  506,  513,  515 

custom  of  making  payment, 506 

during  life  of  member, 513,  515,  570 

death  of  member  within  thirty  days  after  notice, 514 

days  of  grace, 514,  515,  530 

on  Sunday, 552 

by  whom,  may  be  made, 512,  515 

by  subordinate  lodge  for  member, 535 

to  subordinate  lodge, 516,  542,  571 

must  be  made  to  certain  officers, 485,  521 

out  of  funds  in  hands  of  society, 509 

return  of  assessment  once  paid, 522 

recovery  of  assessments  paid 528 

reimbursement  for,  for  benefit  of  another, 535 

decision  of  officer*  as  to  manner  of, 506 

'  excuse  for  non-payment 550,  552 

PAYMENT  OF  BENEFIT  FUND,  see  Benefit  Fund. 

is  not  a  gift, 7,  679 

rigbts  of  parties 672 

on  surrender  of  certificate r's:> 

into  court:  interpleader 429.  oso 

to  proper  person 67a 

to  wrong  person;  recovery  of  fund 675 

to  supposed  widow I'"? 

to  assignee  of  contract 678.  679 

to  creditor _ 676,  <»79 

payment  <>t'  less  amounl  than  is  due <■>** 

procured  by  fraud ,lv;i-  ,;'-11 

right  to  double  payment 691 

with  interest 692 

member  may  not  enjoin, 691 

proceedings  t<>  obtain  payment  of  judgmehl 693 

restricting  operation  of  judgment  against  society, 694 


838  INDEX. 

[the  references  are  to  pages.] 

PAYMENT  OF  BENEFIT  FUND— Continued. 

in  a  special  manner, 806 

from  special  fund, '. .       806 

from  the  reserve  fund, 219,  480,  685 

PERMANENT  DISABILITY. 

what  is, 612,  770 

graded  on  income  of  insured, 780 

loss  of  foot,  hand  or  eye, .770,  777 

use  of  mechanical  appliance, 779 

retired  gentleman, 774 

merchant  and  leather -cutter, 773 

old  age  of  member, 14,  576.  579,  775,  779 

change  of  by-laws, 54 

PHYSICIAY'S  CERTIFICATE. 

may  be  required  for  sick  benefits, 46,  611 

of  health  of  member, 546,  557 

sufficiency  of, 546,  611 

PLEADING,  see  Action  at  Law,  Equity. 

action  on  by-laws  for  benefits, 610 

on  contract  of  insurance, 620 

non-payment  of  assessment, 529 

waiver  of  f orf eiture, 565 

insurable  interest, 620 

there  is  no  presumption  that  beneficiary  has  been  changed, 412,  622 

where  change  of  beneficiary  is  invalid, 622 

breach  of  promise  to  pay, 644 

averment  of  demand  for  assessment, 647 

averment  that  no  fund  has  been  raised  by  assessment, 648 

POISON. 

death  or  injury  from, 721 ,  757 

POWER  OF  APPOINTMENT. 

of  beneficiary, 332,  405,  410,  413,  415,  452,  458,  462,  463 

when  power  to  change  beneficiai-ies  is  exhausted, 465 

time  within  which  power  to  change  beneficiaries  must  be  exer- 
cised,         466 

PROOF  OF  DEATH,  see  Death  of  Member. 

as  a  condition  precedent  to  liability, 630 

mistake  in, 630 

cause  of  death, 631 

retained  by  society, 632 

may  be  waived, 632 

by  wrong  claimant, 631 

furnishing,  is  a  demand  for  an  assessment, 648 

PROPERTY  OF  SOCIETY. 

courts  will  protect  civil  or  property  rights  of  members, 217,  257 

member  has  no  severable  interest  in, 178,  222,  250 

rights  of  contributors  to, 248 

confiscation  of,  by  supreme  body, 216,  217,  235 


INDEX.  839 

[the  references  are  to  pages.] 

PROPERTY  OF  SOCIETY— Continued. 

disposal  of  by  vote, 209,  210,  225,  248 

division  of,  in  case  of  withdrawal  of  members, 250,  252,  260 

distribution  of,  on  dissolution, 233 

in  assessments  levied  or  to  be  levied, 589 

religious  society 263 

PROXIMATE  CAUSE. 

of  death, 763 

QUO  WARRANTO. 

courts  may  issue  writs  of, 213 

against  society, 14 

to  test  legality  of  election 189,  190 

dissolution  of  society, 227,  228 

officers  of  unincorporated  society, 190,  259 

RECORDS  OF  SOCIETY. 

in  proceedings  in  expulsion, 95 

may  be  contradicted, 95 

a  corporation  speaks  by  its  record, 95 

reading  of  minutes, 95 

when,  show  premature  forfeiture, 534 

may  be  evidence  of  validity  of  assessment 478 

debt  of  unincorporated  society  may  be  shown  by  other  evidence 

than, 164 

in  libel  and  slander, 172 

REINSTATEMENT. 

application  for, 534,  542,  627 

effect  of  application  for, 549 

application  for,  as  evidence  of  forfeiture, 629 

application  for,  reciting  forfeiture, 549 

when  right  to,  accrues, 546,  548 

on  conditions, 573 

imposing  new  conditions  for, 545,  547 

sufficiency  of  certificate  of  good  health, 546 

for  valid  and  satisfactory  reasons 545,  547,  551,  578 

where  pay  men  t  alone  will  reinstate, 547 

is  not  the  making  of  a  new  contract 319 

continues  old  contract  merely 549 

change  of  beneficiary  in  application  for, 450 

neglect  of  member  to  procure 545 

waiver  of  right  to,  damages  for  expulsion 107,  110 

proceedings  for,  in  subordinate  lodge 542 

irregularity  in  proc Lings  for 542 

after  forfeiture  for  non-payment 542 

right  to,  effect  of  levy  of  assessment 585 

procured  lis  false  representations 579 

remedies  for,  in  courts  of  society, 98 

appellate  tribunals  in  society, 99,  101 

appeal  irregularly  taken 101 

tender  of  assessments  pending  appeal  for, 520 


840  INDEX. 

[the  rfferences  are  to  pages.] 

REINSTATEMENT—  Continued. 

to  membership  in  incorporated  society, 112 

mandamus  is  proper  remedy  for, 113 

delay  in  applying  for, 119,  549 

return  to  the  writ  of  mandamus, * 1 22 

decree  reinstating  member  must  be  presented, 141 

by  injunction, 110 

in  unincorporated  society, 153 

to  property  rights  in  unincorporated  society, 155 

to  unincorporated  society,  proper  remedy  of  expelled  member,. .       156 
order  of  reinstatement  must  be  presented  to  the  society, 141 

REINSURANCE. 

what  is, 27 

forfeiture  ")f , 528 

by  misapplication  of  funds, 234,  235 

RELIGIOUS  SOCIETY. 

membership  in, , 75 

expulsion  from  religious  corporation, 88 

expulsion  for  non-performance  of  religious  duties, 87,  88,  146,  301 

officer  of, 259,  263 

civil  rights, 257 

property  of, 258 

jurisdiction  of  courts  over, 257 

title  to  church  property, 263 

secession  in,  division  of  property, 260 

libel  and  slander,  privileged  communications, 171 

RESERVE  FUND. 

discretion  of  officers, 219,  480,  685 

distribution  of, 243 

assessments  for, 480 

distribution  of,  on  dissolution  of  society, 238 

payment  froai 15,  16,  58,  231,  685 

SCHISM  IN  SOCIETY. 

election  of  officers, 191 

in  religious  society 260 

in  mutual  benefit  society, 235 

division  of  property, 251,  252,  260 

member  may  belong  to  both  organizations, 569 

right  to  double  payment, 691 

SERIOUS  ILLNESS,  see  Good  Health. 

of  member, 310,  769 

SICK  BENEFITS,  see  Benefit  Fund. 

restrictions  on, 46,  601,  603 

reasonable  by-laws  concerning  forfeiture  of, 46,  47 

suspension  of, 603 

for  physical  disability, 14,  612 

permanent  disability, 288,  775 

insanity  is  a  disease, 288 


INDEX. 


641 


[THR    REFERENCES  ARE  TO  PAGES.] 

SICK  BENEFITS—  Continued. 

graded  on  income  of  insured • "» 

society  may  be  liable  for.  though  not  for  death ,       780 

application  of,  to  payment  of  assessments, 510 

amendment  of  by-laws  concerning, 50  et  scq. 

repudiation  of  contract  for 50  et  aeq. 

action  for, 595,  601,  602,  606.  610 

action  for,  inquiry  into  expulsion, 106 

effect  of  expulsion  on  claim  for, 106,  613 

measure  of  damages, 013 

payment  of,  is  not  a  gift, 7 

STANDING  ON  PLATFORM  OF  CAR. 

negligence, 706.  709,  713,  738.  744 

SUBORDINATE  LODGE. 

is  the  local  body, 

is  usually  regarded  as  agent  of  supreme  lodge 432, 441.  516,  542.  571 

fundamental  law  of, 25,  32 

governed  by  constitution  of  higher  body, 216 

membership  in, '~-  1*9 

necessity  for  membership  in 72.  129,  231,  564 

withdrawal  from  membership  in, 564 

revocation  of  social  charter  of, 215,  235,  253 

orders  from  supreme  lodge, 102 

custom  in 563 

separate  funds  of, '-4 ' 

confiscation  of  property  of, 217.  235.  254 

money  collected  for  sick  benefits, "'lit 

suspension  of, 517,  530 

officer  of, 1J7 

delivery  of  contract  of  insurance  to, 276 

countersigning  certificates  of  membership 295 

when,  must  prepare  proofs  of  death, 633 

when  may  be  a  beneficiary, 819 

notice  of  assessment -tv*'-> 

payment  of  assessment  for  member  by 585 

payment  of  assessment  to, 516 

waiver  of  forfeiture  by 589, 

reinstatement  after  forfeiture  for  non-payment 542 

SUICIDE. 

definition  of. ;lu:1 

or  accidental  injury 726,  7  1-.  750,  761 

SUNDAY. 

01  1 

meetings  on, - ' l 

notice  of  meeting  Berved  on *~n 

expulsion  on ~1} 

payment  on, 

SUNSTROKE. 

death  from, ' '-'- 


S42  INDEX. 

[the  references  are  to  pages.] 

SUPEEME  LODGE,  see  Subordinate  Lodge. 

is  the  governing  body, 8,  216 

is  usually  incorporated, 9 

constitution  of,   governs  subordinate  lodges, 25.  32,  216 

orders  to  subordinate  lodge, 102 

confiscation  of  property  by, 217,  235 

right  to  property  of  subordinate  lodge, 254 

necessity  of  membership  in  a  subordinate  lodge, 72,  129,  221,  564 

not  bound  by  custom  in  subordinate  lodge, 5G3 

construction  of  contract  of  insurance  by, 286 

290,  291,  506,  546,  603,  605,  625 

expulsion  from, 115 

may  have  no  jurisdiction  to  expel  members, 138 

proceeding's  under  constitution  and  by-laws  for  reinstatement, . .       542 
reinstatement  after  forfeiture  for  non-payment, 542 

SURGICAL  OPERATION. 

death  from, , 761,  762,  763,  766 

SUSPENSION,  see  Expulsion. 

suspension,  expulsion,  amotion, 75 

of  member, 76 

must  be  provided  for, 526,  527 

of  subordinate  lodge, 517,  530 

before  expiration  of  specified  time, 5b4 

of  contractual  relations  between  member  and  society, 582 

admissibility  of  statements  of  member  concerning, 626 

TAXATION. 

of  property  of  mutual  benefit  society, 255 

TENDER. 

of  assessments, 482,  516,  520,  531 

must  be  made  to  proper  officer, 585,  521 

TIME. 

within  which  notice  of  assessment  must  be  sent, 486 

of  notice  of  as  sessment, 483 

levy  of  assessment  without  delay, 477 

computation  of,  for  payment  of  assessments, "  477 

485,  491,  495,  506,  509,  530 

when  right  to  reinstatement  accrues, 546,  548 

within  which  change  of  beneficiary  may  be  made, 466 

within  which  notice  of  accidental  injury  must  be  given, 798,  799 

TRAVELING  BY  PUBLIC  CONVEYANCE. 

negligence  of  passenger, 706,  713,  735 

getting  on  or  off  moving  cars, 738 

according  to  rules  of  such  carrier, 738,  744 

TRIBUNAL  OF  SOCIETY,  see  Courts  op  Society. 

TRUST  FUNDS. 

proper  accounts  of,  must  be  kept. 197 

account  books  are  not  under  seal  of  secrecy 203 


INDEX.  8-i3 

[the  references  are  to  pages.] 
TRUST  FUNDS—  Continued. 

distribution  on  dissolution  of  society, 233 

when  funds  are  impressed  with  a  trust, 247,  591 

collected  for  aid  of  sufferers, 248 

rights  of  contributors  to, .       248 

when  objects  of,  can  not  be  accomplished, 249 

distribution  of,  on  dissolution  of  society, 228 

vote  on  distribution  of, 209,  2 19 

distribution  of,  among  members, 249 

of  religious  societies, 258,  263 

agreement  of  beneficiary  to  hold  benefit  fund  in  trust, 398 

ULTRA  VIRES. 

doctrine  of, 19 

by-laws  may  be, 41 

UNINCORPORATED  SOCIETY. 

status  in  courts, 221 

is  not  a  partnership, 165,  175,  221 

right  to  exclusive  use  of  its  name, 28,  186 

courts  have  no  visitorial  power  over, 44,  112,  214 

when  may  be  a  beneficiary, 319 

constitution  of, 25,  44 

by-laws  must  be  legal 35 

reasonableness  of  acts  of, 44,  154 

alteration  and  amendment  of  by-laws, 34,  50 

incorporation  of, 26 

effect  of  incorporation  on  constitution  and  by-laws, 45 

admission  to  membership, 70 

has  no  inherent  power  of  'expulsion, 142 

power  to  pass  by-laws  providing  for  expulsion 145 

power  to  expel  from  long  usage, 146 

p<  iwer  to  expel  under  contract  of  association 147 

injunction  to  restrain  expulsion  from, 1C6 

charges  against  member  of, 151 

reinstatement  to  membership  in, 153 

proper  remedy  of  expelled  member 156 

liability  of  member  for  debts  of 160 

authority  of  commit! f,  to  incur  debts, 161 

liability  of  member  incurring  debt 167 

member  of  acts  for  himself  only 166 

member  may  ratify  debt    incurred  by 162 

notice  of  withdrawal  of  member  from 170 

liability  of  officer  of, 201 

debt  of,  payable  out  of  funds  of  society 169 

when  officers  of.  need  notact  together ,...       165 

actions  between  members, 176 

suits  by  or  against 181 

action  by,  for  recovery  of  property 184 

judgment  against 186 

election  of  officers, 1C0 


844  INDEX. 

[the  references  are  to  pages.] 

UNINCORPORATED  SOCIETY—  Continued. 

dissolution  of, 223 

for  public  purposes, 245 

property  of, 250 

member  has  no  severable  interest, 178,  222,  250 

USAGE,  see  Custom. 

VERTIGO-,  see  Fits. 

is  not  a  bodily  infirmity, 769 

VESTED  RIGHTS. 

of  beneficiary, 272,  403,  626 

when  beneficiary  has, 50  et  seq. 

interests  vest  on  death  of  member, 395,  396 

VISITORIAL  POWER  OF  COURTS. 

over  religious  society, 257 

over  incorporated  society, 44,  112,  213 

over  unincorporated  society, 44,  112,  213 

VOLUNTARY  EXPOSURE  TO  DANGER. 

by  member, 707,  710 

swimming, 710,  714,  756 

hunting, 710 

stepping  off  train, 712,  718 

hidden  danger, 712 

cleaning  gun, 713 

lifting, 71 3.  720 

boarding  moving  train, 713,  785,  791 

in  attempting  to  rescue  another, 714 

climbing  out  of  window, 715 

accosting  a  woman  on  the  street, 716 

WAIVER  OF  FORFEITURE,  see  Forfeiture. 

promise  to  accept  delinquent  assessments, 524 

printed  prospectus 554 

agreement  of  officers, 554 

custom  of  society, 556 

receipt  of  assessments,  estoppel  in  pais, 563 

as  to  future  payments, 563 

unconditional  acceptance  of  assessment, 578 

assessments  retained  by  society, *.       570 

conditional  acceptance  of  delinquent  assessments, 573 

receipt  of  delinquent  assessments, 556,  565,  568,  570,  572,  576 

levy  of  assessment  on  delinquent  member, 564,  567,  580 

attempt  to  collect  assessment, 585 

WALKING  ON  RAILROAD  TRACK. 

due  diligence  for  personal  safety, 705,  710,  712,  745 

WEEKLY  INDEMNITY,  see  Sick  Benefits. 

permanent  disability, 773 

WIFE,  WIDOW,  see  Divorced  Wife. 

as  beneficiary, 337,340,  341,  343,  462 


INDEX.  8±5 

[the  references  are  to  pages.] 

WIFE,  WIDOW— Continued. 

as  heir  of  her  husband 321,  365.  368 

wife  and  children, 353 

payment  of  benefit  fund  to  supposed  widow, 677 

adultery  of,  affecting  benefit  fund, 350 

divorced  wife, 320,  368 

WITNESS. 

when  member  of  court  may  testify, 96 

exclusion  of  testimony  of.  in  expulsion, 114 

when  two  or  more  are  required, 123 

testimony  of,  concerning  service  of  notice, 135 

as  to  church  history, 258 

competency  of, 625 

opinion  of,  as  to  age  of  person, 567 

to  accidental  injuries, 731,  733 

WHO  MAY  BE  A  BENEFICIARY,  see  Beneficiary. 

beneficiaries  specified  in  charter, 311 

may  belong  to  any  specified  class, 317 

effect  of  amendment  of  organic  law, 317 

when  unincorporated  lodge  may  be, 319 

friend  of  the  member, 312 

insurable  interest, 314 

family 317 

wife,  widow, 337,  340,  341,  343 

when  divorced  wife  may  be, 320 

assignee  of  contract, 322 


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